PancakeSwap’s core team, known as the Kitchen, has proposed a governance change that would rework how the multi-chain exchange pays for liquidity. The plan, called “The Flip: Liquidity Should Get Paid More,” would give liquidity providers 88% of swap fees on every v3 and Infinity pool — up from the roughly two-thirds they keep today — while cutting CAKE emissions by about 69%, from 22,500 to 7,000 tokens per day.
The central idea is to replace newly minted CAKE with real trading fees as the main incentive for liquidity. PancakeSwap operates across eleven chains — BNB Chain, Ethereum, Arbitrum, Base, Solana, Robinhood, Monad, Arc, zkSync, Linea and opBNB — and the higher LP share would apply to all of them. The remaining 12% of fees would go to the Treasury, while the older v2 pools, whose fee structure is hard-coded and still sends 23% of swap fees to CAKE burns, would stay unchanged.
For liquidity providers the change is mechanical. Based on 2025 trading volume, the Kitchen estimates LPs would have earned roughly $62 million more in fees under the new split — about $880 of every $1,000 in pool fees, up from the $660 to $680 they keep today. Traders would pay the same fee tiers, but the proposal argues deeper liquidity works in their favor: the Kitchen projects up to about 30% more liquidity in the same pools, 20–25% less price impact per trade, and less room for sandwich attacks and other MEV.
The emissions cut is where the plan gets its name. Post-veCAKE emissions would drop by 15,500 CAKE a day, or about 5.7 million fewer tokens each year. The 7,000 daily CAKE that remain would flow into a new discretionary fund the Kitchen calls the Pantry, for marketing, partnerships and bootstrapping new pools, rather than to holders or a burn. The team frames this as a continuation of Tokenomics 3.0: supply is already down 11.5% since that April 2025 plan, and v2 burns alone keep CAKE net-deflationary at roughly 190,000 tokens a week — enough to clear the remaining supply-reduction target around the end of 2029.
None of this is settled yet. The Flip is still a discussion and must pass a Snapshot vote before the Kitchen begins implementation in November 2026, with rollout expected to finish by the end of January 2027. There is also a caveat for existing Infinity pools, where LP fees are fixed at creation: a lower protocol fee would shrink the total swap fee instead of raising the LP share, so a 1% pool would become roughly 0.76%.
What the vote would settle is a structural trade-off. Paying LPs 88% leaves the Treasury with 12%, and the remaining emissions flow to a flexible fund rather than a burn, so CAKE holders are being asked to accept that growth will be funded by platform activity instead of new supply. Whether trading fees alone can sustain the liquidity that record volumes have historically depended on incentives to maintain is the question the community is now being asked to answer.
Adapted from PancakeSwap’s ‘Flip’ Proposal Cuts CAKE Emissions 69% and Gives LPs 88% of Fees.