What is the purpose of cake token in pancakeswap
The Cake token (CAKE) is the native utility and governance token of PancakeSwap, a decentralized exchange (DEX) built on the Binance Smart Chain (BSC). It serves multiple purposes within the PancakeSwap ecosystem.
1. **Incentivizing liquidity supply**: Users can receive incentives by depositing and locking up Liquidity Provider (LP) tokens in PancakeSwap's liquidity pools. The obtained LP token rewards can be farmed on the PancakeSwap platform, allowing users to accumulate CAKE.
2. **Governance**: Holding CAKE tokens allows users to participate in the governance of PancakeSwap. As a community-governed platform, proposals are voted on using the PancakeSwap voting portal, with voting power being proportional to the number of CAKE tokens a user holds.
3. **Staking**: CAKE holders can swap CAKE for SYRUP for additional incentivized staking, providing more ways to earn rewards within the PancakeSwap platform.
4. **Fees and rewards**: CAKE is used to pay transaction fees and can be earned as rewards for providing liquidity.
PancakeSwap has a high emission rate of CAKE tokens, which could lead to dilution in the value of the token as the amount of tokens increases. However, the token's utility and governance functions within the PancakeSwap ecosystem provide value for users and help drive adoption of the platform.