PancakeSwap (@PancakeSwap) is delaying its weekly automatic buyback and burn of trading fees until Monday, November 16, as it makes infrastructure and smart contract security improvements. The protocol said the move follows a rise in hacks on other protocols that exploited smart contract weaknesses.

PancakeSwap said there is no security threat to users' wallets, liquidity pools or trading. The $CAKE burns that would have taken place this week will be carried out during next week's buyback.

What PancakeSwap Is Changing

The protocol is upgrading the architecture of its fee-routing smart contract, the component that directs a share of trading fees toward the weekly buyback and burn. The aim is to make the system more secure before the process resumes.

The weekly burn is a central part of the CAKE token model. TokenPost reported that the fee-funded mechanism uses a portion of weekly fees to purchase CAKE for burning. According to Cryptowisser, the most recent burn on November 3 removed 365,000 CAKE, worth about $690,000, from supply.

The pause comes after a strong run for burns. TokenPost reported that PancakeSwap burned 1,790,527 CAKE in October, exceeding new issuance by 1,116,211 tokens and extending its net supply decline streak to 38 months. Because the delayed burns will be made up next week, the pause is not expected to change the amount of CAKE removed from supply, only the timing.

Wider Context for CAKE Tokenomics

The security work comes as PancakeSwap's fee structure is also under review. TokenPost reported that the core team has proposed directing 88% of fees from v3 and Infinity pools to liquidity providers, while v2 pools would continue sending 23% of swap fees to CAKE burns. That proposal was still under forum discussion and had not gone to a Snapshot vote at the time of that report.

PancakeSwap is a decentralized exchange built on BNB Chain. Users with open positions do not need to take any action, based on the protocol's statement that wallets, liquidity pools and trading are unaffected.

Sources

  • TokenPost: PancakeSwap Burned 1.79 Million Tokens in October as Supply Fell

  • Cryptowisser: PancakeSwap Burns $690K in CAKE as Weekly Deflation Continues

  • TokenPost: PancakeSwap Proposal Would Increase LP Share of Swap Fees, Cut CAKE Emissions