For people who don’t use subDAOs, this is a proposal that could increase the value of CAKE, so they can support it. However, for those who do use subDAOs, it results in losses, which is why they oppose.
This proposal aims to eliminate veCAKE and Gauges Voting, reduce CAKE emissions, and target an annual deflation rate of about 4%. I understand this as pointing to a situation where opinions are divided between those who don’t use subDAOs and those who do. Let’s break this down from that perspective.
Benefits for People Not Using SubDAOs
For CAKE holders who don’t use subDAOs (e.g., those simply holding the token or not participating in veCAKE or liquidity provision), a proposal like Tokenomics 3.0 could increase CAKE’s value in the following ways:
• Reduced Supply: Lower CAKE emissions would limit the total amount of tokens entering the market, creating deflationary pressure. If demand remains steady, this could drive up the token’s price.
• Long-Term Value Growth: Eliminating veCAKE and Gauges Voting could reduce complexity and reliance on subDAOs, enhancing PancakeSwap’s simplicity and transparency. This might boost the project’s overall credibility and adoption, positively impacting CAKE’s value.
• Increased Fairness: Those not using subDAOs often find themselves at a disadvantage in the current system regarding voting power and reward distribution. If this proposal passes, the bias toward large holders and subDAOs would decrease, relatively improving the position of regular holders.
For these reasons, people not relying on subDAOs can clearly support it as “a proposal that enhances CAKE’s value.”
Losses for People Using SubDAOs
On the other hand, for those actively using subDAOs (e.g., Cakepie or Stake DAO), the proposal could lead to losses for the following reasons, prompting their opposition:
• Reduced Rewards: SubDAOs offer additional token rewards through bribe markets, a significant income source for veCAKE holders. Abolishing veCAKE and Gauges Voting would eliminate this revenue stream, lowering yields for subDAO users.
• Loss of Voting Power: Holding veCAKE allows users to vote on subDAO-related gauges and control CAKE emission allocations. Removing this system would diminish subDAOs’ influence and weaken existing positions.
• Ecosystem Impact: SubDAOs support PancakeSwap’s external partnerships and diversity. Their reduction could limit indirect benefits (e.g., access to new projects or additional revenue sources) that subDAO users currently enjoy.
In short, for subDAO users, this proposal clearly results in losses due to the erosion of their current revenue models and governance advantages.
Background of the Divide and Possible Solutions
This split in opinions highlights the existence of groups with differing interests within the PancakeSwap community. Those not using subDAOs prioritize “long-term token value,” while subDAO users focus on “short-term profitability.”
To mitigate this conflict while balancing decentralization and growth, the following compromises could be considered:
• Gradual Transition: Instead of immediately abolishing veCAKE and Gauges Voting, phase them out over several months to a year. This would give subDAO users time to adjust their strategies.
• Alternative Incentives: Introduce new reward mechanisms for subDAO users (e.g., increased staking rewards or additional governance perks) to offset their losses.
• Hybrid Model: Retain veCAKE partially while introducing voting power caps or quadratic voting to limit subDAO influence while preserving some benefits for users.
Conclusion
Indeed, for those not using subDAOs, this proposal offers reasons to support it as it could enhance CAKE’s value, but for subDAO users, opposition is natural due to the losses in revenue and influence. This divide is a critical discussion in determining PancakeSwap’s next direction—whether to prioritize token value or ecosystem diversity. If this proposal is put to a vote, a middle-ground solution that reconciles both sides could be key to gaining community support.
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