the main requests we see and get are 2 when it comes to the token in particular as we will be focusing on in this pot. (read on)
1) Increase APR
2) Stop all Emissions
👏They👏cannot👏both👏happen.
———
Q. Where does APR on farms and the CAKE-CAKE Syrup Pools come from?
A. From CAKE emissions.
⚠️If all CAKE emissions were cut to 0, APR would also drop to 0!
The CAKE you earn from the pools and farms are the CAKE that are emitted from each block. Emissions produce APR.
———
So what are we doing about inflation?
📉We reduce emissions gradually, every few months. We've already reduced from 40 to 9.9 CAKE /block.
FROM THIS
TO THIS
🔥We burn CAKE every week + add burning mechanisms in new products.
The goal is, and always has been, for more CAKE to leave circulation than enter.
Let's go back to September 2020 When PancakeSwap started, at that time $CAKE token was an unlimited token and later introduced burning mechanisms which started as burning daily but later moved to weekly which was also followed by its hard cap of 750M.
And it was a fair launch project. Supply started at 0 and there was no sale. People earned tokens by providing liquidity.
https://medium.com/pancakeswap/the-fairest-launch-ever-5b246644ba2a
so let's continue with the journey of cake token and how it improved over time, at the beginning cake started with an emission of 40 cake per block and all that 40 cake per block were entering circulation as there were no burnings at all, and burning mechanisms were introduced a few weeks after where the team started burning all its revenue generated from the exchange as only there were 3 main core products at the time, 1. pools, 2. exchange, 3. farms. only those were available back then no prediction no lottery none of that and other products you see and use today.
its use cases:
- Stake it in Syrup Pools to earn free tokens
- Use it in Yield Farms to earn more CAKE
- Buy Lottery tickets in the PancakeSwap Lottery
- Participate in IFO Token Sales
- Create your Pancake Profile and mint NFTs
- Vote on proposals relating to the PancakeSwap ecosystem
CAKE TOKENOMICS
But that's not all — there's much more on the horizon for CAKE!
and later the team started burning weekly to reduce workload as it is a manual process, and moving on as the team was adding and developing new products that have embedded burning mechanisms (fees collected while using the products) and the emission went from 40 and now down to 9.9 cake per block and all other 30.1 is burned. in only little over two years. while trying to keep attracting new users and incentivizing its long-term users.
Emission rate
Per block
| Metric | Emission/block (CAKE) | Emission/day (CAKE) |
|---|---|---|
| Emission | 40 | 1,152,000 |
| Burned Weekly | ~30.1 | ~866,800 |
| Effective Emission | ~9.9* | ~285,199* |
Distribution
| Distributed to | Reward/block (% of emission) | Reward/block (total CAKE) | Reward/day |
|---|---|---|---|
| Farms (BSC+ETH) | ~5.08% | ~2.03 | 58,544 (approx) |
| Farms (Aptos) | ~0.19% | ~0.08 | 2,275 (approx) |
| Lottery | ~0.35% | ~0.1389 | 4,000 (approx) |
| CAKE Syrup Pool | ~19.13% | ~7.65 | 220,380 (approx) |
| Total Daily CAKE Emission | 285,199 (approx) |
Why is the CAKE burn manual?
To hit the ground running, PancakeSwap launched as an MVP (minimum viable product) with the MasterChef contract emitting 40 CAKE per block. For that reason, the early team didn't add additional functions such as the ability to customize the CAKE minting logic. The team has been controlling CAKE emissions through a manual burn process by creating two pools in MasterChef v1:
- Legacy Lottery Pool (PID – 137) – burned CAKE from the lottery
- Burn Pool (PID – 138) – burned CAKE per block
These pools work similarly to the farms, where the Chefs can adjust the percentage of the 40 CAKE per block allocated to it after each CAKE emission reduction vote.
However, in April 2022, PancakeSwap migrated to a new MasterChef v2 contract. The ratio of the CAKE burn per block is finally controlled by a dedicated contract.
This allows the burn to be much more accurate. Due to MasterChef v2 occasionally harvesting the full 40 CAKE per block.
The supply shown on the homepage (or some 3rd party trackers) might suddenly jump by several million CAKE.
Don't worry – EMISSION IS NOW CONTROLLED CAREFULLY BY MASTERCHEF V2. CAKE TO BURN WILL NEVER ACTUALLY ENTERS CIRCULATION!
