With $CAKE now accepted in PancakeSwap launchpads under the new tokenomics model, a surge in borrowing demand is expected on Venus Core Pool. To capitalize on this and accommodate user needs—similar to what was seen during the $SOLV IFO—it’s proposed to increase the $CAKE borrow cap in advance, ensuring Venus is ready and positioned to maximize revenue.
Background
The Binance Web3 Wallet has seen a surge in user traffic recently, thanks to a series of high-engagement campaigns and earning opportunities. One of the standout events driving this momentum is the Binance Web3 x PancakeSwap TGE Launchpads. Over the past two months alone, PancakeSwap has hosted 10 launchpads, all of which have allowed users to participate using only $BNB—until now.
With the recently approved $CAKE 3.0 tokenomics model, Starting from the next launchpad, $CAKE will also be accepted as a subscription asset for these overflow launchpads. This will result in a spike to the borrowing demand for $CAKE on Venus Core Pool, as users seek to maximize their allocation in upcoming presales, we have seen this kind users behaviour during the IFO of $Solv protocol on PCS.
Proposed action
Increase the borrow cap for $CAKE in advance to meet user demand and ensure Venus is well-prepared for the next launchpad—maximizing revenue opportunities.
Chaos Labs supports a proactive increase in the CAKE borrow cap on the Venus Core Pool, anticipating heightened demand driven by PancakeSwap’s newly launched Launchpad.
Motivation
The introduction of CAKE as an eligible asset for participation in PancakeSwap’s Launchpads under the CAKE 3.0 tokenomics model is expected to drive significant CAKE borrow demand.
Historically, launchpad events on Binance Web3 Wallet allowed only BNB deposits, but CAKE has been recently added to the list of supported assets and is expected to be available during the next subscription event.
As the original posts suggest, we can look at historical Pancakeswap IFOs and Binance Wallet Launchpads to gauge possible subscription interest. Following those, the CAKE deposited during past launches reached $24M, and BNB reached up to $35M.
Given that only 46% of the current supply cap of CAKE is utilized, we do not recommend increasing it. However, we recommend setting the borrow cap at 80% of the current supply cap or 19,200,000 CAKE.
We note that while an adjustment in the asset’s interest rate curve may be necessary to optimize the pool’s utilization, we recommend maintaining the interest rate curve purposely aggressive to safely assess an optimal range following the first Launchpad. This is particularly relevant for CAKE, whose interest rate curve necessitates a more aggressive implementation given its greater volatility and therefore weaker risk profile in the context of Venus.
Specification
Asset
Market
Current Borrow Cap
Recommended Borrow Cap
CAKE
BNB Core
3,749,000
19,200,000
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this recommendation.
