# Tax and Rewards Flow ## **Tax Flow in Cake Panda (CAPA) Meme Nation** **Initiation:** * A transaction (buy, sell or transfer) occurs within the CAPA Meme Nation. * A 6% tax is applied to the transaction. **Tax Collection:** The tax is collected and sent to the Reservo Chef. **Reservo Chef Activation:** * Value of assets in the Reservo Chef exceeds $5,000 * An "active citizen" triggers the Reservo Chef. * Threefold allocation process begins **Threefold Allocation:** Assets from the Reservo Chef are divided into three equal segments: i) Hype deflationary burn ii) Rewarding with $CAKE tokens iii) Funding essential activities **Divvy Reservo Transfer:** $CAKE tokens allocated for rewarding are transferred to the Divvy Reservo **Spell Trigger:** * The Spell Trigger is activated every two weeks * Accumulated $CAKE tokens in the Divvy Reservo are distributed: i) 25% is immediately distributed to loyal citizens as Spell Divvy. ii) 75% is held in the Divvy Reservo for Era Reward. **Era Reward Accumulation:** * 75% of $CAKE tokens from the Divvy Reservo are added to the Era Reward. **Relaunch Event:** * Relaunch event occurs after meeting it's conditions * Assets from the Era Reward are redistributed to citizens * Token supply is reset * New cycle begins Understanding this intricate tax flow and distribution mechanism provides insights into the governance and economic structure of the meme nation, enhancing transparency and participation for its citizens. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://cakepanda.gitbook.io/capa/capa-defi-protocol/tax-and-rewards-flow.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.