Having elected to invest in CubFinance's 1st IDO with CakePop, I made an unsettling discovery upon investigating their payouts this morning.
Before going to bed last night, I had very briefly looked at their BSCScan Contract page, Holders tab to see what the size and distribution of investments into this new platform looked like after ~ 12 hours.
Out of curiousity, I copied and pasted some of them into CakePop's website. Yes, it works! Good, as I like transparency - "out in the light" vs. operating in the shadows ...
At a glance, I could see there appeared to be a discrepancy in the amount of the payouts received, relative to their holdings, by the few addresses I checked. Being both too tired to check into it further, as well as assuming it was just a time delay factor (or something), I let it go.
Well, this morning with time available, I have looked into it further. And my findings have led me to write my first post in weeks.
Let's take a closer look ... 🧐
Are CakePop's Payouts "Provably Fair?"
Before going any further, what do I mean by "provably fair?"
- If CakePop's minimum payout requirement (holding 200,000 CAKEPOP tokens) has been met, that the CAKE payouts are distributed equally!
- Since payouts come from a portion of their LP transaction fees, there must of necessity be a bit of a "time lag" which would result in some having been paid while others are waiting to be paid. That is, there would be a discrepancy in ROI between positions held
So ... On this second point, how much of a "discrepancy" should we view as "okay?"
Calc details:
- CakePop investor's BSC addresses taken from CakePop's BSC Contract page, Holders tab.
- Addresses entered into CakePop's website.
- "Your Holdings" and "CAKE Paid to You" values were copied and pasted in my spreadsheet.
- The ROI calc is Cake Paid divided by Holdings divided by 1,000,000.
So ... Pretty / reasonably close, right?
Nope!
Comparing the largest and smallest ROI values,
the "discrepancy" is ~ 6X!!
Comparing the largest and smallest ROI values,
the "discrepancy" is ~ 6X!!
Yes, I understand that some positions will have received one more payout than others ... Does this explain a "discrepancy" of 6X?
Closing
Well aware this post may be viewed as spreading FUD, I obviously do not agree. Any investment I (or you) make should be able to stand up to any reasonable scrutiny we may chose to apply to it. And if it doesn't?
To be "provably fair" myself, I am making no charges. I definitely have some questions now though! I will end this post with these open questions of @cakepop, as I genuinely do wish for their success. As much for the sake of the success of CubFinance's 1st IDO launch as anything else.
Questions:
- How does your code determine "position in queue?" It can be clearly seen to fluctuate back and forth vs. steadily advancing to where our "position" is going to next be paid out.
- Question based on the assumption no one's holdings are ever more than one payout behind some of the others!
- If this assumption is not correct, please carefully explain why!
- How does your code determine when to pay out CAKE, i.e what requirement(s) need(s) to be met?
- Do your answers fully explain the 6X "discrepancy" I have illustrated in my spreadsheet?
I hope to hear back from any objective source who may have more insight into CakePop than I have. As always, I’d love to hear any other feedback you may be inspired to provide.
Until "next time," all the best to you for a better tomorrow, as we all work together to build up our Hive Communities and add increasing value to our Hive blockchain! 👍 😊
Respectfully,
Blogger @roleerob
Hive "Dolphin" 🐬, LeoFinance "Whale" 🐋, & Man Cave "Dragon" 🐉
🐝 🍯 🐝
P.S. I am not a financial adviser. Please consider this post as financial information and / or opinion only. Please perform your own due diligence, in whatever manner you seems best to you, if you have found it to be beneficial.
🌲 No trees were harmed in the publishing of this post! 🌲
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Edit on 1 Sept 2021 @ 18:45 +UTC
An exchange in Discord referred to the possibility the "discrepancy" written about in this post is simply due to the claim time differential between different addresses, i.e. based on when they "harvested" (claimed) their CakePop tokens.
Okay. Sounded plausible, so I took the time to go back and extract those times. Here are the results:
I thought it was plausible, based upon someone claiming within minutes vs. someone claiming within hours. As we can, all of these "harvested" within the same hour.
So ...
A 6X "discrepancy" in payouts can be explained by a time differential of ~ 58 minutes? That really "tilts" my reasonableness meter, but ... I will quickly follow up and say I simply don't know.
Is it "provably fair" that we now see a CakePop Dev / Admin account got the highest payout? Again, I don't know. Nor am I going to spend any more time on this.
I do hope @cakepop will cover this in some detail, so there will be no more questioning whether their payout mechanism is "provably fair."