Cake War Dark Tide Rising, a New Round of Decentralized Finance Protocol Battle Begins

In the BNB Chain ecosystem, a new type of DeFi protocol competition surrounding Cake is quietly unfolding. This competition, known as "Cake War," is expected to give rise to a DeFi giant with a market value of up to $1 billion. The participating projects have not only launched activities similar to coin deposit airdrops but also promised to distribute additional IDO shares, attracting the attention of a large number of investors.

Cake War Background Introduction

Cake has recently undergone a significant upgrade to its token economic model, shifting from the original syrup pool system to a veTokenomics mechanism similar to Curve. This change allows users to lock Cake to receive veCake, which can be used to enhance LP returns and participate in governance voting to determine incentive distribution. This model introduces a continuous bribery yield to the system and creates opportunities for projects similar to Convex to compete for veCake shares.

Another highlight of Cake is the launch of Cake V3, which is a concentrated liquidity pool similar to Uniswap V3 (CLAMM). Unlike other DEXs with veTokenomics + CLAMM, Cake V3 allows users to freely deploy positions and provides corresponding incentives based on the concentration of liquidity distribution. This design enables Cake to meet diverse liquidity needs, accommodating the trading models of Uniswap V2 and Curve V1.

Main Participants and Participation Methods

Currently, the main participants in Cake War include:

1. The sub-DAO Cakepie launched by Magpie
2. Equilibria team incubated Skillet Finance
3. The Stake DAO with the highest participation

It is worth noting that Butter Finance, previously launched by the Aura team, has announced its exit from the competition.

Cakepie and Skillet have launched a coin staking airdrop event similar to Blast, promising additional distribution of IDO shares. Magpie, leveraging the successful experience from Penpie, has raised over $6 million in Cake for Cakepie. However, investors should carefully assess the potential risks and returns before participating.

Yield Estimation and Risk Analysis

In past similar project wars, early participants often reaped considerable rewards. Taking Pendle War as an example, early participants achieved a total yield of up to 160% through coin staking activities. However, such projects also carry significant risks, primarily the possibility of token depegging.

For the revenue estimation of Cake War, you can refer to the following key factors:

1. Total Value Locked (TVL) of participants
2. Airdrop Allocation Ratio
3. IDO Allocation Shares and Initial Valuation
4. Expected Total Market Value
5. Possible losses or degree of token decoupling upon exit

Although it is currently impossible to accurately calculate the potential returns of Cake War, based on Pancake's TVL and token emission, it can be roughly estimated that its scale may be about three times that of Pendle War. This means that the total profits for early participants could exceed ten million dollars.

However, compared to Pendle War, Cake War has more uncertainties. Investors should closely monitor the specific terms provided by each participant and assess the performance of their past projects, especially in terms of token decoupling.

Conclusion

Cake War is expected to bring a TVL of up to $1 billion to the BNB Chain, with a market cap possibly reaching $100 million, akin to a Convex project, which will greatly invigorate the entire ecosystem. Early participants may reap substantial rewards in the short term, but they also need to be wary of risks such as token decoupling.

Considering that Cake's own business expansion capabilities may be limited, investors should pay more attention to the resource support that the Binance ecosystem may provide. As competition intensifies, various participants may introduce more attractive incentive measures, which is worth continuous attention.