Many agreements have not been met due to PancakeSwap’s governance voting mechanism, even though Decentralized Financial (DeFi) protocols continue to strive for quality and fairness.
PancakeSwap’s Governance Proposal Failed in the Hands of a Whale
The Binance Smart Chain’s decentralized PancakeSwap exchange (DEX) stated that a vote on a governance proposal had failed in the hands of a whale in a tweet on April 19.
The proposal aims at another profit farm from ChainGuardians’ Token and Polkadot Social Network Token MIX. The PancakeSwap team recognized the bad behavior and suggested various incentives to vote.
“We will speak with the team about re-proposing with different incentives. This shows the importance of making sure you vote each time. Don’t rely on others.”
A single whale prevented the approval of new farming proposals
The proposal to use DEX’s native CAKE tokens to earn pCGG and MIX tokens failed. This is due to the fact that a single address is against it.
The whale address has given 94,500 votes with CAKE tokens. This makes it the largest single voter with a majority against the proposal. Every other address in the election voted for a new resource farm to be established. However, between them, they do not have enough strength to overcome the single whale.
These underline the simple premise that the DeFi protocol will not really be decentralized if large token holders can manipulate governance proposals.
This may be the first for PancakeSwap, but not for the industry. The most notorious case of whale manipulation is Uniswap’s first government vote. Whales also dominated this behaviour to give them more control over the deal. At the time, industry experts suggested that Uniswap’s governance could harm DeFi.
In August 2020, Curve Finance conducted its first governance vote. The curve shows that it has taken over most of the voting rights.
In the same month, it was reported that most DeFi platforms function more like corporations than like democratic communities. People are also concerned about the centralization of the Binance Smart Chain itself, but it hasn’t stopped users.
CAKE Token Price Analysis
The local PancakeSwap token eliminated these issues at a pump price of 12.5%
With gas prices soaring on the Ethereum platform, the DEX, which is supported by BSC, has quickly become popular in recent months. DeFiLlama currently reports PancakeSwap TVL valued at $7.5 billion.