Tokenomics Model Series… Ep. 1 ?!

First all, thanks for participating in our presale. Appreciate all the support!

We’ve briefly explained our tokenomics in this blog. Now, let’s start a series detailing the logic, rationale, and analysis we put behind our tokenomics model. To preface this, we’re about to embark in a series of econometrics, math, computer science, and computational analysis! It’ll be a fun ride.

Now, we’re going to explain our base model assuming the crypto world is static, which we all know that isn’t true. However, this is a base model so we’re treating all this to prove a point about our tokenomics. In our previous article, we mentioned that “….In short, excluding circumstances we can’t control: 1) HODLers, 2) Dumpers, 3) FOMOers, 4) Panic Sellers, 5) Low-Liquidity, 6) Low-Volume, 7) Future Governance…..”. These listed factors are something we can’t control and can drastically affect the volatility of the CAFE token.

In this series, we will be creating a model/algorithm for most of the circumstances listed above; With that, we’ll add them as regression variables, which means we’re adding “independent” variables to our equation such as, for example, how FOMO affects CAFE’s base model projection for token value. Please stay tuned.

Let’s start with our initial model:

Assumptions:

1. Our presale generated roughly 167 BNB, which means we will generate 41,750 CAFE for our presalers! Congratulations. We also have 70,000 Tokens allocated to our core team and event participants (let’s call them airdroppers).
2. Now, let’s assume that all of our presalers and airdroppers stake their tokens at launch. That’s 41,750 + 70,000 = 111,750 staked.
3. Assuming we have around 200 members staking the 111,750 CAFEs. If we take the average, that’s 558.75 CAFE staked per member!
4. Let’s assume that no one is buying CAFE within 7 days of launch , and no one is selling because everyone is staking.
5. Let’s say we start with 20 pools that reward CAFE equally and well-distributed.
6. Give our first 7 days of distribution:

6. 7.01408733 CAFE / block @ 1 block/second; First golden ratio halving at block 28,800; At the end of first week, we’ll do 4.33494437 CAFE / block. At the end of the first week, 201,600 will be rewarded. 10% of that will go to fund allocation (detailed here). That means, 181,440 will be rewarded to farmers and wallet stakers.

7. At the end of the first week, 75% of the 181,440 CAFE rewards will go to farmers, and 25% of 181,440 CAFE rewards will go to wallet stakers. That means 136,050 CAFE will go to farmers. 45,350 CAFE will go to wallet stakers.

8. Let’s use point 5here where all 20 pools are equally rewarded and distributed. 136,050 CAFEs will be divided equally amongst the 20 pools in the first week. Each pool will yield 6802.5 CAFE the first week.

9. Since we assumed 200 members and 20 pools, let’s assume that means 10 members per pool. Based on point 3, each user stakes 558.75 CAFE, so 10 members stake 5,587.50 CAFE and receives 6,802.5 CAFE per pool. Since everything else is constant, all the pools have the same stats.

10. This means the first week, each user will received 680.25 CAFE for 558.75 Staked. That’s a whopping (680.25/558.75) * 100 = 121.74% return on the first week.

11. 1 CAFE = 0.004 BNB for pre-salers. Assuming no buyers/sellers first week, that means your CAFE will yield optimal results.

12. This is the BASE model. In this series, we will of course factor in:

a) Unequal pool reward distribution

b) FOMO

c) Panic Selling

d) x% buy / y% sells

e) Token burn

f) More to come

Here is the equation for BASE model above:

T = total rewards for week one

w = weight of specific user in terms of amount of CAFE

a = rewards for pool i

m = members for pool i

r = reward allocation for wallet staking

u = specific users

Interested in learning more…?

Please try to understand this model before moving onto EP2!