Cake is the token you earn on PankcakeSwap - the most popular DEFI platform built on the Binance Smart Chain.
You can earn Cake by buying liquidity pool shares, by 'staking' a range of other tokens, and you can also earn by staking Cake in one the platform's own 'syrup pools'.
The main thing that might tempt you to buy into Cake is that the percentage returns paid out on staked-cake (paid out in Cake) are some of the highest available (at least if we disregard some of the crazy derivate tokens minted on the Cake platform itself which pay out even higher returns).
Some very crude math to figure out if it's worth buying Cake....
- There are currently 126 000 000 cake in circulation
- About 74 000 000 cake has been burned, or around 30% of the total supply printed.
- 750 000 new cake are printed every day
- That's around 500 000 more a day which won't be burned IF the current burn rates continue....
How much Cake needs to be bought and staked to maintain a $10 cake price?
Basically people need to buy this much more Cake than is sold in order to maintain cake at $10......
- 500 000 probably non-burned cake printed per day
- times 10 = $5 million of worth of cake bought per day.
- $50 million over 10 days
- $500 million over 100 days
- $1.5 billion over the course of the next year a year.
And if you want $20 Cake, then people need to buy twice as much!
The case for buying cake....
I think the DEFI run is far from over, and Pancake is well positioned to carry on controlling a substantial share of the DEFI market.
The platform's approachable and easy to use interface makes DEFI about as much fun as it can be - it makes pooling and staking for a yield appealing, even fun, so I can only see this attracting more crypto chasing some of the best APY there is.
And one of the key things which might encourage people to not just sell their cake (and thus maintain the price) is the excellent rate of return in the Cake syrup pools, of around 130% APY.
There are several burn mechanisms in place - not only 10% as standard, but also 9% of all cake used to purchase lottery tickets are burned, and cake is burned in the process of minting crazy derivative DEFI coins too.
And there's the fact that that the team behind Pancake can tweak the emission rate of new Cake if required!
Finally, in the grands scheme of the DEFI landscape, Cake is pretty well audited!
The case against buying cake
It is designed to be farmed and, well, sold off gradually for other coins - it's very easy to farm and swap, and you're almost encouraged to do this!
I'm not convinced by some of the tokens minted on Cake with very high returns - these kind of say 'bubble' to me - and when those bubbles POP, cake could come down with them.
There are so many alternatives - a lot of competition - Huobi Smart Chain is now up and running, for example.
I'm not sure of the ethics of 'making DEFI' fun, this is RISKY!
Final thoughts - cake, worth buying?
If I didn't already have any I'd pick up at least $100 worth of cake just so I could expose myself to the return rates - $100 would be my minimum as I don't think it's worth transferring around less than $100 on BSC.
And Pancake does seem to have a handle on how to make DEFI seem appealing - I can see a lot of new users getting into the Platform once we start to see Green again, and $5 million extra a day doesn't sound unfeasible.
However, I certainly wouldn't have >1% of my portfolio in cake though - it's nice to have some exposure to crazy DEFI coins as they could easily grow faster than the base coins staked on the Platform.
But there's just so much competition in DEFI land I wouldn't want too much of any one coin!
To find out more this article from Coin Bureau is pretty useful
Posted Using LeoFinance Beta
Yeah... I bought a bunch around $17. Almost at the top.
Posted Using LeoFinance Beta
CAKE inflation will most likely be reduced in the following month ....
Posted Using LeoFinance Beta
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