LPs take 88%—so what do CAKE holders get?
Looking back at the discussion around PancakeSwap’s The Flip, this is the disagreement I think is most worth talking about. LPs care about getting a bigger share of fees. People who only hold CAKE want to know: as the platform gets busier, how does that value flow back to the token?
Let’s start with one line in the graphic: for a v3 pool with a 0.05% fee tier, assuming it generates $1,000 in trading fees, the LPs’ combined share rises from $660 to $880—an increase of $220, or about one-third. That 88% is the share of fees allocated to LPs. It does not mean you earn 88% APY just by depositing funds, nor that a single LP gets the entire $880.
But the comments weren’t all applause. Juapia asked how CAKE holders would continue to benefit as v3 and Infinity grow; Blue also asked for clarity on the buyback plans.
In its October 19 response, the team made an important clarification: non-stablecoin fees received by the treasury would still be used to buy back CAKE. The rollout schedule was also adjusted to proceed in phases, with the main burn contribution chain switching over before the process is ultimately completed in line with the supply-reduction target. It would be wrong to cite early concerns and claim that all buybacks have since been canceled.
My take: increasing LPs’ share is an appealing way to attract liquidity using real trading fees. But if I only hold CAKE, I’d still be watching how the remaining 12% is allocated, how the buybacks are carried out, and whether more trading leads to more value accruing to the token. A busy platform doesn’t mean every type of participant automatically gets the same benefits.
If you hold CAKE, would you rather grow the liquidity business first, or clearly spell out how much value flows back to token holders?
Image: Illustration from PancakeSwap’s official October 14 discussion draft; the text also takes into account the author’s October 19 update and does not treat “adjusted” as meaning it is already in effect across all pools today. $CAKE $BNB
Looking back at the discussion around PancakeSwap’s The Flip, this is the disagreement I think is most worth talking about. LPs care about getting a bigger share of fees. People who only hold CAKE want to know: as the platform gets busier, how does that value flow back to the token?
Let’s start with one line in the graphic: for a v3 pool with a 0.05% fee tier, assuming it generates $1,000 in trading fees, the LPs’ combined share rises from $660 to $880—an increase of $220, or about one-third. That 88% is the share of fees allocated to LPs. It does not mean you earn 88% APY just by depositing funds, nor that a single LP gets the entire $880.
But the comments weren’t all applause. Juapia asked how CAKE holders would continue to benefit as v3 and Infinity grow; Blue also asked for clarity on the buyback plans.
In its October 19 response, the team made an important clarification: non-stablecoin fees received by the treasury would still be used to buy back CAKE. The rollout schedule was also adjusted to proceed in phases, with the main burn contribution chain switching over before the process is ultimately completed in line with the supply-reduction target. It would be wrong to cite early concerns and claim that all buybacks have since been canceled.
My take: increasing LPs’ share is an appealing way to attract liquidity using real trading fees. But if I only hold CAKE, I’d still be watching how the remaining 12% is allocated, how the buybacks are carried out, and whether more trading leads to more value accruing to the token. A busy platform doesn’t mean every type of participant automatically gets the same benefits.
If you hold CAKE, would you rather grow the liquidity business first, or clearly spell out how much value flows back to token holders?
Image: Illustration from PancakeSwap’s official October 14 discussion draft; the text also takes into account the author’s October 19 update and does not treat “adjusted” as meaning it is already in effect across all pools today. $CAKE $BNB
