Draft VIP 33: Support Pancakeswap (CAKE) on the Venus Protocol.

We are proposing to support CAKE in Venus Protocol Markets.
As per our risk assessment (https://blog.venus.io/venus-risk-assessment-framework-42dce1e3ca27), we are proposing the following metrics:
Collateral factor: 55%
Reserve factor: 25%
Daily XVS (supply): 25 XVS
Daily XVS (borrow): 25 XVS
Supply limit: No limit
Borrow limit: 500K
Interest Rate Model: Jump Rate Model

What Is Pancakeswap
PancakeSwap is #1 automated market maker (AMM) in Binance Smart Chain — a decentralized finance (DeFi) application that allows users to exchange tokens, providing liquidity via farming and earning fees in return.
It launched in September 2020 and is a decentralized exchange for swapping BEP20 tokens on Binance Smart Chain. PancakeSwap uses an automated market maker model where users trade against a liquidity pool. These pools are filled by users who deposit their funds into the pool and receive liquidity provider (LP) tokens in return. PancakeSwap allows users to trade BEP20 tokens, provide liquidity to the exchange and earn fees, stake LP tokens to earn CAKE, stake CAKE to earn more CAKE and stake CAKE to earn tokens of other projects.


Why a borrow limit of 500K (only $7 million) and No supply limit ( potential $2.5 billion worth of CAKE)…? This is quite risky. A supply limit proportional to borrow limit should be set.


This can easily be adjusted at a later time.

Any document that I can find about the Jump Rate Model? Why BNB rate is capped at ~13% but BUSD can be up to 20+%?

why adjust later when it can be done at 1st go…

Hi Danny,

These stats feel back to front. By setting such a tiny borrow limit you prevent suppliers from achieving the full interest potential that the kick model provides. There is no doubt that CAKE will be a popular borrow token, so if the APY is not tempting enough then people might not supply and this will flop.

We should consider setting an overall supply cap (if possible) to limit overall exposure to the protocol, rather than a borrow cap - we want the users to be able to make use of the assets supplied as if they are not in use then they are not earning yield (borrowers pay suppliers). Market cap of CAKE is sufficiently large that a borrow limit is not a concern imho. Although it has ranged between $10 & 40 since the bull run, the movements are sufficiently steady due to amazing liquidity on both CEX and Binance to allow borrowers time to manage their positions.

My 2cs anyway

Rates model should be an important thing for CAKE here. As in PanCakeSwap we have Syrup Pool autocake with ~100% APY, if CAKE borrow rate is capped like what happened to BNB (~12%) during the Binance Coin98 launch pad period, the CAKE reserve will easily dry up.