Adobe Stock / Jorge Eduardo
Decentralized crypto exchange Pancakeswap has launched a new voting system called “Gauges” and “veCAKE,” a new voting system that allows users to vote on governance proposals and determine the allocation of CAKE emissions.
According to a November 22 blog post, PancakeSwap, the third-largest decentralized exchange after Total Value Locked (TVL), has unveiled two new features: Gauges Voting and veCAKE, designed to increase the governance influence of CAKE holders. These features aim to stimulate the liquidity of all pools and increase rewards for CAKE stakers.
PancakeSwap wrote on the blog:
“We are excited to introduce two transformative features: Gauges Voting and veCAKE, revolutionizing our governance system for CAKE emissions. This strategic update is intended to give CAKE holders more influence over governance, increase liquidity in our pools and increase rewards for CAKE stakers.”
PancakeSwap’s governance token, CAKE, is distributed as a reward to liquidity providers and is managed by a decentralized autonomous organization called CakeDAO, which consists of all CAKE holders. The platform currently has a TVL of over $1.4 billion, making it a major player in the decentralized finance (DeFi) space.
Notably, PancakeSwap has phased out its “syrup pool” reward system, which previously allowed CakeDAO members to stake CAKE for an additional share of exchange fees. Instead, additional fees will now only be distributed to users who own veCAKE. Participation in PancakeSwap’s DAO governance is now based on veCAKE, a new vote deposit system distinct from vCAKE. veCAKE tokens obtained by staking CAKE allow users to vote on governance proposals and set CAKE emission allocations through Gauges Voting.
“The new Gauges voting system allows veCAKE holders to influence the distribution of CAKE emissions in key products such as Farms on BNB Chain, Ethereum and Arbitrum at launch.”
As part of the newly introduced system, CAKE holders will have the opportunity to vote for additional rewards for specific pools every two weeks. However, to participate in the voting, users must lock their CAKE tokens in a smart contract for a predefined period of time. The longer the blocking period, the greater the voting rights. It is noteworthy that veCAKE is non-transferable and users can only acquire it through CAKE staking. The maximum ban period for CAKE is set at four years, and the longer the ban, the higher the veCAKE rewards.
PancakeSwap introduces veCAKE for greater governance performance and rewards
PancakeSwap, a leading decentralized exchange (DEX), continues to push the boundaries of innovation with its latest feature, veCAKE. As veCAKE holders, users have influence over the distribution of CAKE emissions within specific liquidity pools and projects. The process includes tuning gauges, allowing for a more targeted and strategic approach to reward allocation.
The transition from vCAKE to veCAKE is a seamless experience through the platform’s interface, allowing users to effortlessly transfer staked CAKE to the new contract. The move to veCAKE brings a variety of benefits for CAKE stakeholders, including improved governance power, increased liquidity, and enticing voting incentives.
One of the exclusive benefits for veCAKE holders is the ability to direct CAKE emissions to pools in which they have shares. This exclusivity potentially results in a higher annual percentage rate (APR) and increased liquidity in these pools. The system ensures that only veCAKE holders can exercise this control power, creating a dynamic environment for liquidity providers and traders alike.
Additionally, veCAKE holders can opt for additional voting incentives from projects through external bribery markets, introducing an additional layer of rewards for participating in CAKE staking. This flexibility, combined with the ability to vote via external markets or PancakeSwap Gauges Voting, provides a strategic advantage for veCAKE holders.
In the decentralized exchange landscape, PancakeSwap’s introduction of Gauges Voting and veCAKE is in line with its commitment to innovation and user empowerment. Notably, PancakeSwap recently expanded its offerings with the launch of a gaming marketplace that invites developers to create, publish and update games directly on the platform.
As of the latest update, CAKE is trading at $2.44, registering a notable increase of 6.49% in the last 24 hours. The market capitalization is also increasing and is 7.84%.
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