Good afternoon PancakeSwap community and CAKE holders!🐰
We would like to offer a recap for those who couldn't join us for the live Ask Me Anything (AMA) session on Twitter Spaces, which took place on July 12th.
Our Chefs thoroughly reviewed the latest releases, shared valuable insights regarding the roadmap for the third quarter, and took the time to address inquiries from our beloved community.🤝
Participants: -Chef Mochi 🧑 (Head Chef) -Chef Bun 🐰 (Product Manager) -Chef Gyoza 🥞 (Product Manager) -Chef Fran 🧉 (Community Manager) -Chef Momo 🐇 (Technical PM)
Chef Fran🧉 was the AMA’s host.
🥀We miss our ever faithful and vocal participant Chef Icy.
Chef Mochi🧑: Hi everyone, good to see you all again.
The Kitchen and PancakeSwap were buzzing in Q2. We started with the launch of PCS v3, which along with our v2, continues to help us be the leading DEX on the BNB Chain. Also, on Ethereum, PancakeSwap is a top 10, sometimes top 7 DEX by trading volume. Alongside our DEX, we've pushed out many upgrades and new products.
The first iteration of bCAKE for v3 allows you to earn boosted CAKE emissions for CAKE pairs if you stake CAKE on PCS, bringing additional utility to CAKE stakers. We launched a few Ethereum Syrup Pools, a first in PancakeSwap history. We launched Liquid Staking for ETH on both BNB Chain and Ethereum, allowing our community to earn ETH staking rewards. Our very popular Pancake Protectors was also launched in May and now has 20k daily active players. Lastly, we deployed on Linea Testnet and Polygon zkEVM mainnet. We even managed to help users buy crypto directly via credit cards and tokens like ARB and OP on BNB Chain. Even by PCS's development standards, Q2 was an outstanding quarter, as we expanded in many different areas.
With the ambitious roadmap, we still have some things we are almost completing from our Q2 to-do list. They are the revenue-sharing contracts from our tokenomics vote and the Simple Staking integration, where you can earn by depositing just one token. We are still looking for a quality Ethereum-based project to do an IFO with. I'm excited about what's coming ahead in Q3.
Q1. Chef Fran 🧉: When is revenue sharing expected to begin for holders who have staked long term? What changes with revenue share being a pool?
A. Chef Bun 🐰: It is coming very, very soon. We are now in the final testing and security auditing phase. Which could take some time, but it will be worth the wait. Once the product is announced and the pool is deployed, existing locked staking users can join on day 1. At the same time, new users can also participate by starting locking CAKE. More news about the mechanisms will be shared closer to the launch date.
I'm unsure if I'm getting it correctly for the second part of the question. I assume the question is "will the distributions of the trading fee income change once we have the revenue sharing pool in place?" And the answer will be "no"
The trading fee distributions will remain the same for liquidity providers as well as the CAKE burn. The kitchen will use the budget from the protocol part of the trading fee income.
Q2. Chef Fran 🧉: Why were there no Ethereum IFOs last quarter? They were part of the Q2 roadmap. Do you still have plans to do IFOs on Ethereum?
A. Chef Mochi🧑: Looking at the fundraising situation on established chains, such as Ethereum, not many projects were of the quality we expect from IFOs.
Where possible, we will continue to pursue IFOs. In terms of Private Sales, we will look towards implementing them on other chains too, though given the cross-chain messaging required, the technical requirements may take some time to sort out.
The chefs are working hard to bring IFOs to the community!
Q3. Chef Fran 🧉: In the last quarter, why didn’t PancakeSwap complete all the promised items as per the roadmap? What’s your general approach for delivering the roadmap items? Does your priority change mid-way to focus more on other things?
A. Chef Mochi 🧑: We generally try to finish everything in the roadmap as we have already decided that these are important items. However, planning for everything to be released exactly as described in each quarterly roadmap is difficult. Several things may affect the Kitchen's preferred timeline, and we keep the roadmap somewhat flexible to maximize community benefits or developments beyond the current quarter. Two examples of things that affect timelines are:
-Reliance on 3rd parties. This is mostly outside the Kitchen's control since we cannot force our partners to work to our roadmap. For this same reason, we have items we work on that are not on the roadmap if we have yet to determine when they will move forward in a timely manner.
