Discussion of Proposal to Redirect Side Product Fee Streams for Treasury Optimization
TL;DR
The Kitchen proposes redirecting the fees from PancakeSwap’s side products - defined as products other than AMM v2, v3, and Infinity - to the PancakeSwap Treasury, empowering the Kitchen to put them to work for the protocol. If passed, this enables the Kitchen to apply this reallocation to side products within the defined scope.
To be clear about the scale: side product fees currently represent less than 2% of total protocol fees.
This is not a change to our deflationary model in any material way. The core burn engine powered by AMM trading fees remains completely unchanged. This is an optimization of where minor streams are allocated: redirecting it from a burn program where it barely registers, to Treasury where it can be actively deployed for the long-term benefit of the protocol.
The Numbers: What This Actually Represents
Protocol fee breakdown (on average, weekly basis)
For the purposes of this proposal, side products refer to all PancakeSwap products outside of AMM v2, AMM v3, and Infinity.
Note: The deflationary engine is powered by spot trading fees across AMM v2, v3, and Infinity. Fees from other products together represent less than two percent of total protocol fees.
Background
For nearly three years, the Kitchen has delivered one of the most consistent deflationary records in all of DeFi. Since the deflationary era began in September 2023, CAKE’s total supply has fallen from an all-time high of ~392M to ~338M as of last month — a reduction of roughly 14% sustained across 33 consecutive months. This did not happen by accident. It is the result of repeated, deliberate commitments: retiring veCAKE, cutting daily emissions from ~40,000 to ~22,500, and the achievement of a net burn of ~8.19% of supply in 2025 alone.
PancakeSwap’s deflation is backed by real substance: week after week, we use real protocol revenue to buy CAKE back on the open market — millions of dollars of genuine, recurring demand — and send it to the burn address. Every CAKE we take out of circulation is backed by actual economic activity. A ~14% reduction achieved entirely through revenue-funded open-market buybacks is one of the most credible deflationary records in the industry.
The engine behind that record is our spot trading products. AMM v2, v3, Infinity, and generate over 98% of protocol fees — and they continue to be completely unchanged under this proposal. The burn program’s power, credibility, and deflationary trajectory are entirely preserved. In recent months, PancakeSwap’s total effective burn has run on the order of 2M CAKE per month. Our deflationary trajectory would continue effectively undisturbed — and the resilience we gain is well worth it.
Rationale
1. The burn impact is negligible and the deflationary engine is untouched. At a monthly effective burn of ~2M CAKE, the core deflationary thesis is driven by spot trading across AMM v2, v3, and Infinity, and would continue unchanged. The trajectory is well established; this reallocation does not move it in any material way. Side products as burn contributors are minor by any measure - this proposal recognizes that reality and puts those fees to better use.
2. Treasury optimization: A well optimized treasury enables capacity to fund audits, security, development, and incentives. Protocol resilience, sustained development, ecosystem leadership - the Treasury reserves fund all of these, and optimizing the protocol’s operating base ultimately serves CAKE holders.
3. Reserves fund resilience and the next generation of products for our users. Burned CAKE is gone. Treasury BNB can be put to work - seeding new pools, funding integrations, and shipping the products our users come to PancakeSwap for. This converts a small static benefit into durable capacity to keep building.
Specification
If this proposal passes, the Kitchen will:
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Redirect the fees generated by side products - defined as any PancakeSwap products outside of AMM v2, AMM v3, and Infinity - to the PancakeSwap Treasury -
Continue every other burn stream — spot trading fees across AMM v2, v3, and Infinity, and other burn mechanisms — entirely unchanged.
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Direct these funds primarily toward research & development and initiatives that strengthen the PancakeSwap ecosystem — sustaining product innovation, integrations, and growth for our users through the cycles ahead.
Scope
This proposal affects only side product fees. It does not alter CAKE max supply, emissions, or any other tokenomics parameter.
Final Notes
This proposal is an administrative and Treasury management improvement, not a change in PancakeSwap’s long-term tokenomics direction. It strengthens the protocol’s financial resilience while preserving flexibility around treasury optimization.
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