Bunny Reward Pool Updates, Profit Sharing, & Next Steps
TL;DR:
The Bunny Reward Pool operated to distribute a share of profits to the Community.
Since the attack, ~$50 Million in pre-exploit profit will have been shared over the 90 days ending on August 19 (UTC). At that time, the Bunny (for BNB) Pool will be discontinued, and profit derived from the Bunny Distribution will be shared with the Community through the Bunny Maximizer Pool. In order to earn their share of the Bunny Distribution profit, community members will need to withdraw their BUNNY from the discontinued Bunny Reward Pool, and stake their BUNNY in the Bunny Maximizer Pool.
Hey Bunny Fam!
Thank you for sticking with us throughout the market downturn and the challenging process of building new value into the PancakeBunny Ecosystem! Please read on below for the latest details regarding the discontinuation of the Bunny Pool and the update of the Bunny Maximizer, as well as a refresher on the Bunny Distribution and tokenomics of BUNNY.
1. August 19 Discontinuation of the Bunny (for WBNB) Pool
As originally announced in May in our Go Forward Plan article (link), the Bunny (for WBNB) Pool will run out of WBNB to distribute on August 19th (UTC), as the legacy WBNB that was locked in the contract at the time of the exploit will have been completely claimed by users over the previous 90 days.
2. By August 19, the Bunny Pool will have shared over $50M in Bunny Distribution that remained from the profit share accumulated prior to the exploit.
At the time of the exploit, approximately $50M in accumulated performance fees — i.e. the Bunny Distribution — was locked in the original Bunny Pool contract and could only be claimed over the next 90 days.
How did the Bunny Distribution/Bunny Pool mechanism work? Prior to the exploit, suppose you earned 10 BNB of farming profit. At the time of claiming, you would have received 70% of your return — or 7 BNB in value — as BNB, and 30% of your return — or 3 BNB in value — in the form of newly minted BUNNY.
The 3 BNB that was exchanged for BUNNY in this claiming transaction is called the Bunny Distribution, and before the exploit, all of the Bunny Distribution was sent to the Bunny Pool to be claimed over ~3 months (i.e. 90 days).
Making 1/90 of the daily Bunny Distribution claimable for the subsequent 90 days was important and necessary to smooth the volatility of the Community profit sharing mechanism of the Bunny Pool, which is one of the features that makes PancakeBunny so innovative.
3. Post-attack operation of the Bunny Distribution
After the attack, the Bunny Distribution no longer contributed to the Bunny Pool for two reasons. First, the ~$50M that was already locked in the Pool was sufficient to provide stakers with an APY of ~300% throughout the 90 days that the Pool would be in operation.
Second, the Bunny Distribution was necessary to fund the pBUNNY Compensation Pool. Thanks to the Bunny Distribution, original BUNNY holders were able to claim over $18M in compensation through the operation of the Compensation Pool.
However, while the initial post-attack operation of the Bunny Distribution made important contributions to compensate original holders of BUNNY, the price of BUNNY came to be under excessive pressure as the bear market became more intensely negative.
As a consequence, whenever there was a claiming transaction, it became necessary to use the Bunny Distribution to purchase (directly on the open market) the BUNNY rewards that were being claimed (instead of minting new BUNNY) in order to support the BUNNY price.
The addition of this market-buy mechanism to the claiming process, by creating buy pressure for BUNNY and vastly reducing the amount of newly minted BUNNY, proved effective in stabilizing the BUNNY price. However, it also meant that the Bunny Distribution could no longer contribute to the Compensation Pool and necessitated a massive contribution to the Mound Vault by the Team to convert original holders of pBUNNY into MND so that they could continue to receive compensation.
4. The Bunny Maximizer Update and the operation of the Bunny Distribution after August 19
As of August 19, the Bunny Distribution will once again be used to fund to the Community profit-sharing mechanism, but this time it will be through the Bunny Maximizer Pool (which returns auto-compounded profits in the form of BUNNY) and not a new Bunny for WBNB Pool. There are two aspects to this decision.
1) Artificially tying the Bunny Distribution profit-sharing mechanism to the price of (W)BNB through the operation of the original Bunny Pool greatly limited the options available to the Team to support the price of BUNNY and to conceive of more sophisticated farming mechanics for future Bunny Pools.
2) By applying the Bunny Distribution to buy BUNNY on the open market, the Bunny Maximizer Pool will exert a steady buy pressure in the market that will support and exert upward pressure on the BUNNY price.
