PancakeSwap: 4% annual deflation rate target is not a hard cap, and the destruction volume is linked to the transaction volume and adjusted dynamically

Mars Finance News, the PancakeSwap team responded to community feedback on the CAKE 3.0 tokenomics proposal. Regarding the 4% annual deflation target, which was set based on data from the past two years, deflation is not limited to 4% annually, and the actual burn amount will be linked to trading volume, potentially achieving higher deflation if the protocol performs well. For the mCAKE and sdCAKE exchange issue, the team confirmed maintaining a 1:1 exchange ratio, with users needing to operate through the original delegation platform. Regarding holding incentives, the team pointed out that they will adjust fee allocation, redirecting some liquidity provider fees towards a buy-and-burn mechanism, expected to enhance burn efficiency to 15%. They also emphasized that CAKE will continue to play a core role in governance, IFO, and other scenarios. In response to doubts about veCAKE emission efficiency, the team believes the current proposal can more effectively address core issues and avoid long-term drawbacks caused by short-term fixes. On the decentralization of governance, the team stated they will transition to a direct voting mode based on CAKE holdings and consider introducing delegation functionality in the future. Regarding geographical restrictions, the team explained that IFO remains open, while TGE has restrictions due to compliance requirements from partners. Finally, the team promised to provide a real-time burn data dashboard, maintain transparency in emission decisions, and ensure a smooth transition of the veCAKE system. During the transition period, the veCAKE system will continue to operate until the proposal is voted on, ensuring a smooth transition.