PancakeSwap, the leading decentralized exchange (DEX) on the Binance Smart Chain, held an insightful Ask Me Anything (AMA) session on April 26th, addressing the CAKE Tokenomics v2.5 Decision proposal and various other topics. The session, hosted on the platform’s Telegram Main Group, featured key participants, including Chef Mochi (Head Chef), Chef Bun (Product Manager), Chef Icy (BD Lead), and Chef Fran (Community Manager), with Chef Fran serving as the AMA’s host.
During the session, PancakeSwap tackled several topics, including the changing Annual Percentage Rate (APR) for users who locked their CAKE tokens for extended periods, CAKE’s availability on other chains, and the platform’s future plans. The AMA highlighted the team’s commitment to transparency and engagement with its user base. As the platform expands its reach and continues to develop, the CAKE token’s future prospects suggest a bright outlook for PancakeSwap and its community.
Addressing APR Concerns and the Tokenomics v2.5 Decision Proposal
The AMA began by discussing concerns over the changing APR for users who locked their CAKE tokens for extended periods. Chef Mochi acknowledged the community’s apprehensions and explained that the revised proposal options aimed to balance the high inflation of the Syrup Pool. He emphasized that the high-inflation APRs would be directed towards long-term stakers, ultimately benefiting those who commit to the platform for a longer duration.
Cross-Chain Expansion and CAKE Availability
Chef Bun provided an update on CAKE’s availability on other chains, confirming that the CAKE token is now available on the Ethereum network with the deployment of V3. Users are encouraged to provide liquidity on V3 and stake those positions in the farm to earn CAKE natively on Ethereum. As PancakeSwap expands its DEX to cover more blockchains, CAKE will be integrated with other products like Farms, Syrup Pool, and IFO.
The 750 Million CAKE Hard Cap
Discussing the 750 million CAKE hard cap, Chef Mochi stated that if the final proposal passes with Option 1 or 2, the hard cap would take a significant time to reach. He added that lowering the hard cap might be considered in the future.
Neutral Emissions, Weekly Burns, and Buybacks
Chef Fran asked about the possibility of stopping neutral emissions and replacing weekly burns with buyback CAKEs for Syrup Pool and Farms rewards. Chef Mochi explained that the protocol would likely continue the CAKE burn and buybacks for distribution instead, as this is the most direct way to counterbalance the inflation of the CAKE token.
Minting, Deflationary Models, and Future Plans
Chef Mochi also addressed the issue of stopping minting or minimizing it for only stakers and then working on a deflationary model. He mentioned that PancakeSwap had posted two proposals this month, both aimed at reducing minting—one on Farms and the other on the Syrup Pool.
For Farms, completely stopping minting is challenging. A significant advantage of PancakeSwap is the runway of CAKE emissions, which can help attract Total Value Locked (TVL) from DEX protocols that no longer emit liquidity mining rewards. As TVL is a crucial factor in driving trading volumes, CAKE emissions on Farms will help attract TVL, generating trading volume on the AMM and the revenue that will be used to distribute CAKE lockers.
Long-term, the goal is to optimize emission on Farms so that the CAKE emitted to Farms is minimal, ensuring continued growth in TVL and trading volume. The Kitchen also plans to improve education on using v3 Farms, reducing reliance on incentives and helping users better understand providing liquidity.
Exploring Additional Revenue Streams and Standing Out from Competing DEXs
In the AMA, Chef Mochi revealed that PancakeSwap has several new products planned for Q2, with the goal of growing user count revenues and CAKE burn. These products, a mix of more established and experimental offerings, aim to help the platform explore additional revenue streams.
When asked how PancakeSwap would stand out from other DEXs if the APY for the CAKE pool were to change, Chef Mochi outlined several factors that set PancakeSwap apart. These include liquidity mining rewards, a broader product suite that complements each other, unique integrations, and staked CAKE supported by product benefits. Furthermore, he emphasized that the proposed reduction in APRs aligns PancakeSwap with other DEXs, not lower, ensuring that it remains competitive.
Addressing Community Concerns and Future Prospects
Responding to a question about the lack of an option to cut rewards directly to 0.35, Chef Mochi explained that the community’s feedback played a significant role in shaping the proposal options. Many community members felt that an immediate cut would be too drastic, given the long duration of the lock. As a result, two options were drafted, featuring various initial reductions and timelines to reach the most voted-on 0.35 CAKE/block emission rate.
The PancakeSwap AMA demonstrated the team’s dedication to sustainable growth and rewarding long-term stakers. The revised Tokenomics v2.5 proposal, the expansion of CAKE availability on other chains, and the exploration of deflationary models all contribute to the platform’s continued development. With a strong commitment to transparency and community engagement, PancakeSwap looks set to maintain its leading position in the decentralized exchange space.
