August 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.

This is especially important as this time 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 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.

PancakeSwap Growth Model and Pool Rewards

From the start, the "stake CAKE, earn CAKE" Syrup pool has been rewarding stakers with 10 CAKE per block. It has been the biggest source of CAKE emissions in our PancakeSwap product line.

For the past 2 years, over the countless emission reductions, we have not reduced emissions to Syrup Pool…

This was due to two major reasons:

Reason 1: Our initial product lines were MVPs (Minimum Viable Products), and therefore with the old MasterChef, it was technically infeasible to adjust many key parameters, including Syrup Pool Emissions.

Reason 2: The extremely high APRs offered by Syrup Pool allowed us to establish ourselves as the dominant AMM and one-stop shop for all things DeFi on BNB Chain.

Now, as we transition towards a more medium-term growth model, we have addressed Reason 1 by evolving beyond our MVPs, with numerous upgrades to our core infrastructure (e.g. MasterChef), products (IFOs), and token utility (iCAKE, vCAKE, etc.).

The other prong of this transition involves moving forward from a growth-at-all-costs model, to a sustainable growth model. Besides increasing use-cases and organic demand for the CAKE token, we also need to closely monitor and fine-tune the supply path. This refers to Reason 2, which we have been continuously addressing through emissions reductions and are proposing to address in this proposal.

Moreover, as we have already reduced Farm Rewards emissions by 87.5% (back in the days, it was 30 CAKE per block!), there is already extremely large diminishing effects to reducing emissions to Farm Rewards without reducing Syrup Pool emissions too.

Therefore, for all these reasons, we believe that the time is ripe for our first emissions reduction on our CAKE Syrup pool.

Even though the impact of the reduced Syrup Pool emissions will be comparatively small on the APR/APY of the CAKE Staking Pool, this proposal, if passed, would accrue significant benefit to the long-term sustainability and future development of PancakeSwap.

As always, if you have any questions, please let our lovely admins know, and the kitchen will aim to address your concerns.

Example of Adjustment

Based on data extracted on 8 Aug 2022, a rough gauge of the impact of the pools emissions reduction is as follows:

Emissions towards CAKE Pool	10	9.75	9.5	9
Flexible Staking Pool	3.78%	3.69%	3.60%	3.41%
Fixed-Term Staking Pool	58.94%	57.47%	55.99%	53.05%

Adjustment Options

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

❌ No change:

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

🔥 0.25 CAKE per block reduction (2.5%) to Syrup Pools rewards:

• 9.75 CAKE per block go to Syrup Pools
• Total emissions: 13.50 CAKE per block (including Farms)

🔥🔥 0.50 CAKE per block reduction (5.0%) to Syrup Pools rewards:

• 9.5 CAKE per block go to Syrup Pools
• Total emissions: 13.25 CAKE per block (including Farms)

🔥🔥🔥 1.00 CAKE per block (10.0%) reduction to Syrup Pools rewards:

• 9 CAKE per block go to Syrup Pools
• Total emissions: 12.75 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.