3) The Bunny Maximizer Pool returns BUNNY, and will be upgraded to be able to boost regular Maximizer returns with bonus BUNNY as the Bunny Distribution stacks from day to day to build a high APY over the course of the next few months.
5. Stacking the Bunny Distribution to reboot APY
Because Bunny Pools are designed to minimize volatility and to build towards a steady APY, the Bunny Distribution that is paid into the Bunny Pool on any given day will be distributed by the Pool over a number of subsequent consecutive days. (For the new updated Bunny Maximizer Pool, the Bunny Distribution will be farmed over 30 days as opposed to 90 days for the discontinued BUNNY for WBNB Pool.)
For example, suppose this is Day 1 of the new Bunny Pool, and the Bunny Distribution paid into the Pool that day is $30. Then stakers to the Pool would be able to claim $1 per day of the Day 1 Distribution for each of the next 30 days.
Now suppose it is Day 2 of the rebooted Bunny Pool, and the Bunny Distribution paid into the Pool is again $30 (for the rest of the examples, let us assume that the daily Bunny Distribution is a constant $10). Then the Pool would hold a total of ($30-$1) + $30 = $59 of Bunny Distribution from Days 1 and 2 (because $1 had been claimed for Day 1). And now Day 2 users can claim a total of $2 = $1 from Day 1 plus $1 from Day 2. So you can see that the total amount of accrued Bunny Distribution stacks for Days 1 and 2 (i.e. $29 + $30 on Day 2), as does the claimed amount (i.e. $2 on Day 2).
What happens on Day 3? Well, a total of $28 + $29 + $30 = $87 of net Bunny Distribution will have been paid into/remain in the Pool, and $3 = $1 + $1 + $1 of Bunny Distribution is claimed on Day 3. And so on for the first 30 days of operation.
Finally, in this example, from Day 30 onwards, a full $30 will have stacked to be claimed that day, equivalent to a full day’s worth of Bunny Distribution.
6. BUNNY Boost to support the ramp up period
The upgraded Bunny Maximizer Pool which used to farm the Bunny for WBNB Pool will now farm and auto-compound the Bunny Distribution directly. But as you can see from the example above, there will be a ramp up period of at least 30 days before a full day’s Bunny Distribution will be claimed each day.
Consequently, Team Bunny will be boosting Bunny Maximizer rewards for the first few months after the Pool is rebooted on August 19. Stay tuned for more details regarding the upcoming Maximizer Boost coming soon!
7. Migration & Logistics
On August 19th UTC 0611, the Bunny Reward Pool will cease distribution of rewards, and its APY will appear as zero. At this point, in order to earn your share of the Bunny Distribution, you will have to withdraw your BUNNY, then go to the Bunny Maximizer pool and manually deposit your BUNNY into that pool after the specified time. If you already have BUNNY in the Bunny Maximizer pool, there are no further actions necessary.
8. Concluding Remarks
Thank you, Bunny Fam, for your steady patience and support as we build the recovery of PancakeBunny step-by-step. For those of you with us from the beginning, you will recall how complicated and time-sensitive the immediate aftermath of the attack was for the project. Thankfully, through the steadfast engagement of the Community and the unyielding focus on product and user experience of Team Bunny, we have been able, in a little over two months, to stabilize the Ecosystem and increase our security — all while adding Bunny Pots, the Polygon fork, the Mound (MND) Vault, and QBT liquidity (with the Qubit project to launch soon). As we have been throughout this entire process, Team Bunny is committed to communicating with you, the Community, as transparently as possible. Please keep in mind that we will continue to adjust the tokenomics and the mechanics of PancakeBunny and the wider Ecosystem to boost the performance of all of our various products and maximize BUNNY value. Stay tuned for more exciting details about the BUNNY Boost for the Maximizer reboot, the launch of Prediction Markets, and the BSC Multiplexer. And of course, please keep an eye out for the Qubit launch — with the recent completion of Peckshield’s comprehensive audit, we hope to be able to announce an early launch date soon!
So remember, Bunny Fam, as always — Keep Calm and HOP ON!
About MOUND
MOUND is the innovative team behind Pancake Bunny, one of the leading DeFi platforms on BSC. Team MOUND is composed of developers and entrepreneurs with extensive experience across games, social platforms, quantitative financial services, and blockchain projects.
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