Manual vs Auto staking for Cake on Pancakeswap
Auto Staking takes 2% of your profit on PancakeSwap. So instead of earning 100 Cake coins, you would earn 98. 2% does seem like much but it can add up. When you consider that you can manual stake and restake for less. The cutoff is $25.00. If you are able to harvest at least $25.00 each time you harvest, you can do manual cake. If you aren't able to get up to $25.00 in Cake coins, it is definitely better to do Auto Cake. Also if you are not able to access your crypto safely such as when you are out of town, you can put your money in Auto and not worry about it. If you live in China and you need to avoid your crypto for a few months or years, it would make sense to stake Auto Cake. If you are somewhere safe and you can harvest multiple times a day with more than $25.00 manual is a very good option. I make more doing manual but I will switch to Auto whenever I don't want to deal with crypto for 3 days.
Pancake Swap has two methods of staking Cake, the official Pancake Swap token. You can stake in the Auto Cake pool or you can stake in the manual Cake pool. For the Auto Cake pool you can leave your Cake and forget about it. The pool will compound your interest every few seconds. For manual Cake, you will need to manually compound your interest. This is typically a 50 cent transaction. As I have gotten more money in Cake, I have gotten to the point that it makes sense to do manual Cake. Auto Cake takes a 2 percent fee. With enough funds you can absorb the multiple compound fees to make up the 2 percent.
There are two kinds of people in this world. There are those who auto stake and there are those that manual stake. Which one are you?
The Auto stake pool on Pancakeswap appears to have more funds for the first time than the manual stake. They are both at about 65 million Cake coins. This has meaning to me. It is one thing to stake some Cake for a few hours or a few days. If you are going into auto cake, you are planning to hold for at least 3 days. If you plan to hold 3 days, then what is to stop you from holding longer.
In order to make more money from manual Cake, you need to compound 288 times per day. That is not realistic and if you aren't staking that much the fees will start to get you even if they are only 50 cents.
Although Auto Cake has a 2 percent performance fee and a penalty for removing funds I think it is still the best option out there in Defi.
If you leave your funds in Auto Cake for a year, you should have approximately 224% of the original amount. For example if you start with 100 Cake coins, you should end up with 224 Cake coins at the end of the year. It doesn't mean you made a profit. It is possible that Cake went down more than 50% even though you accumulated more coins.
It is also possible that the interest rate will drop but I have some thoughts on that too.
Right now there is about 180 million Cake coins and 130 million of them are staked in manual or autocake. The Cake/BNB pool has 700 million dollars in it. Assuming half of that is Cake. That is $350 million dollars of Cake. Take the price of Cake at $18 and that is another 20 million or so coins. We now have 150 million of the 180 million coins accounted for. That doesn't leave many floating around. If someone was to clean out Pancake Swaps 20 million coins and stake them it should reduce staking rewards by at most 20%.
If someone really did buy 20 million coins, Cake would go up so high that people wouldn't really care about the yield. The yield of Cake is protected by the scarcity of Cake. If you can't get Cake, you can't stake cake.
If Cake increases in price, the yield per coin in US dollars will also increase. Imagine that Cake goes to $100 and not much else changes. If you are used to yielding 5 coins a day at $20, then yielding 5 coins a day a $100 will turn your yield farm from a hobby into a sustainable business/investing strategy.
Long term strategy for Cake staking is to setup several wallets that do Decentralized Finance and that way you can unstake transfer some Cake to each wallet and then turn them off and put them away for a while. That would be if you did Auto Cake of course. When you do Autocake, you can just leave it alone in your hardware wallet. Our main two wallets for Pancake Swap are the SafePal S1 and the D'CENT.
In summary, here are the key differences between Auto Cake and Manual Cake
- You need to harvest or compound (reinvest) your CAKE by yourself. That means returning to the site, tapping buttons, and using a bit of BNB for transaction fees.
- Interest is displayed as APR, which doesn’t include compounding.
- Deposits SYRUP Token to your wallet upon staking
- Stake your CAKE and forget about it! The CAKE you stake in this Syrup Pool will be automatically compounded (reinvested) for you, minus a small fee.
- The “automatic” compounding function is triggered by other users who get a small bounty for triggering it.
- Interest is displayed as APY, which includes compounding.
- A small performance fee is subtracted from your earnings each time the pool is automatically compounded. See below.
- An unstaking fee applies when you unstake within 3 days of manually staking. See below.
- Does not deposit SYRUP to your wallet upon staking