BUSD may no longer support redeeming to USD after February 2024.
PancakeSwap has migrated most of the CAKE reward emissions from V2 to V3
AF2.0 is officially launched and AVv3 will be launched soon, resulting in less usage on AF1.0
ALPACA has 90% of the on-chain liquidity on PCS ALPACA-BUSDv2, and 93% of that are from AF1.0
ALPACA is officially deflationary
With the launch of AF2.0 and Alperp, we have used most of the available ALPACA. At present, we have 175K ALPACA from the remaining February emission, 148K ALPACA in liquidation treasury, and 354k ALPACA from early withdrawal fee, which make a total of 677K ALPACA available, as well as $42.8K worth of assets in liquidation treasury.
In AIP15.3 and AIP15.4, around 850K to 900K ALPACA ($225K - $250K) are needed for each new product launch. That is to say, there is only enough incentive for one more new product as for the current amount available, and we are still taking out more ALPACA from liquidation treasury for weekly burn.
Given the reduction of CAKE emission for the ALPACA-BUSD pair continues, the APY of ALPACA-BUSD has not been able to cover the borrowing interest of BUSD for a long time. Though the borrowing interest of ALPACA is lower, only 26.7% of positions are opened borrowing ALPACA on AF1.0. The liquidity of ALPACA-BUSD PCSv2 will decline as the adoption of AF2.0 increases in the near future, and worst case, the on-chain liquidity could decrease by 90% when people can’t redeem BUSD to USD, which will eventually lead to invalid buyback.
We’ve spent $15.71M for the weekly buyback and burn according to Proof of Burn; however, the market cap to date is only around 23M. It’s obvious that the token price hasn’t been supported by burning. Instead, if we keep the fund, we will have the ability to provide basic liquidity for new products, even without further incentives.
Considering the current ALPACA emission schedule has ended and therefore ALPACA is officially deflationary unless new tokens are minted from warchest, it’s very unlikely for the ALPACA holding of token holders to be diluted.
Instead of burning, I propose that we use our weekly revenue to establish liquidity on PCSv3. This contributes to ALPACA’s on-chain liquidity and in the meantime it can also act as a treasury for future needs. When we need incentives to launch a new product or to go cross-chain, we can remove a part of the liquidity provided by narrowing the LP range on PCSv3; of course, it’d be through Governance Vote. By implementing this, there wouldn’t be severe reduction of liquidity at once, and the trading fee revenue can be distributed to Governance Vault.
I’d love to invite the herd and the team to have more discussion and I’m open to any suggestions.
因為PCSv2持續減少 ALPACA-BUSD 的CAKE獎勵釋放，ALPACA-BUSD的APY長期都無法覆蓋BUSD的借貸利息，雖然借ALPACA利息比較低，但是借ALPACA的倉位只佔AF1.0的26.7%左右。隨著未來AF2.0使用率的增加，ALPACA-BUSD PCSv2 的流動性會逐漸減少；並且在BUSD停止兌換USD的時候，最壞情況是鏈上流動性會減少90%，這將會導致無法有效的進行回購。
93% of the liquidity are from AF1.0
$1.46M ALPACA-BUSD in PancakeSwap
$1.36M ALPACA-BUSD from AF1.0
26.7% of ALPACA-BUSD positions are opened borrowing ALPACA on AF1.0
$364K ALPACA-BUSD(Borrow ALPACA)
$998K ALPACA-BUSD(Borrow BUSD)
90% of liquidity on ALPACA-BUSD PCSv2