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Cake Pop or Cake Flop? IDO Aftermath

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Jerry The Farmer
@jerrythefarmer
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4 min read

It may be too early to judge if the CakePop IDO was a failure or a success but there are many reasons to take a deep dive into the numbers. Let's give it a shot and see what we may find.

Tokenomics

We discussed this topic so many times but failed to realize a big flaw in the distribution mechanism. It is actually only partly our fault because there was no documentation to look at and the CakePop team(?) was very stealthy about the launch. To identify the flaw we must go back to the beginning.

Timeline

In summary, 66.66% of all CakePop tokens in existence have been sitting in wallets owned by the CakePop developers, and as soon as IDO token distribution started those wallets were the first to collect $Cake dividends. 16% of the total number did go to the liquidity lock but dev-owned addresses still hold 50% of the supply. Was it by design or by mistake, maybe we will never know.

At the time of writing, 477.25 Cake tokens (~$10,687.91) have been distributed as dividend to CakePop holders. Roughly 230 out of 477 Cake tokens that were distributed ended up in the two addresses belonging to the developers, meaning that only a bit over 50% of distributed rewards actually ended up in the hands of IDO participants.

"Marketing"

I already mentioned in my previous article that CakePop has a very poor social media presence. Things didn't change drastically since then as the Community Telegram channel has only 11 members. The announcement channel supposedly has 900+ members but the most views announcements get are close to 30.

Almost 24 hours after the IDO ended on-chain data isn't very encouraging.

133 token holders and only 465 transfers even though the CakePop team boasted about reaching a global audience very soon after the IDO ended.

This gives our marketing a bit of time to kick in - Telegram announcements, AMAs, post publications and groups of freelancers who work to spread the message in various DMs and public crypto DeFi chat rooms.

What is described here is a very simple and hopefully coordinated spam strategy, at least for me. I'm not saying it won't work, I'm just saying that if it worked it would have given results by now.

Also, remember this?

They never announced a winner and I checked on both Twitter and Telegram.

Price Action and Dividends

Even though the presale price and the listing price were exactly the same the token took a hit seconds after getting listed on PancakeSwap. After a mild recovery phase, the volume started depleting and trading action slowed down gradually.

Claiming tokens on Cub Finance was also counted as a transfer so there was a tax included in that transaction. For example, if you had 100 CakePop tokens to claim, you would get 93 and the rest would be distributed as tax. This initial surge of people claiming their tokens and the initial selloff action generated over $7k in Cake dividends. And since the dev-owned addresses were the only ones holding CakePop tokens at that time, they got almost all of those dividends.

Communication/Info

Communication has evidently been terrible during the whole promotional period. Even after the platform launched there wasn't much to see on the website. No documents to go through, no detailed explanation on how the taxes will work and how the marketing funds will be used...

You can make a guess just by looking at the numbers on the website and that's all we got. I honestly expected more transparency and communication as soon as the IDO ends but nothing came of that.

Going Forward

Questions regarding the Cake distribution directly to dev-owned wallets have already been raised in the community Telegram channel but no clear answer has been given so far. I am personally leaving CakePop behind, taking this small loss as a reminder for future times, and wishing everyone a successful journey if it ever begins. From my own experience, projects that aim for great success have Telegram admins covering all time zones, are actively involved in community discussions on Discord and generally have a clear long-term plan ahead. This project has none of that.

I can only hope that they already foresaw that most of the Cake distribution will end up in project-owned wallets and have a plan to redistribute them to the community in the future. I also hope that their marketing strategy didn't already flop and that the whole community will benefit from this but I also encourage you to look at the facts and make a decision you will not regret.

Again, it is still too early to judge but I simply don't like what I see. The only important thing is that we are burning Cub and this one IDO was the biggest burning event in Cub history. That's some serious thinking material right there.

Posted Using LeoFinance Beta