Currently, at the time of writing this post, there are 687,995,656. Burned to date. (not from the max supply as I explained above cake started as an unlimited token) will try to explain what I mean later in the post.
| Circulating Supply | 162,663,857 |
|---|---|
| Total supply | 358,196,331 |
| Max Supply | 750,000,000 |
| Market cap | $540 million |
| Burned to date | 687,995,656 |
| Current emissions | 9.9/block |
so as I mentioned above they later introduced burning mechanisms along with the cap supply of 750M and reduced emissions per block which the emission is currently at 9.9 per block out of 40 meaning.
30.1 cake per block is sent to the burn pool which is around (30.1 * 28800 block per day on BnB chain * 7) = 6,068,160 cake is burned weekly only from emissions without the burning mechanisms from different products like:
On August 11, 2022, Chefs implemented some configuration upgrades to take full advantage of MasterChef v2. It eliminates the 45,000 CAKE daily burn for the legacy lottery injections. Those burns will now be handled by MasterChef v2 directly along with the usual weekly CAKE burn. Therefore, the effective emissions are now even lower.
In addition to the above, a dynamic amount of CAKE is also minted to the Dev address at a rate of 9.09%. This means that if 100 CAKE are harvested, then 9.09 CAKE is minted in addition and sent to the Dev Address.
As well as the above, CAKE is also burned in the following ways:
| 0.0575% of every trade made on PancakeSwap V2 across: BNB Smart Chain Ethereum Aptos |
|---|
| 0.016%~0.06% of every trade made on PancakeSwap StableSwap |
| 100% of CAKE sent to the Dev address |
| 100% of CAKE performance fees from IFOs |
| 100% of CAKE spent on Profile Creation and NFT minting |
| 100% of CAKE bid during Farm Auctions |
| 20% of CAKE spent on lottery tickets |
| 20% of all profits from Perpetual Trading |
| 8% of the Pottery prize pot distributed each week |
| 3% of every BNB Prediction markets round is used to buy CAKE for burning |
| 3% of every CAKE Prediction markets round |
| 2% of every yield harvest from all the flexible staking positions in CAKE pool |
| 2% of every NFT sale on the NFT Market is used to buy CAKE for burning |
And the chefs aim to make deflation higher than emission by building deflationary mechanisms into PancakeSwap's products. The goal is for more CAKE to leave circulation than the amount of CAKE that's produced.
Reducing block emissions
By reducing the amount of CAKE made per block, we slow inflation. This has already been done once: Since the first reduction in block emissions, we've already effectively reduced the number of CAKE entering circulation from 40 CAKE per block to 9.9. But we don't want to do this too frequently, too early, we want to still incentivize people to provide liquidity.
How to Confirm CAKE Supply for yourself
To confirm that the circulating CAKE supply shown on the PancakeSwap homepage is correct,
- 1.Head to the CAKE token contract on BscScan and see how much CAKE is held by the Burn Address. That's the total amount of CAKE that's been burned (removed from circulation FOREVER, and impossible to ever retrieve).
- 2.Then, subtract this burned amount from the “Total Supply” that BscScan shows.
- 3.This gives you the actual CAKE supply.
So per the current emission rate we still have more than 3 years runway to reach our max supply of 750M.
More tools to measure it
data generated by one of the community members over time monitoring the cake token supply
here is also the reddit post linking to every burn that happen from little over one year ago:
🔥 6,808,702 $CAKE just burned – that’s $22M! from pancakeswap
more details read about the emission rate and deflationary mechanics here: CAKE Tokenomics
https://docs.pancakeswap.finance/tokenomics/cake/cake-tokenomics/
Here is also the cake litepaper
https://v2litepaper.pancakeswap.finance/
Hope this helps and clears everything up and gives the overall goal when it comes to cake tokenomics and PancakeSwap in general.
Oh not to forget CAKE token is now multichain when it's available on bnb chain and Aptos network with the same maximum supply and plays the role to even burn more cake.
Other Questions are WHY DON'T NFTs REQUIRE CAKE INSTEAD OF BNB?
The team want as many BSC users to come to PCS to use its NFT marketplace to make it the #1 NFT spot on the chain. Using BNB is the right choice for this goal. Using CAKE for it, while likely beneficial for the CAKE ecosystem, would not draw outsiders in.
It’s about removing barriers to be accessed and used easily by the whole ecosystem.
Overall the team always try to take the PancakeSwap ecosystem to the next level by always building, so it's hard to make everyone happy or fulfil their needs and desires when it comes to their investments but the team look at the bigger picture of the protocol as a whole while a win in the long run, aside that let's keep Staking, and enjoy other products.
Oh and Roadmap drops this month if all goes to plan, as PancakeSwap's quarterly roadmaps usually drop mid-first month of the quarter. Yeah you read that right, at PancakeSwap we drop roadmaps every quarter 🙂
Stake'Em!