I think it’s just based on how many comments and favourites a cake gets.
For example, a cake with 5 favourites will be in a higher place than a cake with 2 favourites.
Also, if a cake has more comments it will be higher too.
The Daily Top 3 are the 3 most Favorited cakes and most commented on in the past 24 hours.
Yes, what Laura said but also number of views count too somehow. The different factors are not counted equally either (i.e. the favourites vs. the comments vs. number of views all carry different weights or count differently). Michal has a “secret formula” for calculating it and I understand that he takes into consideration one’s own comments as well (they do not carry as much weight as other members) and I think multiple comments by the same person counts less too.