Why is the Cake APR going down?
For those of you new to Pancake Swap and staking Cake, you may notice that the rate continues to go down. For those of you who have been staking a long time, you probably remember the good old days where you could stake Cake on Bunny and get 300%. Now Bunny is in the toilet and Cake only pays 77%. Is it still worth it? I think so. You could take your money out of Cake and stake another coin on Pancake Swap but I have had problems doing this and making money. Its better to just stay put and suck it up when the rate gets lower.
How low can the rate go you may wonder? I have some theories on that. The vast majority of existing Cake is being staked or being used to provide liquidity. You can count the total amount staked in the two main pools which is about 137 million coins and there are about 20 million coins in the BNB/Cake Pool. That is almost all of the supply. What other coin has that much supply tied up into Defi contracts? None. Ethereum 2.0 can't touch it.
So the question is what is your alternative if you want a bigger yield. I have not found any Pancake Swap clone to be better. They often have liquidity problems. I am stuck right now with $50.00 worth of tDoge because I a not able to swap it anywhere. That was the result of a bad syrup pool or something. It is on my short list of money I lost that I might be able to get back.
So if Pancakeswap is yielding 20 Cake per block and the supply of Cake remains relatively constant, the yield will go down further and further until it makes more sense to stake your Cake in a different pool and convert back to Cake. There is a point where that will make sense on a bigger scale. I just suggest wasting some gas and trying everything out with small amounts first. I have had trouble with coins that I realized with only a few bucks.