In the cryptocurrency world, a token’s economic model often determines its value and long-term sustainability. As the core token in the PancakeSwap ecosystem, CAKE token has an exquisitely designed economic model and has multiple deflation mechanisms. This article will delve into the minting speed, distribution method and destruction mechanism of CAKE tokens to help investors better understand their potential value.
Mining speed of CAKE tokens
The minting speed of CAKE tokens is achieved through the block generation of the blockchain. With 40 CAKE minted per block, the daily minting volume of CAKE tokens is approximately 1,152,000. However, over time, the effective casting volume of CAKE can be affected by a variety of factors.
According to the data, the weekly burn volume is approximately 38.6373 CAKE, which means that the effective weekly minting volume is approximately 39,245 CAKE. It is worth noting that since August 11, 2022, the PancakeSwap team has implemented some configuration upgrades to use MasterChef v2 to uniformly manage the minting and destruction of CAKE. This change resulted in a decrease in CAKE's throughput.
How CAKE Tokens Are Distributed
How CAKE tokens are distributed is also worthy of attention. According to the data, among the minting volume of each block, the transaction category accounts for approximately 2.47%, the pledge category accounts for approximately 0.59%, and the other categories account for approximately 0.35%. This means that the distribution of CAKE tokens is relatively balanced, ensuring the interests of different user groups.
During the daily minting process, CAKE will also mint a dynamic number of CAKE at a rate of 9.09% and distribute it to team addresses. This part of CAKE will be put into the destruction address and will never enter circulation, thus further reducing the circulation in the market.
CAKE’s deflation mechanism
The deflation mechanism of the CAKE token is an important part of its economic model. In addition to regular weekly destruction, CAKE also achieves destruction through a variety of means, including but not limited to:
Exchange v3 0.001%~0.23% of transaction amount
0.0575% of Exchange v2 transaction amount
Stable currency exchange 0.004%~0.0016% of each transaction amount
100% CAKE from IFO super-raising fee
20% CAKE for lottery tickets
These destruction mechanisms not only increase the scarcity of CAKE, but also enhance its value stability. Especially in the NFT trading market, 2% of each transaction amount will be used to buy back and destroy CAKE, which further promotes the deflation of the token.
Reason for manual destruction
Why is the destruction process of CAKE done manually? Initially, PancakeSwap was launched as an MVP (minimum viable product). The MasterChef contract minted a constant 40 CAKE per block, so the early team did not add additional features to change the minting speed and logic of CAKE. By creating two dedicated pools to control CAKE production, the team was able to achieve manual destruction.
With the development of PancakeSwap, the team migrated to the new MasterChef v2 contract in April 2022, so that the destruction ratio of CAKE is controlled by a dedicated contract, ensuring the accuracy of the destruction amount. This change makes the total circulation of CAKE more transparent, and users can check the destruction status of CAKE at any time through the blockchain browser.
How to determine the total circulating supply of CAKE
To personally verify the total circulation of CAKE, users can follow the steps below:
Go to CAKE's token page on BscScan to see the amount of CAKE in the Burn address.
Look at the Total Supply and subtract the amount burned.
The final number is the total circulating supply of CAKE.
This transparent mechanism not only enhances user trust, but also provides investors with more reliable data support.
Summarize
The economic model of CAKE token is exquisitely designed. The casting speed, distribution method and multiple deflation mechanisms together constitute its unique value system. As PancakeSwap continues to develop, the market performance of the CAKE token is worthy of attention. For investors, understanding CAKE’s economic model will help make more informed investment decisions.
In the cryptocurrency market, CAKE token is undoubtedly a project worthy of attention, and the economic logic and deflationary mechanism behind it lay a solid foundation for its future development. I hope this article can help readers better understand the value and potential of CAKE tokens.