PancakeSwap has presented a new governance proposal to the community that would change the CAKE token economy. The proposal, called “The Flip,” plans to reduce the daily effective CAKE production from 22,500 to 7,000. This change represents approximately a 69% reduction.
If the proposal is implemented, 15,500 fewer CAKE tokens will be produced daily. This represents an annual reduction of approximately 5.7 million CAKE tokens. The remaining 7,000 CAKE tokens will be transferred to the Pantry fund, which will be created to support marketing, partnerships, and the liquidity of new pools.
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However, the proposal doesn’t just involve reducing supply. In the V3 and Infinity pools, the goal is for 88% of transaction fees to go to liquidity providers and 12% to the treasury. This change has also raised questions about the future of revenue from CAKE burning in these pools.
While some users in the community support the reduction in production, others object to the narrowing of combustion sources. The current combustion mechanism of V2 pools will be preserved.
The proposal has not yet been accepted. Following community feedback, the final text will be put to a vote. If approved, implementation is expected to begin in November and be completed by the end of January 2027.
*This is not investment advice.
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