December 2022 CAKE Emission Reduction

The last CAKE emission reduction was done in August, and we know CAKE emissions continue to be one of the most discussed topics in the community. As our goal is still for CAKE to become emission neutral or deflationary over the longer term, i.e. ultrasound CAKE, we wish to continue the conversation with our community, and hear your thoughts.

As illustrated in this graphic, we are on track to ultrasound CAKE, and with the different options, we hope to get even closer!

As per the previous Syrup Pool adjustment, we will be proposing some options with regard to the Syrup Pool emissions, not the Farm Rewards emissions.

Read before voting

Before you vote, please make sure you understand the impact of the long and short term effects of CAKE emissions changes on our tokenomics.

1️⃣ Read and digest the CAKE Tokenomics documentation

2️⃣ Read this proposal in full;

3️⃣ Make up your mind, and cast your vote!

Why reduce Pool emissions again?

The end goal of reducing emissions is to make CAKE “emission neutral” or “deflationary, i.e. “ultrasound CAKE”. That means, on average, the amount of CAKE burnt per block will be more than the amount of CAKE minted.

Since the last August Pool emissions reduction, we have observed the following:

1️⃣ Token prices have generally been impacted by the bear market, but CAKE price and staking yield have held up relatively well compared to the broader market and other DEXs.

2️⃣ PancakeSwap has completed and launched several of its Q3 and Q4 roadmap items (Aptos multichain launch, Ethereum multichain launch, Stableswap on BNB Chain), successfully redirected some of the proposed Syrup Pool emissions to farms on other chains and products.

3️⃣ However, with general crypto activity slowing in recent months, we have not been able to redirect as much CAKE emissions as we had initially planned for.

4️⃣ For the current Ethereum and Aptos farms, the redirected emissions from Syrup Pool is approximately 0.09 CAKE/block, with more redirected emissions expected as new farms and pools are launched on these chains.

Therefore, we propose to reduce Syrup Pool emissions while still ensuring competitive yields for long-term CAKE stakers.

Example of Adjustment

Based on data extracted in mid-December 2022, a rough gauge of the impact of the pools emissions reduction is as follows:

Emissions towards CAKE Pool	8.91	8.41	7.91	7.66
Flexible Staking Pool	2.76%	2.60%	2.45%	2.37%
Fixed-Term Staking Pool (Avg.)	47.60%	44.97%	42.29%	40.96%
Fixed-Term Staking Pool (52W Lock.)	57.86%	54.67%	51.42%	49.79%

This is still highly competitive compared to single-staking token rewards for comparable DeFi DApps:

DEX	Single-Staking APR Annualized (%)	Details
Curve	1.39%	Assuming one-year stake
Uniswap	n.a.	n.a.
SushiSwap	10.55%	–

Adjustment Options

CAKE holders can vote for any one of these options at the bottom of this page.

❌ No change:

• ~8.91 CAKE per block go to Syrup Pools
• Total emissions: 11.16 CAKE per block (including Farms)

🔥 0.50 CAKE per block reduction (4.5%) to Syrup Pools rewards:

• ~8.41 CAKE per block go to Syrup Pools
• Total emissions: 10.66 CAKE per block (including Farms)

🔥🔥 1.00 CAKE per block reduction (9.0%) to Syrup Pools rewards:

• ~7.91 CAKE per block go to Syrup Pools
• Total emissions: 10.16 CAKE per block (including Farms)

🔥🔥🔥 1.25 CAKE per block (11.2%) reduction to Syrup Pools rewards:

• ~7.66 CAKE per block go to Syrup Pools
• Total emissions: 9.91 CAKE per block (including Farms)

⚠️Please note⚠️

One option must have a majority of 50%+ at the end snapshot in order to win the vote and be executed. If none of the options get over 50% of the vote, we'll create a new proposal.