CIP #14 - Handling Unlocked CAKE Post-Tokenomics 3.0

Abstract:

Following the adoption of PancakeSwap’s Tokenomics 3.0 proposal, all CAKE previously locked as veCAKE has been unlocked — including the ~13M CAKE held by Cakepie. This proposal seeks DAO consensus on whether to accept PancakeSwap’s $1.5M CAKE compensation offer and proceed with 1:1 mCAKE redemption, or reject the compensation while still committing to a 1:1 redemption model as required by Pancakeswap to enable withdrawal of Cakepie’s CAKE treasury.

Motivation:

With veCAKE deprecated, Cakepie’s CAKE will soon be eligible for withdrawal. However, PancakeSwap has stated it will only whitelist Cakepie’s address to withdraw the unlocked CAKE if Cakepie DAO commits to honoring a 1:1 mCAKE → CAKE redemption model.

As such, regardless of whether the DAO accepts PancakeSwap’s compensation, a 1:1 redemption mechanism must be implemented to enable withdrawal of Cakepie’s treasury. The difference between the two options lies in whether to receive the $1.5M CAKE compensation, which PancakeSwap has offered primarily to compensate CKP holders, provided that the 1:1 redemption portal is launched in a timely manner.

Additionally, this proposal includes a technical adjustment: reducing the lock duration of mCAKESV to zero, allowing mCAKESV holders to participate in the redemption process alongside mCAKE holders.

Specification

In light of PancakeSwap’s stated condition that withdrawal of Cakepie’s unlocked CAKE is contingent on implementing a 1:1 redemption model, this proposal presents two paths forward.

Option 1: Accept PCS compensation

• Cakepie DAO retains no discretion over how the 13M CAKE is distributed as PancakeSwap has informed the Cakepie team that CAKE withdrawal will only be authorized if Cakepie DAO commits to 1:1 mCAKE redemption.

• mCAKE holders will be able to redeem 1 mCAKE for 1 CAKE.

• Cakepie will launch the redemption portal shortly.

• Lock time for mCAKESV will be reduced to 0 to enable redemption.

• Cakepie DAO will receive $1.5M in CAKE from PancakeSwap, primarily intended to compensate CKP holders including vlCKP.

• PancakeSwap will publish details of the $1.5M CAKE compensation at a later time. A follow-up proposal may be introduced if Cakepie DAO is given discretion over how the compensation is ultimately allocated.

Option 2: Decline PCS compensation

• Cakepie DAO retains no discretion over how the 13M CAKE is distributed as PancakeSwap has informed the Cakepie team that CAKE withdrawal will only be authorized if Cakepie DAO commits to 1:1 CAKE to mCAKE redemption.

• Cakepie DAO will not receive the $1.5M in CAKE compensation from PancakeSwap.

• As a result, CKP and vlCKP holders will not receive compensation from PancakeSwap.

• A follow-up governance proposal may be introduced to determine how to proceed within these constraints. We encourage the community to share their thoughts and ideas in the Cakepie governance forum to help shape the next steps.