PancakeSwap’s core team, which operates under the name Kitchen, published a governance proposal this week that would change how the decentralized exchange pays for liquidity. Called The Flip, it would raise the share of swap fees kept by liquidity providers on v3 and Infinity pools to 88% across all eleven supported chains, up from roughly two-thirds today. The remaining 12% would go to the PancakeSwap treasury.
The change targets how the exchange funds liquidity. Today it leans on newly minted CAKE tokens to attract providers. Under the proposal, trading volume would do that job instead, so growth is paid for by activity on the platform rather than by minting more tokens. Using 2025 volume as a reference, the Kitchen estimates providers would have earned about $62 million more under the new split, keeping $880 of every $1,000 in pool fees rather than the $660 to $680 they keep now.
Traders would pay the same fee tiers. What changes is the depth behind each trade. The Kitchen projects up to 30% more liquidity in the same pools, 20 to 25% less price impact per trade, and less room for sandwich attacks and other MEV. Existing Infinity pools carry a caveat. Because their LP fees are fixed at creation, a lower protocol fee would reduce the total swap fee instead. A 1% pool would become roughly 0.76%, with about 0.67% going to providers and 0.091% to the protocol.
The second half of the proposal cuts CAKE emissions by about 69%, from 22,500 to 7,000 tokens per day. The Kitchen says that removes roughly 15,500 newly minted CAKE each day, or about 5.7 million per year. Rather than burning the remaining 7,000 daily tokens, it would send them to a new discretionary fund called the Pantry, meant for marketing, partnerships, and bootstrapping liquidity in new pools. PancakeSwap’s older v2 pools, whose fees are hard-coded and still send 23% of swap fees to CAKE burns, would stay unchanged.
For CAKE holders, the math cuts both ways. Lower emissions slow the growth of supply, and the Kitchen says v2 burns alone keep the token net-deflationary at roughly 190,000 CAKE per week, about 9.9 million per year. On that pace, the remaining 31.6 million CAKE needed to reach the 2030 supply target would be cleared near the end of 2029. But the 7,000 daily tokens routed to the Pantry are spent at the team’s discretion rather than burned, so the deflationary effect is not as clean as a straight emission cut.
None of this is final. The proposal is a discussion document that still has to pass a Snapshot vote. If approved, the Kitchen plans to begin implementation in November 2026 and finish by the end of January 2027. The figures are projections. The $62 million estimate assumes 2025 trading volume repeats, and the deeper-liquidity gains depend on providers actually adding capital in response to the higher fee share. The vote will settle whether trading fees alone can sustain the liquidity that the exchange has so far supported partly through new token emissions.
Source: BlockchainReporter.