PancakeSwap has introduced two groundbreaking features, Gauges Voting and veCAKE, to transform its governance system for CAKE emissions. This strategic update aims to empower CAKE holders, increase governance influence, boost liquidity across pools, and enhance rewards for CAKE stakers.
PancakeSwap is a decentralized exchange (DEX) and automated market maker (AMM) that operates across multiple chains. It enables users to easily swap/trade tokens by utilizing liquidity pools and offers the opportunity to participate in yield farming for rewards. These pools are filled with funds deposited by users, who then receive liquidity provider (LP) tokens in return.
By holding LP tokens, users can claim a share of the pool and a portion of the trading fees. Additionally, PancakeSwap allows users to engage in token farming by depositing LP tokens and earning rewards in CAKE and SYRUP.
PancakeSwap recently introduced the Gauges Voting system, which empowers veCAKE holders to influence the distribution of CAKE emissions across various important products such as Farms on BNB Chain, Ethereum, and Arbitrum. This system grants veCAKE holders the ability to impact how CAKE emissions are allocated within each pool, thereby favoring specific liquidity pools and projects.
According to the announcement, as a pool accumulates more veCAKE through Gauges Voting, the allocation of CAKE emissions will increase. This means that liquidity providers (LPs) can expect higher rewards in the upcoming 14-day epochs.
To participate in PancakeSwap’s DAO governance, users now need veCAKE tokens. These tokens are part of a new vote-escrowed (ve) system, distinct from vCAKE. With veCAKE, users can vote on governance proposals and play a crucial role in determining CAKE emission allocations through Gauges Voting. It’s important to note that veCAKE cannot be transferred and can only be obtained by staking CAKE.
Holders of veCAKE enjoy several benefits, including weekly CAKE rewards for staking, revenue sharing, participation in Gauges Voting, and the ability to claim vote incentives from other protocols.
PancakeSwap is currently undergoing the migration process from vCAKE to veCAKE, which signifies a move towards a more advanced and exclusive governance system. The use of Gauges Voting will commence at 00:00 UTC on November 23, 2023.
