Locking up CAKE as veCAKE to incentivize axlUSDC pairs on PancakeSwap

Project Name PancakeSwap
Description Leading multichain DEX on BNB Chain, Ethereum, Aptos, Arbitrum, zkSync, Base, Polygon zkEVM, Linea, and opBNB
Date 30 Nov 2023
Contact Name Chef Maroon
Discord Username chefmaroon
Proposal Amount US$100,000

Project Description

To boost liquidity, reduce slippage, and increase volumes for axlUSDC pairs on PancakeSwap, we are proposing US$100,000 worth of AXL tokens to be exchanged for CAKE tokens and locked up as veCAKE for 4 years.

Notably, this is not a token spend as the veCAKE will remain the property of Axelar. They will be used to vote for axlUSDC gauges across various chains on PancakeSwap every 2 weeks.

PancakeSwap has launched a new veCAKE gauge system, similar to Curve’s veCRV and Balancer’s veBAL. Users can lock up CAKE for a maximum of 4 years, and then vote for gauges on PancakeSwap every 2 weeks. Based on the amount of vote each gauge receives, the underlying liquidity pair (e.g. axlUSDC-USDT) will receive a pro-rata amount of CAKE emission. This CAKE emission is used to attract users to deepen liquidity for the specific pair, reducing slippage and encouraging higher trading volumes for that pair.

In our previous round of incentivization with axlUSDC on the BNB Chain, the total transfers of axlUSDC increased from 256,090 to 489,842, while the daily average volumes increased from ~US$880k to >US$2M, highlighting an effective campaign.

By having veCAKE to vote for axlUSDC gauges across various chains regularly, axlUSDC will continue to improve its utilization and market metrics. Importantly, there is no token spend in this proposal, as the locked CAKE tokens will belong to the AXL community.

If the results of incentivizing via veCAKE are favorable, Axelar can increase the amount of veCAKE accumulated, up to a maximum of $1,000,000 (inclusive of the original $100,000).


This proposal aims to grow the Axelar ecosystem by:

  1. Replacing incentive spend: Instead of spending ~US$650,000 worth of AXL tokens (converted US$40,000 per 90 days to 4 year period) to incentivize axlUSDC liquidity, Axelar can accumulate veCAKE instead, which will be used repeatedly over 4 years to deepen axlUSDC’s liquidity.

  2. Increasing liquidity: By incentivizing liquidity provision in axlUSDC pairs on various chains, it will reduce slippage and enhance trading volume, making (cross-chain) swaps involving axlUSDC more attractive.

Proposal Details:

  • Proposal amount: PancakeSwap is proposing US$100,000 worth of AXL tokens to be exchanged for CAKE, and locked for 4 years as veCAKE. This is not a token spend as the veCAKE will remain the property of Axelar.

  • Use of veCAKE: veCAKE will be used to vote for axlUSDC gauges (currently, there’s significant liquidity on BNB Chain, Linea, and Base) on PancakeSwap every 2 weeks.

  • Re-lock mechanism: To ensure the voting power remains high, the veCAKE may be re-locked regularly for 4 years. The community may enact another proposal if they wish to stop the re-lock process.

Goals, Milestones, & KPIs

Primary: Trading volume and TVL of the relevant axlUSDC pairs on PancakeSwap should at least maintain or improve from the current levels.

Secondary: axlUSDC transfer count should increase meaningfully from current levels.

Deliverables, Milestones, & Timeline

  1. Axelar team to send US$100,000 of AXL to the Squid team

  2. Squid to exchange the AXL tokens for CAKE tokens

  3. Squid to lock all the CAKE for 4 years as veCAKE and vote for axlUSDC gauges every 2 weeks, relocking the entire amount of veCAKE for 4 years regularly

  4. If the results are favorable, Axelar may commit an additional $900,000 of AXL to this veCAKE programme, and repeat Steps 2 and 3 of the process


PancakeSwap’s veCAKE system involves smart contracts, which inherently carry smart contract risks. However, this is heavily mitigated by our audits, which are regularly updated in our documentation.


As an essential component of the DeFi landscape, PancakeSwap aims to support emerging and established projects by hosting their liquidity and fostering their adoption. Establishing this veCAKE arrangement also benefits CAKE holders and the broader PancakeSwap community.

Bio & Past Work

1 Like

Thank you for submitting your proposal. On first glance we don’t see anything to object about. However, it would be useful to get input from a wider range of community members, particularly those who may have significant expertise in this particular area of DeFi. What sort of pace do we need to move at to take advantage of this opportunity and what are the main drivers for this?

1 Like

Hey @Mike, that’s a great question. While we wait for other community members to chime in, here’s our take on it:

  • On-chain vote: Fri 1 Dec 2023 - Mon 4 Dec 2023
  • Execution of proposal: Tue 5 Dec 2023
  • Epoch 1 voting period ends: Wed 6 Dec 2023 0000 UTC
  • CAKE rewards / Epoch 2 starts: Thu 7 Dec 2023 0000 UTC

In order to make sure Axelar can vote within Epoch 1 and therefore have an uninterrupted stream of CAKE emissions from Epoch 2 onwards, we recommend the timeline above.

If the community feels more time is needed, we could work with a longer discussion period, although that would mean CAKE rewards will only start streaming in Epoch 3 (begins on 21 Dec 2023).

1 Like

Thanks for your reply. Normally we would value a longer period to discuss proposals. However, given your track record in this area and the benefits of moving quickly, we (LunaNova) are happy to see this process accelerated on this occasion, if there are no other objections.


Hey thanks for the proposal, we have voted YES but would like to understand if this will be repeated every 4 years? is that right

1 Like

Thank you for your support!

Although the CAKE will be initially locked as veCAKE for 4 years, the voting power received will decay over time. Hence, we added point number 3) under “Deliverables, Milestones, & Timeline” which states that Squid will relock the entire amount of CAKE as veCAKE for 4 years regularly.

This ensures the absolute votes derived from the veCAKE will not diminish over time, although the relative voting power will change based on the total number of veCAKE votes every epoch.

1 Like