CMP-2023/1 - Cycle-End Improvement

The scope of this proposal only includes changes to the end of cycle 1. Possible changes for cycle 2 will be presented in another proposal before cycle end.

CURRENT SITUATION The Cake Monster protocol runs in cycles, each cycle is 2 years long. A cycle ends:

• After 2 years (63072000 seconds)
• After about 4 months (124 days) of inactivity (inactivity means no manageReserve() calls = kitchen make)
• If supply is equal to or below 1 million

If the cycle has ended based on the above rules, then anyone can call the finish() function on the smart contract.

In detail the cycle finish action will execute the following tasks:

• Time of finish is stored
• Liquidity of the main LP pool owned by the protocol is removed
• Any MONSTA remaining in the kitchen (reserve) will be burned
• Vaults will finish:
  • BNB vault will store the total supply at the time
  • CAKE vault will withdraw all CAKE from staking at PCS & store supply at the time
• Total current supply of MONSTA will be stored
• A snapshot of all holders will be created
• New total supply will be reset to 10 billion
• MONSTA trading will be halted for 35 days

Once the cycle has been finished anyone can claim their vault share for a period of 35 days. The claim action consists of the following logic:

• Determine share of the MAV(Multi-Asset Vault) *excluding community wallet
• Burn holders MONSTA
• Mint new MONSTA for holders in proportion to the new supply of C2
• Reset holder activity to 35 days in the future
• Send vault shares of CAKE & BNB to holder

After 35 days (3024000 seconds) since the cycle finish action was called, anyone can call the bigReset() function on the contract. The big reset will do the following:

• Protocol start time is reset to the current time
• Vault claims are halted
• Vaults will reset & start with the amount of CAKE/BNB left
• MONSTA will be minted to the kitchen (reserve) to fill the current total supply up to 10 billion tokens
• Liquidity will be added to the main LP pool based on amount of MONSTA & BNB in the kitchen (reserve)
• Burn any left-over MONSTA in kitchen (reserve) after liquidity addition
• Mint MONSTA in LP pool to fill total supply up to 10 billion tokens
• Sync main LP pool
• Create a new base snapshot for crumbs (1st snapshot of new cycle)
• MONSTA trading is resumed

IN SUMMARY Once the cycle has ended, liquidity will be removed from the protocol-owned LP. MONSTA in the kitchen is burned, vaults are released & trading will be halted. Holders can claim their vault share & will receive new MONSTA minted proportionally to the new supply. After 35 days vault share claiming will stop, liquidity will be added again to the main LP & MONSTA will be minted in the LP pool to fill up the total supply to 10 billion. Trading will be resumed. CONCLUSION As you can see from the above, the whole cycle end & reset is a complicated system of processes that can introduce unexpected side-effects or results. Also, the trading will be halted for 35 days which could introduce unexpected issues with third-party services (like analytics tools, aggregators, or dexes).

We think this whole process can be simplified & improved resulting in a more sustainable, healthier & transparent protocol environment.

💡 PROTOCOL IMPROVEMENT PROPOSAL On cycle end, keep existing liquidity, no liquidity removal & addition & no minting to LP. Continue trading as usual & allow holders to claim their vault share based on the MONSTA holdings snapshot created on the cycle end (similar to claiming crumbs). Allow 30 days of claiming the vault share (previously 35 days). After these 30 days, anyone can call the function which will trigger the new cycle (rename bigReset() function to startNewCycle()). This trigger will create a snapshot of all MONSTA holdings at that time. This will allow all holders to claim their extra MONSTA (newly minted, proportional) to fill the total supply up to 10 billion again. This can be done for 14 days, after that claiming new MONSTA stops. Any unclaimed MONSTA will not be minted & is therefore effectively burned from the new total supply of 10 billion. The protocol continues to run as usual.

📄 IN SUMMARY

• Keep existing liquidity, no liquidity removal & addition, & no minting to LP
• No trading halt (allow trading during claiming period)
• Claiming the MAV shares works similarly to crumbs claiming
• Max 30-day claiming period (instead of 35)
• After the claiming period a new cycle starts (current bigReset() function will be named startNewCycle()) & everyone who holds MONSTA can claim their cycle 2 tokens proportional to their share of cycle 1
• Cycle 1 holders will be able to claim their newly minted cycle 2 MONSTA for a period of 14 days after the new cycle started
• After 14 days any unclaimed cycle 2 MONSTA will not be minted & effectively be burned from cycle 2 supply

✅ CONCLUSION These changes to the protocol will reduce the complexity of the protocol code & inner workings, & therefore minimize security, technical, or external dependency risks. Maintaining trading activity during the claiming phase at the end of the cycle will also help make the Cake Monster protocol more sustainable, keep the community active, & preserve overall project transparency. The changes will make it much easier for holders to understand & strategize about their MAV shares, & to claim.