[CIP #16] - Defining $1.5M Release Payment and proposing that Magpie donate 50% of its Release Payment

Cakepie 3. Cakepie Improvement Proposals
1

Abstract

This proposal sets out how $1.5M Release Payment in stablecoins provided by PancakeSwap will be distributed, and suggests that Magpie DAO treasury waive 50% of its entitlement to the Release Payment to be distributed to vlCKP holders. The proposal seeks DAO consensus aiming to present a fair, smooth and secure allocation that ensures the best interests of all users.

Motivation

PancakeSwap has retired veCAKE and the entire voting incentive market with tokenomics 3.0. Due to this unforeseeable decision which was entirely out of our control, this meant the loss of Cakepie’s core mechanism and the central voting power of vlCKP.

To acknowledge the efforts of Magpie, PancakeSwap will provide $1.5 million in stablecoins to all affected vlCKP/CKP holders, which includes users and the Magpie DAO treasury. The Cakepie Treasury currently holds 74 BNB and 52,456 CAKE, which we will include as supplemental goodwill payments on top of the amounts from PancakeSwap. It will be sold for stablecoins before we distribute.

Given Magpie’s early role in launching Cakepie, it holds over 937,500 vlCKP/CKP and is therefore entitled to a meaningful portion of this Release Payment.

Since the Magpie ecosystem is user-centric, in light of these challenging times, we are proposing that Magpie DAO treasury waive 50% of the Release Payment it is entitled to in favour of vlCKP/CKP holders. And we need to define mechanisms to ensure a fair, smooth and secure distribution.

Proposal Details

Amount to be distributed: $1.5 Million in stablescoin + 74BNB and 52,456 CAKE(from Cakepie Treasury).

Transparency and Security Mechanism to access the Release Payment: To prevent double participation CKP holders must deliver their CKP tokens to a special Release Payment smart contract, which would algorithmically (a) allocate the Release Payment pro-rata to all CKP tokens in the smart contract and (b) burn all the CKP tokens in the smart contract.

Lock-up: As prescribed by PancakeSwap, the Release Payment will be unlocked on a monthly basis over six months.

Locked CKP: The vlCKP lock-up period will be eliminated to allow instant unlocks.

Distribution Mechanism:

The general Release Payment will be distributed in proportion to the amount of CKP delivered to the Release Payment smart contract.

The additional Release Payment from the Magpie DAO treasury’s goodwill donation (50% of its own Release Payment) will be distributed according to a weighted formula:

  • user’s weight = CKP or vlCKP amount Ă— min(CKP or vlCKP amount / mCAKE amount, 0.5).

mCAKE used in mCAKE SV, CAKE staking and mCAKE-CAKE LP pools are included in this account.

Examples:

  • user A had 1000 vlCKP and 10000 mCAKE. Therefore 1000/10000 = 0.1. Since 0.1 is less than 0.5, then the user’s weight will be 1000*0.1=100

  • User B had 4000 vlCKP and 10000 mCAKE. Therefore, 4000/10000 = 0.4. Since 0.4 is less than 0.5, then the user’s weight will be 4000*0.4=1600

  • User C had 7000 vlCKP and 10000 mCAKE. Therefore, 7000/10000 = 0.7. Since 0.7 is greater than 0.5, then the multiplier will be limited to 0.5 with the user’s weight being 7000*0.5=3500.

In other words, in the distribution of rewards, each user will receive in proportion to their weight. So user C will earn 35 times more than user A.

This additional Release Payment will be distributed according to the user’s weight. The main objective is to ensure a weight in the distribution so that the most affected users receive priority. It also guarantees the rights of small token holders. We present a distribution formula that tries to balance this.

A snapshot was taken of all vlCKP/CKP holders on the date of the tokenomics 3.0 proposal launch. Only vlCKP/CKP holders on that snapshot date will have access to additional Release Payment.

Note:

  • Only CKP holders who send their tokens to the Release Payment smart contract to claim the initial Release Payment will be eligible for the Magpie DAO treasury donation.
  • The Magpie DAO treasury’s donated portion of the Release Payment will be distributed once Magpie DAO has received its full Release Payment at the end of six months.

Specification

Distribute PCS’s $1.5M Release Payment plus Cakepie’s treasury 74 BNB and 52,456 CAKE to vlCKP/CKP holders and propose Magpie waives 50% of its own Release Payment, to share using a weighted formula based on CKP-to-mCAKE ratios.

1 Like
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Pancakeswap team emphasized that compensation is only for RETAIL user that is not under control of team. But you included MagPie treasury to the compensation. Why Magpie treasury take part from 1.5m$. It is not paid. We,real user, paid usd/bnb to buy CKP Token, but magpie treasury didnt paid anything.

3

The Release Payment is for all CKP/vlCKP holders. Magpie is a CKP/vlCKP holder.

Cakepie operated with all revenues going to users through CKP holdings. There were never any fees going to the treasury or team. Magpie invested in Cakepie, including using MGP tokens to power Cakepie. In addition to all operational costs, human resources, to build the protocol. The only form of funding was the CKPs destined for Magpie’s treasury when Cakepie launched.

So it is only fair that Magpie accesses its share of the compensation distribution as a CKP holder. And it is proposing to donate 50% of this compensation to vlCKP holders.

4

What is the minimum compensation for 1.000 CKP in usd with 0mcake ? (Assuming all circulating submits their tokens)

what if %50 participate ?( assuming some forgets etc )

It would be better if you give better scenarios.

5

The size of the general compensation will depend on how many CKPs will be burned. And the additional offset from the snapshot data.