I have a proposal to increase (a lot) CAKE burns with a simple solution without altering emissions.
Firstly, I apologize for any errors in English, I´m not native.
My proposal aims to significantly increase CAKE burns with a simple solution that already exists working model.
Here’s how it works:
The largest aggregator on Solana, Jupiter, has a service that charges 0.1% on swaps and is worthwhile for users intending to make a swap, for any transaction above $20k depending on the size of the liquidity pool. That’s why it’s widely used.
How does it work?
Example:
Swapping for example 1,000 ORCA for USDC has no impact on the price.
But swapping 17,000 ORCA for USDC has a -2.78% impact on the swap.
How was this solved?
There’s a service called Dollar Cost Averaging (DCA) solution to enable users to automate the purchase or sale of any tokens at regular intervals over a certain period of time. DCA can significantly soften price impact.
In the example above, where there was a -2.78% impact on the operation. Now it DCA the price impact dropped to 0.22% (in single wallet approve) an operation where 30 swaps are made at intervals of 1 minute each (we can establish the quantity and time interval).
See below new price impact
We can even control the price limit for the swap to occur.
All of this with a ONE single approval in the wallet.
Detailed instructions can be found here:
What’s my proposal?
That PancakeSwap implements this service charging 0.1%, which will be converted into CAKE burns.
A quick analysis: imagine 0.1% of part of PancakeSwap’s daily volume at a conservative value of $150 million in daily operations goes to DCA. That’s $150k per day, $1,050,000.00 per week of additional CAKES being burned.
I thank the DEV’s for all the work done on the protocol and the entire team around PancakeSwap. I’ve been here since the first week of launch.
Thanks for the idea and your walkthrough of how this is implemented on Jupiter + the numbers are very helpful. We’ll look to see if we can implement this (or a variant of this).
I like this idea of a TWAP + variable order mechanism that generates value for users – which is a strong win in my books.
At the same time, the protocol can charge a small fee for this function, that doesn’t significantly affect the value for the user, but when aggregated, generates significant value for the CAKE community.
The outcome of lower price impact, better execution, and an additional source of protocol revenue (going to CAKE burn) is indeed interesting.
Thank you for the suggestion! I also love the clickbait title lol, grabbed my attention.
Hi @ChefMochi, what wonderful news that is possible to implemet! I am very happy to be able to help PancakeSwap in some way and total gratitude to the DEV’s team that builds so much. And I leave my praise to @Juapia who provides the best assistance to the Brazilian community.
Thank you sir for the kind words! You have also always helped to build a strong PancakeSwap community. Thank you for always helping to build this beautiful community.
