PancakeSwap Introduces New Voting System ‘Gauges’ for Governance Token Holders

Last updated: November 23, 2023 07:19 EST
. 3 min read

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Decentralized crypto exchange Pancakeswap has launched a new voting system called “Gauges” and “veCAKE,” a new vote-escrowed system that allows users to vote on governance proposals and determine CAKE emissions allocations.

According to a Nov. 22 blog post, PancakeSwap, the third-largest decentralized exchange by total value locked (TVL), has unveiled two new features, Gauges Voting and veCAKE, designed to enhance governance influence for CAKE holders. These features aim to stimulate liquidity across pools and increase rewards for CAKE staker.

PancakeSwap wrote in the blog:

“We’re excited to introduce two transformative features: Gauges Voting and veCAKE, revolutionizing our governance system for CAKE Emissions. This strategic update is designed to empower CAKE holders with increased governance influence, boost liquidity across our pools, and supercharge rewards for CAKE stakers.”

PancakeSwap’s governance token, CAKE, is distributed as rewards to liquidity providers and is governed by a decentralized autonomous organization called CakeDAO, consisting of all CAKE holders. The platform currently boasts over $1.4 billion in TVL, making it a prominent player in the decentralized finance (DeFi) space.

Notably, PancakeSwap has phased out its “syrup pool” reward system, previously enabling CakeDAO members to stake CAKE for an additional share of the exchange’s fees. Instead, additional fees will now be distributed exclusively to users holding veCAKE. Participation in PancakeSwap’s DAO governance now relies on veCAKE, a new vote-escrowed system distinct from vCAKE. veCAKE tokens, obtained by staking CAKE, allow users to vote on governance proposals and determine CAKE emissions allocations through Gauges Voting.

“The new Gauges Voting system allows veCAKE holders to influence the distribution of CAKE emissions in essential products like Farms on BNB Chain, Ethereum, and Arbitrum at launch.”

Under the newly introduced system, CAKE holders gain the ability to vote on additional rewards for specific pools every two weeks. However, to participate in voting, users must lock their CAKE tokens in a smart contract for a predefined period. The longer the lock-up period, the greater the voting power. It’s noteworthy that veCAKE is non-transferable, and users can only acquire it through CAKE staking. The maximum lock time for CAKE is set at four years, and the longer the lock, the higher the veCAKE rewards.

PancakeSwap Introduces veCAKE for Enhanced Governance Power and Rewards

PancakeSwap, a leading decentralized exchange (DEX), continues to push the boundaries of innovation with its latest feature, veCAKE. As veCAKE holders, users wield influence over the distribution of CAKE emissions within specific liquidity pools and projects. The process involves Gauges Voting, 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, enabling users to transfer staked CAKE to the new contract effortlessly. The move to veCAKE comes with a myriad of benefits for CAKE stakers, including enhanced governance power, deeper liquidity, and enticing vote incentives.

One of the exclusive advantages for veCAKE holders is the ability to direct CAKE emissions to pools where they have stakes. This exclusivity potentially leads to a higher Annual Percentage Rate (APR) and increased liquidity in those pools. The system ensures that only veCAKE holders can wield this directing power, creating a dynamic environment for liquidity providers and traders alike.

Moreover, veCAKE holders can opt for additional vote incentives from projects through external bribing markets, introducing an extra layer of rewards for engaging in CAKE staking. This flexibility, combined with the power to vote through external markets or PancakeSwap Gauges Voting, offers a strategic advantage for veCAKE holders.

In the decentralized exchange landscape, PancakeSwap’s introduction of Gauges Voting and veCAKE aligns with its commitment to innovation and user empowerment. Notably, PancakeSwap recently expanded its offerings with the launch of a gaming marketplace, inviting developers to build, publish, and update games directly on the platform.

As of the latest update, CAKE is trading at $2.44, reflecting a notable 6.49% increase in the last 24 hours. The market cap is also on the rise, marking a 7.84% increase.