The Importance of Locking Alongside Burning Rate for CAKE’s Sustainability

Governance Tokenomics
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Hello,

I’d like to share some thoughts regarding the strategic direction of PancakeSwap and the management of CAKE. Observing the current numbers, it seems that the market cap of CAKE does not reflect the value the platform provides. In my opinion, this is primarily due to the token’s price, which is heavily influenced by scarcity.

While deflation through the burning rate is important, I believe locking is equally crucial. At the moment, the veCAKE model underperforms, offering just a 5% return for a 4-year lock, making it less competitive compared to other DEXs.

In my view, a major missed opportunity is the use of third-party incentives. Unlike other DEXs, PancakeSwap has not fully invested in this. Third-party platforms do not operate efficiently, as seen in the incentives-to-emissions ratio offered to LPs. If such incentives were managed internally by PancakeSwap, they would be more effective, benefiting users who lock their CAKE and, in turn, increasing the total locked supply while reducing the circulating supply.

To reach this conclusion, I have recorded and studied the following KPIs: Total locked CAKEs, circulating supply, CAKE price, and CAKE/BNB ratio, Hiddenhand & StakeDAO incentives / Emissions ratio.

I believe deflation alone will have minimal long-term impact if lockings decrease and the circulating supply continues to grow.

Thank you for considering this!

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Interesting perspective! While I’m not deeply into PancakeSwap, I’ve seen how platforms like CapCut, a video editor, thrive by balancing user incentives and features. For instance, CapCut Pro’s value proposition—providing advanced tools for creators—could be a lesson in offering meaningful rewards to keep users engaged. Applying a similar mindset to PancakeSwap, focusing on enhancing the user experience and creating compelling lock-in incentives might help drive long-term value for CAKE. Curious to see how this discussion evolves! :grinning: :grinning:

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Hello everyone! I think that being a true believer and supporting Cake since its beginning, it would be interesting if the way incentives for blocks longer than a year (which is still a short time) are approached could obtain some more effective return, since in general these options presented by third parties, although they somewhat increase the rewards for veCake, in my opinion are somewhat insufficient for now, taking into account that the blocked Cake cannot be used before the unlocking date and that can also generate doubts about the benefits of blocking for 4 years and the benefit we are obtaining from that.

In addition to outsourcing many things, this is sometimes accompanied by processes that not everyone is willing to carry out.

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