Proposal to Increase Farms Emission Cap for Ethereum PancakeSwap v3

To increase TVL and trading volumes on Ethereum PancakeSwap v3 – ultimately increasing CAKE burn –, we propose to increase the Farms emission cap from 0.3 CAKE/block to 0.4 CAKE/block within Q2 2023.

For clarity, this does not mean that we will be increasing the emission rate from 0.3 to 0.4 CAKE/block immediately. Rather, this gives us the ability to increase the emission rate when it benefits PancakeSwap to do so, such as offering incentivised Farms to strategic ETH partners.

Proposal Summary

• Current ETH PCS v3 Farms emission rate: 0.3 CAKE/block
• Current ETH PCS v3 Farms emission cap: 0.3 CAKE/block
• Proposed ETH PCS v3 Farms emission cap: 0.4 CAKE/block

Background on Ethereum PancakeSwap

Ethereum PancakeSwap v3 has seen modest success since its launch in early April. It is consistently a Top 10 DEX on Ethereum by volume, averaging ~$37M in weekly trading volumes, and has amassed $45M in TVL till date.

We have onboarded liquidity of retail-friendly projects from various verticals, including liquid staking derivatives (LSD), decentralized finance (DeFi), infrastructure, and more.

To supercharge our growth on Ethereum, we are requesting a higher Farms emission cap to attract liquidity from more high-quality projects.

Having greater TVL would allow Ethereum PancakeSwap v3 to receive higher trading volumes due to lower slippage and better price execution. Specifically, on ETH Mainnet, due to higher gas fees, greater TVL is required for trades to be more cost-efficient and regular. Ultimately, greater TVL would translate to increased CAKE burn accrued from higher trading volumes.

What benefits does this bring to the PancakeSwap community?

• More Syrup Pools on ETH PCS - more opportunities to earn yield with CAKE, increasing its utility
• More Farms on ETH PCS - more opportunities to provide LP to earn CAKE
• Higher TVL and trading volumes - greater value accrual to CAKE due to increased CAKE burn

Where will the increased emissions come from?

As mentioned in the multichain vote proposal, PancakeSwap has obtained approval to use up to 1.25 CAKE/block for its multichain expansion plans.

The proposed increase of the Farms emission cap by 0.1 CAKE/block will come from this multichain allocation that was previously set aside. PancakeSwap’s current CAKE burn rate of ~35.39 CAKE/block will not be changed by this proposal.

Why now?

As Ethereum PancakeSwap v3 has reached the Farms emission cap set by this earlier proposal, the Kitchen sees the need to increase the cap now to continue building our partnerships pipeline.

More partnerships will be announced in the coming weeks. This increase in the Farms emission cap will support our goal of establishing more high-impact Farms/Syrup Pools that will ultimately increase TVL, trading volumes, and CAKE burn.