PancakeSwap veCAKE Proposa

-Summary- To boost liquidity, reduce slippage, and increase volumes for STG-TOKEN pairs on PancakeSwap, PancakeSwap is requesting Stargate DAO to lock up the DAO’s existing holdings of ~82,000 CAKE as veCAKE for 4 years. This stash of veCAKE will be used to vote for STG-TOKEN gauges on PancakeSwap every 2 weeks, starting with the STG-USDC (0.25%) gauge on Ethereum PancakeSwap.

-Background- PancakeSwap is launching a new veCAKE gauge system, similar to Curve’s veCRV and Balancer’s veBAL. Users can lock up CAKE for a maximum of 4 years, and then vote for gauges on PancakeSwap every 2 weeks. Based on the amount of vote each gauge receives, the respective liquidity pair (e.g. STG-USDC) will receive a pro-rata amount of CAKE emission. This CAKE emission is used to attract users to deepen liquidity for the specific pair, reducing slippage and encouraging higher trading volumes for that pair. Stargate DAO currently has ~$5.8M of STG-USDC protocol-owned liquidity (POL) on Ethereum PancakeSwap. The POL has seen extremely effective utilization, with APRs currently at 17% based on CAKE incentives and liquidity provider fees.

By voting for this gauge (and other STG-TOKEN gauges in the future) with veCAKE regularly, the DAO can further deepen their liquidity on this highly effective trading venue.

-Proposal- a) Grant amount: PancakeSwap is requesting Stargate DAO to lock up 100% of the DAO’s existing CAKE holdings, of roughly ~82,000 CAKE at the time of posting, as veCAKE for 4 years. Stargate’s multisig currently has ~82,000 CAKE accrued from yield farming. Note: Due to the potential time difference between the posting and execution of this proposal, the final amount of CAKE locked up may be greater than 82,000 CAKE.

b) Use of grant: Stargate DAO will use the veCAKE to vote for the STG-USDC (0.25%) gauge on Ethereum PancakeSwap every two weeks. As PancakeSwap’s gauge system is multichain, it is possible to vote for STG-TOKEN gauges on other chain deployments as well.

c) Re-lock mechanism: To ensure the voting power remains high, Stargate DAO commits to re-lock the entire CAKE amount, including CAKE earned from emissions, regularly for 4 years. The community may enact another proposal if they wish to stop the re-lock process. Execution

If the proposal is successful, the Stargate team will lock all CAKE earned from yield farming (~82,000 at time of proposal) for 4 years as veCAKE. Once the veCAKE gauge system is live, Stargate will vote for the STG-USDC (0.25%) gauge on Ethereum PancakeSwap every 2 weeks and re-lock all CAKE (the original amount + new CAKE earned from emissions) for 4 years regularly. If the Stargate DAO enacts to seed liquidity for other STG-TOKEN pairs on PancakeSwap in the future, the Stargate team can direct all or some of the veCAKE voting power towards those gauges as well.

-Success- If successful, this proposal will result in a sustainable APR paid to Stargate DAO for hosting liquidity on PancakeSwap, enabling the DAO to further reap benefits from the deployment of its POL on a highly effective trading venue.