Key Notes
- PancakeSwap proposes allocating 88% of v3 and Infinity swap fees to liquidity providers, with v2 unchanged and an exception for existing Infinity pools.
- Effective daily CAKE issuance would fall from 22,500 to 7,000, with the remaining tokens allocated to the Pantry ecosystem growth fund.
- The Flip is a discussion draft before a Snapshot vote, with a conditional rollout planned from November 2026 through January 2027.
PancakeSwap has proposed giving liquidity providers 88% of swap fees across its v3 and Infinity pools while cutting effective daily CAKE issuance by approximately 69%. The plan would shift more of the exchange’s incentives toward trading income and reduce the number of new tokens entering its ecosystem.
The Kitchen team published The Flip on October 14 as a discussion proposal. It has not yet been approved: the team says it will review community feedback before submitting a final version to a Snapshot vote.
The headline percentages describe two different things. The 88% figure is the portion of swap fees allocated to liquidity providers, rather than an annual investment return. The roughly 69% reduction applies to new CAKE emissions, rather than an immediate removal of 69% of existing token supply.
More trading income for liquidity providers
The proposed split would allocate 88% of fees to liquidity providers and the remaining 12% to PancakeSwap’s Treasury. It covers v3 fee tiers and Infinity across the 11 networks listed in the proposal, including BNB Chain, Ethereum, Arbitrum, Base and Solana. The older v2 exchange would remain unchanged.
PancakeSwap’s existing pool documentation shows liquidity providers receiving 66–68% of fees across the standard EVM v3 tiers. Solana’s v3 pools already allocate 84% to providers, so their increase would be smaller.
For every $1,000 in swap fees generated, the proposed 88% allocation would leave $880 for providers. That compares with $660–$680 across those EVM v3 tiers and $840 on Solana. These amounts describe the pool’s collective fee allocation, not the payment to each individual depositor.
Individual earnings would still depend on a position’s participation in trading. The documentation explains that v3 liquidity outside its selected price range becomes inactive and earns no trading fees. A higher allocation therefore does not eliminate the need for active liquidity or guarantee a particular return on deposited capital.
Existing Infinity pools need a separate explanation. Their LP fees are fixed when each pool is created, so lowering the protocol component would reduce the total fee paid by traders instead of raising that fixed LP component. The proposal gives an example in which a 1% pool becomes approximately 0.76%, comprising 0.67% for providers and roughly 0.091% for the protocol.
That exception matters alongside the draft’s broader statement that fee tiers stay unchanged. The change primarily redistributes fees, but existing Infinity pools can also become cheaper to trade through. It should not be read as an identical fee increase for every existing liquidity position.
Daily CAKE issuance would fall to 7,000
The second part of The Flip would lower effective post-veCAKE emissions from 22,500 to 7,000 CAKE per day. The difference is 15,500 tokens daily, equivalent to approximately 5.66 million fewer newly issued CAKE over a full year at that rate.
The remaining 7,000 daily CAKE would go to a new ecosystem growth fund called the Pantry. The Kitchen would deploy the allocation flexibly, with examples including marketing, partnership agreements and initial liquidity for new pools. It is not described as a fixed distribution paid directly to every CAKE holder.
PancakeSwap’s rationale is that a larger share of real trading fees could make liquidity provision more attractive with fewer newly minted token incentives. The Treasury’s proposed 12% allocation on v3 and Infinity is also distinct from a commitment to burn that entire amount.
The draft leaves v2’s fee structure untouched and identifies it as the main remaining CAKE burn engine, with 23% of its swap fees directed to burning. Lower issuance and continuing burns work on opposite sides of the supply calculation: the former slows additions, while the latter removes tokens.
PancakeSwap’s tokenomics framework targets a roughly 20% supply reduction by 2030. That is a policy objective, not a guaranteed price outcome. Its earlier community response also emphasized that burns depend on product activity and trading volumes.
CoinScreamer recently examined another approach in Pyth’s reserve policy, which directs eligible DAO receipts toward PYTH purchases. Those purchases build treasury holdings rather than burning the acquired tokens, illustrating why fee allocation, buybacks, burns and emissions should be assessed separately.
November rollout depends on community approval
The Kitchen estimates that applying the proposed fee shares to 2025 trading volumes would have delivered about $62 million more to v3 and Infinity liquidity providers. That is a historical counterfactual calculated by the team, rather than additional income already distributed or a forecast of guaranteed future earnings.
The draft also argues that higher fee retention could attract deeper liquidity and improve execution for traders. Whether that happens would depend on providers adding capital, trading activity and how competing venues respond. The allocation change itself does not establish that liquidity or volume has already increased.
If approved, implementation is planned to begin in November 2026, within two weeks of passage, and take approximately three months, finishing by the end of January 2027. PancakeSwap says it would announce each network as the changes go live.
For now, the next step is the final proposal and its governance vote. Community approval, the eventual fee settings and the staged network rollout would determine when providers and traders actually see the changes described in The Flip.
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