PancakeSwap has unveiled its CAKE Tokenomics 3.0 proposal, fueling 12% uptick in the token’s price.

PancakeSwap (CAKE) has unveiled a new proposal, detailing its vision for CAKE Tokenomics 3.0. At the heart of the proposal is the goal to achieve 4% annual deflation rate by 2030. Other key changes include eliminating veCAKE and voting systems, ending staking with immediate token unlocks, and halting revenue sharing to redirect fees toward token burns.

The 4% annual deflation target builds on PancakeSwap’s previous year’s achievement, where it managed to reduce the CAKE supply by 2.7%—the highest deflation rate among decentralized exchanges. This new target reflects PankaSwap’s commitment to turning CAKE into a deflationary token, aiming for a 20% total supply reduction by 2030.

To this end, revenue sharing will be removed. Instead of distributing part of the trading fees back to users, those funds will now go toward burning CAKE, supporting the deflation by shrinking supply.

Additionally, PancakeSwap plans to simplify its tokenomics by retiring voting system veCAKE, where users had to lock their CAKE tokens for long periods to gain voting power and influence emissions toward specific liquidity pools. In return, participants could earn bribe rewards from protocols seeking to attract liquidity. However, this system led to poor allocation of rewards, where low-volume pools were receiving a large chunk of emissions despite contributing very little to actual activity or revenue.

If the proposal is passed, daily emissions will be cut almost in half—from about 40,000 CAKE per day to 22,500—which will happen 3 phases. PancakeSwap will directly manage emissions using real-time market data, prioritizing high-volume liquidity pools. This will end staking requirements entirely—all locked CAKE will be unlocked and users will be able to use them as they see fit.

Meanwhile, CAKE is trading at $1.81, up by 12% in the past 24 hours. Investors are likely betting on the long-term value of CAKE, given the new deflationary mechanics.