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, increase liquidity across all pools, and increase rewards for CAKE stakers.
PancakeSwap is a decentralized exchange (DEX) and automated market maker (AMM) that operates across multiple chains. It allows users to easily exchange/trade tokens through the use of liquidity pools and offers the opportunity to participate in yield farming for rewards. These pools are filled with funds deposited by users, who receive Liquidity Provider (LP) tokens in return.
By holding LP tokens, users can claim a share of the pool and a portion of trading fees. Additionally, PancakeSwap allows users to engage in token farming by depositing LP tokens and earning rewards in the form of CAKE and SYRUP.
PancakeSwap recently launched the Gauges voting system, allowing veCAKE holders to influence the distribution of CAKE emissions across various major products such as Farms on BNB Chain, Ethereum and Arbitrum. This system gives veCAKE holders the ability to influence how CAKE emissions are allocated within each pool, favoring certain liquidity pools and projects.
According to the announcement, the allocation of CAKE emissions will increase as a pool accumulates more veCAKE through Gauges voting. This means that liquidity providers (LPs) can expect higher rewards in the coming 14-day epochs.
To participate in PancakeSwap’s DAO governance, users now need veCAKE tokens. These tokens are part of a new vote escrowed system that is different from vCAKE. veCAKE allows users to vote on governance proposals and play a critical role in determining CAKE emission allocations through Gauges Voting. It is important to note that veCAKE cannot be transferred and can only be obtained by staking CAKE.
veCAKE holders enjoy several benefits, including weekly CAKE rewards for staking, revenue sharing, participation in Gauges Voting, and the ability to claim voting incentives from other protocols.
PancakeSwap is currently going through the migration process from vCAKE to veCAKE, which is a step towards a more advanced and exclusive governance system. Voting on meter use begins on November 23, 2023 at 00:00 UTC.
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