PancakeSwap Total Value Locked Rises 19% as Fee Reform Goes to a Vote
Key Facts
Total value locked on PancakeSwap rose about 19% in the week preceding the October 21 report as voting opened on a proposal to redistribute swap fees and reduce CAKE token emissions, according to Cointelegraph. DefiLlama's dashboard showed total value locked at $2.404 billion on the day of the report, as the platform's community discussed changes to fee allocations. Cointelegraph reported that the weekly increase in locked assets was nearly $380 million. Total value locked stood at about $2.02 billion on October 14, the starting point for the report's weekly comparison. The proposal before the community combines changes to the distribution of swap revenue with lower token emissions, while excluding the fee structure for V2 pools from the changes.
Total value locked in the automated market maker's V3 pools rose from $336.06 million on October 14 to $738.08 million on October 21, according to DefiLlama's daily snapshots. Locked assets in those pools thus more than doubled from the start of the period, which coincides with the weekly comparison for the platform as a whole. V3 pools are covered by the reform put to a vote, alongside Infinity pools, according to the proposal published on PancakeSwap's governance forum. That scope extends across all 11 supported networks, rather than being limited to pools on a particular network. In terms of liquidity distribution across networks, total value locked on BNB Chain stood at about $2.332 billion, according to DefiLlama's reading on the day of the report.
The proposed reform allocates the remaining 12% share of swap fees to the platform's treasury, according to the governance forum. This allocation places the treasury's share among the changes to fees for the V3 and Infinity pools covered by the proposal. V2 pools retain their fee structure, which is excluded from the reform, and currently apply a fixed trading fee of 0.25%, according to the platform's official documentation. V3 pools, by contrast, offer trading fee tiers of 0.01%, 0.05%, 0.25% and 1%, according to the same documentation. The redistribution of fee revenue comes against this existing variation between V2's fixed fee and V3's multiple fee tiers, with differences in the scope of pools covered by the vote.
On token issuance, the PancakeSwap team proposes reducing daily emissions from 22,500 to 7,000 CAKE tokens, according to the discussion posted on the governance forum. The reduction remains subject to approval of the reform and would be implemented gradually as part of the proposed changes. Remaining emissions would be directed to the ecosystem growth fund known as Pantry, according to details the team presented to the community. The fund's uses include marketing and partnership deals, two spending categories named in the proposal when explaining where the remaining emissions would go. The emissions plan put to a vote thus combines a reduction in daily issuance with the allocation of continuing emissions to the ecosystem growth activities identified by the team.
The platform's team, however, acknowledged in the governance discussion that the proposed reform would also reduce weekly net CAKE burns. The team said "weekly net burns will be lower," outlining the trade-off accompanying changes to token emissions and fee distribution. The proposal thus includes a change in issuance volumes and another in net burns, both part of the reform before the community. The team's acknowledgment of lower burns accompanies its plan to reduce daily emissions and allocate the remainder to the ecosystem growth fund. These changes remain part of the proposed package under discussion by the PancakeSwap community, ahead of approval and the gradual implementation of the reduction.
On swap activity, spot trading volume through PancakeSwap totaled about $5.483 billion over seven days, according to DefiLlama's dashboard. The platform recorded total fees of about $2.42 million over the seven-day period, according to the same dashboard. Protocol revenue totaled $815,695 over the same period, under DefiLlama's classification of the platform's revenue. These figures come as the community discusses changes to the distribution of swap fees between liquidity providers and the treasury in pools covered by the reform. According to the governance proposal, the new distribution applies only to V3 and Infinity pools across supported networks, while the V2 fee structure remains outside the scope of the changes.
The community vote on the reform ends on October 24, according to the deadline cited in Cointelegraph's report on the proposal and the growth in total value locked. The decision before voters covers the redistribution of swap fees in the specified pools, alongside a reduction in daily CAKE emissions. If the proposal is approved, emissions will be reduced gradually under the plan the team presented on the governance forum. Remaining emissions under the plan will go to the ecosystem growth fund, whose uses include marketing and partnership deals. The community is voting on this package with the team's acknowledgment that its implementation will bring lower weekly net burns alongside the proposed reduction in token emissions.