PancakeBunny Re-Applies Token Burn and Subsidizes Yield Farming Incentives

With the volatility in price BUNNY has endured, PancakeBunny is making the decision to re-apply an effective token burn.

PancakeBunny Make Calculated Move

The PancakeBunny team will purchase the native token $BUNNY on the open market and claim transactions as a part of the usual Floating Rate Emission practice. 

Pancake Bunny confirmed via Medium on Aug. 26 that they will look to combat the volatile price swings by reducing the amount of BUNNY minted.

“It remains the goal of Team Bunny to return to the original tokenomics of the Bunny Distribution-as-community Profit Share as soon as possible,” the Medium states.

When this price share is possible is another matter. The PancakeBunny team has been very busy lately following their exploit earlier this year, even launching a new platform called Qubit. PancakeBunny is clearly attempting to influence matters through its own decisions. 


How Will it Work?

The PancakeBunny team will incorporate the usual Bunny Distribution to purchase BUNNY from the open market as part of the Floating Rate Emission practice. By doing so, the team hopes to achieve the following:

Evident buy pressure will be exerted upon the BUNNY price

There will be a reduction in the amount of BUNNY minted due to the usual minting process being replaced by open market purchases.


What Are Usual ‘Floating Rate Emissions’?

Floating Rate Emissions (FRE) is described by Pancake Bunny as being a mechanism that aids in generating meaningful rewards while aiming to affect an improvement in token dynamics. 

The initial FRE was 36% – 30% Performance Fee, alongside a 6% BUNNY minting. 

The idea is that when the price of BUNNY falls below 1/15 BNB, the system will begin the following process to protect assets.

30% Performance Fee to purchase BUNNY at market price

Amount of BUNNY equal to 6% of the Claim is minted and sent to the relevant user

When the BUNNY/BNB Ratio is above the aforementioned threshold, claims will go on as initially designated, with the usual Performance Fee going instead to the Bunny Pool and newly minted BUNNY delivered to the user.

Will there be Rewards?

The system in itself is a clever way of attempting to exert control over a fluctuating market. Still, many will pose the simple question of how promised rewards will be generated and taken.

“In the meantime, until such a time that Team Bunny can re-institute the direct Community Profit Share mechanism through the Bunny Pools, we will implement Bunny Pool rewards sufficient to maintain average APYs of over 120% for the BUNNY-BNB pool and over 50% for the Bunny Maximizer Pool,” the team explains via Medium. 

This will no doubt incentivize yield farming, but this implementation isn’t entirely accounted for in the sense of how that initial capital will be generated, especially if volatility in price is consistent. 

We’re keeping a close eye on how this particular initiative develops and whether PancakeBunny can effectively combat future token price volatility. 

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