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Last updated: Aug 16, 2023
Pancake Bunny is a yield farming aggregator and optimizer built on the BNB Smart Chain and recently launched on Polygon. The protocol enables farmers to optimize their returns and earn higher yields on their crypto investments through various yield farming strategies, which include auto-compounding features ensuring higher APY.
The Bunny Finance protocol has envisaged four ways of optimizing yield for its users which are Vaults, ZAP, Pot, and Prediction market.
Vaults are the Pancake Bunny farms, they allow users to deposit tokens into pools and earn interest. The reward earned is then auto-compounded and reinvested back into the pool to generate more yields, saving gas fees for every transaction. Pancake Bunny calculates the most optimal compounding frequency to optimize the yield. Currently, all the farms get compounded except for the BUNNY pool and the BUNNY/BNB pool.
Most of the Pancake Bunny farms are on PancakeSwap. Currently, Bunny has a total of 30 active pools with a mix of both single token and double token pools. Every Farm requires a different LP Token. 3% of the performance fee is automatically deducted from the Yield Farming APY. There is a 0.5% withdrawal fee from Farms, only if a withdrawal happens within three days from the day of deposit.
ZAP is a token conversion feature, allowing users to get the required LP token directly on Pancake Bunny without switching to another protocol. ZAP is based on PancakeSwap’s swap service, meaning that Pancake Bunny cannot control the slippage and impermanent loss associated with it.
Bunny Pot is a ‘jackpot’ pool. Users can stake their assets into the Bunny Pot during the Initial Staking Period lasting for 24 hours. As soon as this period ends, the Pot pool is closed and a farming period of six days begins. During this period, Bunny pot farms all the pooled assets and generates a pooled yield. When the farming period ends, the protocol randomly selects one winner, who receives the entire generated yield, while the remaining participants receive their initial stakes back. 90% of the generated yield goes to the winner and 10% to the Community Treasury to buy back Pancake Bunny’s native token BUNNY from the open market.
Bunny Prediction Market is the place where users can predict the price of BNB and earn rewards. If it is estimated that the BNB price will increase in the live round, the user can click ‘Up’ and if the BNB closed price turns out to be higher than the locked price at the end of the round, it’s a win. The same with the prediction of a lower price, if a user enters ‘Down’, and if the price is lower at the end of the live round, it’s a win.
In order to start using the Pancake Bunny app, it is first required to connect a wallet. Pancake Bunny supports wallets such as Metamask, TrustWallet, MathWallet, Binance Chain Wallet, and WalletConnect. It is also necessary to have a specific Farm’s underlying token.
To participate in farming, the user needs to select the pool from the list displayed on the front page of the Pancake Bunny app. If the user doesn’t have a proper token, the Zap feature can be used to trade one token for another. Then it is necessary to select the amount to be deposited and confirm the transaction.
In order to take part in the prediction market, it is necessary to navigate to the Prediction panel on the main page.
Users need to check the time before entering the prediction phase since one round lasts 30 minutes. Whenever the round is live, it is required to click Enter, which opens a window allowing predictions to be made. Then, the user may either choose ‘Up’ or ‘Down’, enter the bet amount, and click the ‘Confirm’ button. The minimum bet amount is 0.001 BNB. After 30 minutes, the results of the round are displayed. In case of a win, there is a ‘Claim’ button available to the lucky user.
BUNNY is the native governance token of Pancake Bunny. BUNNY token holders govern the protocol and receive the majority of farm fees.
Initially, BUNNY tokens didn’t have a maximum supply, they were minted in the amount of 40 BUNNY for every 1 BNB earned from performance fees. Users can earn BUNNY by using the farms or purchase them on ZAP. Users can also stake their BUNNY tokens into the BUNNY pool and BUNNY/BNB pool and earn more BUNNY tokens.
However, according to the last announcement on Medium, due to the major exploit, which happened in 2021, the team decided that the protocol will soon introduce a DAO. Once the DAO is launched, the vaults on Pancake Bunny will no longer mint BUNNY tokens. All of the team’s tokens will be locked in the smart contracts owned by the Bunny community and the total profit generated by this contract will move to the compensation pool. The information on updated tokenomics will be announced soon.
Pancake bunny runs a Bug Bounty Program through Immunefi.
The team behind Pancake Bunny is MOUND, which describes itself as an innovative financial technology company that develops blockchain-based financial platform services. The Pancake Bunny team is claimed to consist of developers and entrepreneurs with extensive experience across games, social platforms, quantitative financial services, and blockchain projects. The team members however remain anonymous.
On May 19, 2021, the protocol was exploited to mint around 7 million BUNNY tokens from its vaults, which resulted in a $45M financial loss.
According to the Pancake Bunny team, the attacker used PancakeSwap to take a flash loan borrowing a large amount of BNB tokens. Then the attacker manipulated the prices of USDT/BNB and BUNNY/BNB in order to obtain a huge amount of Bunny through flash loans, which were then dumped into the market crashing BUNNY by over 99%.
According to blockchain security and data analytics company Peckshield, this attack has been made possible due to a bug in the protocol that uses the AMM-based oracle, i.e., PancakeSwap, to measure the price of specific PancakeSwap LPs (BNB-BUSDT/BNB-BUNNY).
Pancake Bunny has achieved a partnership with Trefethen Family Vineyards, to create a “real-world” NFT collection of their award-winning Cabernet Sauvignon that is designed to operate as tradeable investments in fine wine. Bunny has also partnered with Cantata, which will allow the creation, collection, and trading of NFTs within the Bunny ecosystem.
It is planned to introduce new Venus single asset vaults (SAVs) on the Pancake Bunny protocol, introduce a DAO, revise the Pancake Bunny fee structure, and integrate the protocol on other chains.
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