Meme Cake’s Tokenomics
What is Meme Cake?
Meme Cake is a decentralized platform for creating, sharing and trading of digital content with proof of ownership. In short, Meme Cake is the first social NFT multi-chain marketplace.
What is $MCAKE?
$MCAKE is the native token of Meme Cake. It enables a broad set of interactions between the community and the platform. $MCAKE is driven by multiple utilities and will be distributed to those who bring the most value to Meme Cake. With a capped supply of tokens, we ensure that utility is captured in $MCAKE and not diluted.
What can $MCAKE be used for?
- benefits: help to curate the platform and receive early access to new projects
- governance rights: vote on the future of the platform
- medium of exchange: pay on Meme Cake and other Solana-based platforms
- staking: earn rewards by locking your $MCAKE
- discounts: pay lower fees for listings and transactions
What is the supply of $MCAKE?
Total supply of $MCAKE is capped at 10 billion tokens. These tokens will gradually be distributed, and the circulating supply will hence increase over time based on the economic activity of the platform. Distribution of new tokens will be terminated once the cap of 10 billion tokens is reached.
How is the supply of $MCAKE distributed?
Meme Cake is community-driven, so most of the $MCAKE will directly be distributed to those who contribute to the system. In the beginning, Meme Cake will subsidize community members that contribute to the ecosystem with its own native token. To ensure the wealth of community members also in the long run, Meme Cake adds a fee switch, which allows it to collect trading fees at a later stage of the project.
The $MCAKE distribution in detail
Trading rewards and airdrops – 2’500’000’000 $MCAKE (25%)
The lion’s share of $MCAKE will go to the community that make-up the Meme Cake ecosystem. Airdrops released a first share of tokens to the community which can use $MCAKE for the purposes described above. Further tokens will be distributed to the community as rewards for trading. How these rewards are calculated is explained below.
Staking – 1’000’000’000 $MCAKE (10%)
Token holders can stake their $MCAKE to earn rewards. These rewards come from newly distributed MCAKE in the beginning. Rewards per staked $MCAKE will be high in the beginning to reward early adopters and then gradually decrease over time. How these rewards are calculated is explained below. At a later stage, these rewards can be subsidized using the fee switch.
Community reserve – 1’500’000’000 $MCAKE (15%)
15% of the total supply will be added to the community reserve. These tokens will also serve the benefit of the community. In particular, it is a reserve if more trading rewards or staking rewards are required or if other community incentives are employed over time.
Treasury – 1’250’000’000 $MCAKE (12.5%)
Tokens in the treasury are used to further develop the Meme Cake platform. The treasury is used to fund ongoing expenses, whereby this distribution is limited to 0.1% of the total supply per month. In addition, it serves as a backup for growth inducing measures such as more partnerships or further funding. For those expenditures, governance decisions are made by the community holding $MCAKE.
Partnerships / Liquidity management – 1’250’000’000 $MCAKE (12.5%)
The project needs to form partnerships to boost the attractiveness of the Meme Cake ecosystem and ensure liquidity on markets. Therefore, a substantial number of tokens is attributed for partners and liquidity provision.
Fundraising – 1’500’000’000 $MCAKE (15%)
Meme Cake is collecting funds to finance the development of the platform. Public and private investors can invest into the project and receive $MCAKE. Private investors receive the tokens they are eligible to through their investment amount over time: 10% initially and the remaining into daily splits over the period of one year.
If, for example, a private investor buys 1’000 $MCAKE, then 100 $MCAKE will be unlocked immediately. Afterward, every day 2.47 $MCAKE (900/365) of his investment will be unlocked. After a year the investor can access all tokens.
Team – 1’000’000’000 $MCAKE (10%)
A share of the total supply is dedicated to the team who built the Meme Cake platform. These tokens will be locked in the first year and then gradually distributed over four years to the team members. A projection of this vesting is given in the emission plan below. Team tokens are locked for a period of 12 months and are then unlocked over a vesting period of four years. This vesting is done on a daily basis.
The $MCAKE’s emission plan
Circulating supply is increasing overtime as shown in the 5-year projection below.
- At the early stage of Meme Cake, public investors and the community hold the largest share of circulating tokens.
- Marketing spending will be high initially to help growing the network.
- With more people joining Meme Cake, the share of $MCAKE held by the community increases
- Treasury tokens will be distributed in lower proportion as they serve the long-term development of Meme Cake.
- The team’s tokens will be gradually distributed starting 12 months after the initial offering and lasting over a period of four years.
How are trading rewards calculated?
In the first five years of the program, Meme Cake incentivizes trading with $MCAKE. These
rewards are financed by new token emissions. After this promotion period, Meme Cake might
collect trading fees that can be used to reward stakers.
The quarterly pools of trading rewards and the resulting daily pools of trading rewards for the first five years is presented in the table below.
From the daily trading reward pool, rewards paid to individual traders on a given day are
calculated as follows:
To ensure token emissions are aligned with economic activity, trading reward pools are adjusted if the trading volume is significantly below the business projections. This adjustment will be done by using the following formula of the trading reward rate
Therefore, if trading is substantially below business projections, the daily pool of trading rewards is adjusted in order to fulfill the formula above.
How are trading rewards calculated?
Staking rewards are paid to stakers on a daily basis. These rewards are calculated by dividing quarterly staking pools of $MCAKE into daily payouts proportional to the volume staked. To ensure token emission is aligned with economic activity, the staking pool is defined as a share of the reward pool. Thus, we project quarterly pools to decrease in size over the first five years.
In the beginning, Meme Cake will finance rewards by new token emissions. After the
fiveyear-period, Meme Cake might finance staking rewards by collecting fees on trading
activities on the platform.
The projected quarterly pools of staking reward and the resulting daily pools of staking rewards for the first five years is presented in the table below.
The daily pools of staking rewards are set based on business projections on trading volume. The original trading reward budget is 2 times the staking reward budget. I.e.,
Therefore, as explained for trading rewards before, token pools for staking rewards will remain
proportional to those for trading rewards (factor 2). If the trading reward pool is adjusted
because of low trading volume in a given period, the staking reward pool will be adjusted
From the daily staking reward pools, rewards paid to individual stakers are calculated as follows: