June 2022 CAKE Emission Reduction

It has been a while since we did the last CAKE emission reduction, but we know it’s one of the most discussed topics in the community. As our goal is still for CAKE to become emission neutral or even deflationary, we wish to continue the conversation with our community, and hear your thoughts.

Read before voting

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

• Read and digest the CAKE Tokenomics documentation
• Read this proposal in full;
• Make up your mind, and cast your vote!

Why reduce emission?

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

What are the downsides?

Reducing CAKE that is distributed to farms has negative effects, and the proposal options we are providing take this into consideration.

If we were to burn 1 additional CAKE per block, our CAKE-BNB APR may drop by roughly 12%. This is likely to have a negative impact on liquidity for our platform, and also affects the many projects we support here on PancakeSwap.

This is why, to keep our farms at a healthy APR, and to encourage liquidity on our platform, we are proposing the following options: no change, 0.25 CAKE per block reduction, and 0.50 CAKE per block reduction.

To give you a better idea of the effect of reduced CAKE emissions on farm APR, consider the following examples to see how the proposed reductions might affect the APR:

Total Emission Reduction Per Block	No change	-0.25	-0.50
CAKE Allocated to Farms & Lottery Per Block	4.25	4.00	3.75
CAKE Emissions Per Block	14.25	14.00	13.75
Est. CAKE-BNB APR (40x Multiplier)	30%	28%	25%

Many projects’ farms with lower multipliers will also have their APRs reduced.

But we need to become deflationary! Inflation is too high already!!!

We agree. It’s absolutely still the goal to keep CAKE “emission neutral” or “deflationary”. That said, given the current state of the market, it might be time to ease up on the aggressive emission reduction… for now. There’s a fine line between supply reduction, and damaging the farm APR.

So, to make sure we keep supply low, we’re constantly working on more ideas that will instead contribute to bigger and bigger weekly CAKE burns. Stay tuned!

What's the current supply?

So far, effective CAKE emission per block has already dropped from 40 CAKE / block to only 14.25 CAKE / block.

We also burn CAKE from an increasing number of sources every week, such as our trading fees. Check out the list here:

https://docs.pancakeswap.finance/tokenomics/cake/cake-tokenomics#other-deflationary-mechanics

After these burns, our net CAKE emission per block has been ~ 11 CAKE / block for the past few months.

You can view our current supply on tracking sites, such as CoinGecko, CoinMarketCap, or check out our Supply API.

Proposals:

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

❌ No change:

• 4.25 CAKE per block go to Farms
• Total emissions: 14.25 CAKE per block (including Syrup Pools)

🔥 0.25 CAKE per block (5.88%) reduction to farm rewards:

• 4.00 CAKE per block go to Farms
• Total emissions: 14.00 CAKE per block (including Syrup Pools)

🔥🔥 0.50 CAKE per block (11.76%) reduction to farm rewards:

• 3.75 CAKE per block go to Farms
• Total emissions: 13.75 CAKE per block (including Syrup Pools)

⚠️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.