PancakeSwap: 4% annual deflation rate target is a non-binding cap, and the amount burned is dynamically adjusted based on trading volume
ChainCatcher message, the PancakeSwap team responded to the community regarding the CAKE 3.0 tokenomics proposal.Regarding the 4% annual deflation target, the 4% is based on data from the past two years. Deflation is not limited to 4% per year; the actual amount of destruction will be linked to trading volume, and if the protocol performs well, a higher deflation rate may be achieved. For the mCAKE and sdCAKE exchange issue, the team confirmed that a 1:1 exchange ratio will be maintained, and users need to operate through the original delegation platform.On the topic of holding incentives, the team pointed out that they will adjust the fee distribution, shifting part of the liquidity provider fees towards a buy-and-burn mechanism, which is expected to improve the destruction efficiency to 15%. They also emphasized that CAKE will still play a core role in governance, IF0, and other scenarios. In response to concerns about the efficiency of veCAKE emissions, the team believes that the current proposal can more effectively address core issues and avoid long-term drawbacks caused by short-term fixes.Regarding the issue of governance decentralization, the team stated that they will shift to a direct voting model based on CAKE holdings and consider introducing a delegation feature in the future. For geographical restrictions, the team explained that IF0 will remain open, while TGE has limitations due to compliance requirements from partners.Finally, the team committed to providing real-time destruction data dashboards to maintain transparency in emission decisions and ensure the smooth operation of the veCAKE system during the transition period. During the transition, the veCAKE system will continue to operate until the proposal voting is completed, ensuring a smooth transition.