-Efficiencies from changing timelines: Certain opportunities may arise where it is more efficient/beneficial to change priorities temporarily. For example, we deployed on Linea Testnet and Polygon zkEVM Mainnet even though we indicated only one chain deployment for Q2. Linea's Testnet allowed users to participate in the Linea Voyage Testnet quest, where users can receive an NFT from Linea for participating in the quest. This was timebound by the duration of the Linea Voyage quest.
We seek the community's understanding that the roadmap is a general guide, and we try as best to complete everything within the indicated time. Still, various factors will affect timelines. This has been the case for previous roadmaps and future roadmaps.
Q4. Chef Fran 🧉: The gauge system will be huge and attract much utility to CAKE. Have you already designed the system and how it will interact with the farm, bCAKE, and Farm Auctions
Chef Bun🐰: Yes, indeed. We have been internally thinking and designing a gauges system for PancakeSwap. Even back in early 2022. But now, it is the right time to bring it to the table. Combined with our multichain expansion plan, we are excited to see all the new developments and opportunities it will bring to the PancakeSwap tokenomics.
We can't reveal too much detail at the moment. Still, it will be one of the essential parts in the CAKE tokenomics to help shape the future of PancakeSwap. It may start small, but eventually, it will expand and become more involved regardless of the products or, better, regardless of the blockchains.
Q5. Chef Fran 🧉: Does the upcoming vCake Gauge Design show previous completed votes?
A. Chef Bun 🐰: The new gauge system is not designed to completely replace the Snapshot voting we have been using. It will be more of an addition as community governance in PancakeSwap extends far beyond the scope of CAKE emissions. But the fact is, in both systems, the more CAKE you lock, the more voting power you will have. And the benefits are shared across them seamlessly.
While the new gauge system allows CAKE holders to be more involved in shaping the distribution of rewards and emissions in the PancakeSwap ecosystem, it also incentivizes users to acquire and lock CAKE.
We believe this hybrid system will work the best considering our suite of products and our community.
Q6. 🧉: What are the Multichain plans in 2023?
A. Chef Mochi🧑: PancakeSwap strongly believes in the multichain future, and many rollups are working toward this vision. While they are early in terms of development now, they present an opportunity for PancakeSwap to join and grow with them before the main ecosystem DeFi players are set. By being on these chains early, PancakeSwap also allows our users to participate in them early and for the community to benefit from their growth alongside us.
This quarter will be one where PancakeSwap joins promising L2s to grow our reach to all DeFi users. Please follow us on Twitter, TG, and Discord to see where we're heading next.
Q7. 🧉: When can we expect a change in the CAKE hard cap? Or is it going to remain the same as now?
A. Chef Mochi🧑: Thanks for the question - please refer to my Twitter account, where I discuss this in detail. In short, the Kitchen knows that CAKE emission has started to taper off quickly, and the total CAKE supply will likely remain around 400m in the medium term. However, because more chain deployments are coming up, we are waiting to see what emissions we will need on those chains before we decide to lower the 750m hard cap.
Q8. 🧉: Do you have any plans to launch pancakeswap own hardware wallet or own app?
A. Chef Mochi🧑: An app is an idea that is interesting. We will think about it!
Q9. 🧉: What is universal router? Would it be something similar to the DEX aggregators that exist on the market? Would we use liquidity from other DEXs? What value would this add to PancakeSwap?
A. Chef Mochi🧑: The universal router combines ERC20 tokens and NFT swapping into a single swap router. This gives users maximum flexibility in performing token swaps across different liquidity pools on PancakeSwap. Universal Router is unlike DEX aggregators as it only taps into PancakeSwap's liquidity pools.
The key technology that will add value to PancakeSwap and its users will be Permit2. Combined with Universal Router, Permit2 allows users to safely share and manage approvals across different smart contracts with our partners. All transactions are encoded using a string of commands, which enables users to batch approve multiple tokens and execute multiple transfers with just one transaction. We intend to roll Permit2 and Universal Router out on all chains.
Q10. 🧉: Uniswap V4 brings things that already had in Balancer V2, Including dynamic fees and also all pools are under a single contract. Uni v4 also brings hooks and Balancer does something cool like depositing some liquidity of liquidity pools into lending protocols. So where are chefs looking in research for more long-term improvements to AMM?
A. Chef Mochi🧑: We think the biggest issue is improving organic LP returns to counter impermanent loss. I will let Momo touch on this later.
Q11. 🧉: What is dynamic fee in the roadmap? How does it work ? How will it be handled? With volatility, volume, or time?
