PancakeSwap Plan Would Send 88% of Swap Fees to Liquidity Providers and Cut CAKE Emissions

PancakeSwap’s proposed “The Flip” would shift more of its newer pools’ trading revenue to liquidity providers (LPs), while sharply reducing the amount of CAKE issued each day. The design ties LP compensation more closely to swap activity and gives the protocol a smaller share of fees. It also raises a question for CAKE holders: how will lower emissions and a changed fee split affect the token’s burn and supply plans?

A larger share for pool providers

In a forum post published on Oct. 14, PancakeSwap’s core team, posting as The Kitchen, proposed that LPs on v3 and Infinity pools receive 88% of swap fees across all 11 supported chains. Those include BNB Chain, Ethereum, Base and Solana. LPs on most of these pools currently retain 66% to 68%; under the plan, the other 12% would go to the PancakeSwap Treasury.

The change applies to the fee distribution for those pool types, not to the fee tiers traders pay. The team says those tiers would remain as they are. For traders, that means the proposed adjustment is directed at how existing swap revenue is divided rather than the quoted trading fee itself. For LPs, the higher share would make the amount they receive more directly responsive to the swaps their liquidity supports.

The proposal also treats existing Infinity pools differently from pools created under the new arrangement. Their LP fees were set when each pool was created, so reducing the protocol’s portion would lower the total fee instead of simply increasing the LP share within an unchanged total. The team gives a 1% pool as an example: its total fee would fall to about 0.76%. That distinction matters to pool operators and traders assessing established Infinity pools, since the adjustment would change the fee charged on swaps there.

Daily CAKE issuance would fall

The revenue change is paired with a reduction in daily CAKE emissions from 22,500 tokens to 7,000. The team describes this as a cut of about 69%, or 15,500 fewer CAKE created per day. At that daily difference, the reduction amounts to roughly 5.7 million tokens over a year.

The 7,000 CAKE that would continue to be issued each day would fund a new ecosystem pool called the Pantry. The team says it intends to use that allocation for marketing, partnerships and seeding liquidity in new pools. That creates a defined source of ongoing token funding for those activities, even as total emissions decline. How the Pantry would allocate spending among those uses is a detail readers may want to track as the plan develops.

“Growth is paid for by activity on the platform, not by minting more CAKE,” the team wrote. The statement captures the proposed shift in emphasis: a larger portion of trading fees would flow to LPs, while the protocol would rely less on newly issued tokens to attract liquidity. That approach makes pool activity more central to LP compensation, though the source provides no forecast of how liquidity providers would respond to the changed incentives.

Using 2025 trading volume, the team estimates that LPs on v3 and Infinity would have received about $62 million more in fees under the proposed split. That is a retrospective estimate based on the stated volume and proposed fee allocation, rather than a projection of future earnings. Actual LP returns can depend on pool activity and each provider’s position; the estimate alone does not establish what any individual provider would collect.

Burn mechanics and holder concerns

The proposal leaves v2 pools unchanged because their fees are hard-coded. Those pools would continue sending 23% of swap fees to the CAKE burn. The team argues that “v2 alone keeps CAKE net deflationary,” citing an average net supply decline of about 190,000 CAKE a week over the previous 10 weeks. It links that pace to the roughly 20% supply reduction by 2030 set out in Tokenomics 3.0, which passed in April 2025. The team also says supply has fallen 11.5% since that plan was approved.

That burn account does not settle concerns raised in the forum. Many early replies criticized The Flip, with commenters focused on the effect of the new split on burns from v3 and Infinity. A user posting as Juapia wrote, “v3 and Infinity stop burning CAKE. Why don’t you state this clearly?” The commenter suggested directing part of the 12% Treasury share to burns. Another participant, matrdolfo, who said they had held CAKE since 2021, wrote that they were “fundamentally opposed to the final outcome.” A third, PancakesLover, said, “I would personally vote against this change.”

These comments point to a tension in the design: the proposal would reduce issuance, but some holders want fee flows from the newer pools to support burns as well. The team’s stated case centers on the continued burn from v2 and the lower daily issuance. The source does not specify a burn allocation from the 12% Treasury share, so that issue remains part of the feedback the team says it will review.

CAKE traded at $2.20 on Oct. 15, down about 6.8% over 24 hours, according to CoinGecko data. That figure records the market price movement reported alongside the proposal; it does not establish a cause for the move.

Next steps remain open

PancakeSwap’s supply changes have included earlier community decisions. In December 2023, participants approved a reduction in CAKE’s maximum supply from 750 million to 450 million. Holders later approved another reduction in January 2026, lowering the cap to 400 million in a Snapshot process that closed Jan. 19.

The Flip has not yet reached a Snapshot vote, and no date has been set. The team says it will review forum feedback before publishing a final proposal for holders to consider. If approved, rollout would begin in November and finish by the end of January 2027, according to the plan. Until then, the fee split, emissions level and Pantry allocation remain proposed terms. The next version will show whether the team changes its treatment of burns or clarifies how the ecosystem pool will spend its daily allocation.

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