Chef Momo 🐇:
Dynamic fee is a variable fee component charged to Traders / Arbitrageurs to help mitigate IL for the LPs. We will release the exact working mechanism post-deployment. On a high-level, it penalizes arbitrage trades leading to more price divergence and higher IL for LPs.
Dynamic fee will be charged on tokenOut, i.e., it retains more valuable assets in the pool.
With volatility, volume, or time?
While building our model, we have looked at several existing volatility-based models. These models relied on: Backward-looking volatility estimation: Various factors, such as economic shifts and regulatory changes can alter volatility, retrospective approach is a lagging indicator. Reliance on several factors for estimation: runs the risk of overfitting that can result in inaccurate predictions for unseen data
Our model doesn’t rely on multiple external factors or tries to predict volatility. It benefits from the inherent trading behavior of arbitrageurs in different market regimes. Thus, it automatically adapts to changing volatility/market conditions.
We have done extensive backtests and have seen a 1.2x (low volatility) to 1.8x (high volatility) increment in fees collected by LPs during different volatility periods helping in significant IL recovery.
Q12. 🧉: Would you consider launching insurance on assets staked on your platform?
A. Chef Mochi🧑: Not in the short-term. We find that insurance on DeFi assets has not always worked very well on other platforms, and PancakeSwap doesn't have core competitiveness in assessing the risk/reward analysis of black swan events in DeFi/crypto in general. We try our best so that none of our protocol's products have any risks, but we don't know how to quantify and monetize those risks.
Q13. 🧉: What does Simple Staking mean? Will we have added liquidity with single tokens instead of a pair?
Chef Gyoza🥞: Simple staking is a product that offers single-sided staking in partnership with Binance Earn. Users can stake several tokens for a locked period of days to earn APR. PancakeSwap users who are CAKE holders + stakers will be able to get an extra APR boost.
Q1. Goldchain: On the Q3 roadmap is listed that we will get a v3 Position Manager. Are there any details we can already know about?
A. Chef Bun 🐰: We have an exciting marketplace-like system coming soon. It will allow you to access, evaluate, and participate in various V3 position managers and liquidity automation providers, all within the PancakeSwap interface. You won't need to leave the platform.
We're currently working on developing our in-house strategies for the PancakeSwap community. These will have unique tweaks and clever designs specifically tailored.
Additionally, we have been actively collaborating and aligning with many industry-leading partners. We are in the process of onboarding them, and you can expect to hear news about these partnerships very soon.
Q2. Luxury Rich: Concerning the revenue sharing, is it going to be a permanent program or are there going to be any further future adjustments?
A. Chef Bun 🐰: Once the deployment takes place, unless there are any major unexpected changes, we can consider it permanent. However, we prefer not to use that term. Any future adjustments will also involve community decisions. This program is designed to be long-term and dedicated to benefiting all CAKE lockstaking users.
There will be adjustments, such as allocating a certain amount of monthly or weekly revenue from the treasury to locked staking users. Depending on market conditions and external factors, we may consider adjusting the ratio or amount in the future. But overall, the program itself is expected to be long-term.
A. Chef Mochi🧑: The concept of revenue sharing is based on the CAKE tokenomics decision proposal, where we collectively voted on the future direction of CAKE staking. We are committed to transitioning into a low inflation, net zero inflation, and eventually a net deflationary phase as the vote has closed.
The revenue sharing idea ties the CAKE token more directly to PancakeSwap's growth as a protocol. Therefore, what CAKE stakers receive is tied to the growth of PancakeSwap. This revenue sharing model is intended to be a long-term initiative that grows alongside the protocol.
Q3. Luxury Rich: Are there any plans for giving more utilities to PancakeSwap NFTs?
Chef Mochi🧑: In the Pancake Protectors game, we introduced an experience where PancakeBunnies and PancakeSquad take center stage. They provide additional buffs and strategies to strengthen your heroes.
We believe NFTs and games are a great fit, and while we focus on supporting the current game for the long term, we are open to exploring more ways to incorporate NFTs in social and gaming settings. Developing and supporting games requires careful consideration, and we are dedicated to improving the Pancake Protectors game with our partner, Mobox. While we have future plans, we don't have a specific timeline at this moment.
Thanks for reading. Join us on Twitter, Telegram, in our Discord server, or our growing Reddit community!
Chef Fran🧉