PancakeSwap: The 4% annual deflation rate target is not a hard cap, the amount of destruction is dynamically adjusted according to transaction volume

The PancakeSwap team has responded to the community feedback on the CAKE 3.0 tokenomics proposal. Regarding the 4% annual deflation target, 4% is a goal set based on data from the past two years, and deflation is not limited to 4% per year. The actual amount of tokens burned will be linked to transaction volume, and higher deflation may be achieved if the protocol performs well. For mCAKE and sdCAKE exchange issues, the team confirmed that they will maintain a 1:1 exchange ratio, and users need to operate through the original delegation platform.

Regarding holding incentives, the team pointed out that it will adjust fee distribution by redirecting some liquidity provider fees towards buy-and-burn mechanisms which are expected to increase burn efficiency up to 15%. They also emphasized that CAKE will still play a core role in governance scenarios such as IF0. In response to doubts about veCAKE's emission efficiency, they believe that current proposals can more effectively solve core problems while avoiding long-term disadvantages brought about by short-term fixes.

On decentralization of governance issue, they stated their intention of moving towards direct voting model based on CAKE holdings and considering introducing delegation features in future. As for geographical restrictions issue, they explained IF0 remains open while TGE has limitations due to compliance requirements from partners. Lastly, they promised real-time burn data dashboard for transparency in emission decisions ensuring smooth operation of veCAKE system during transition period which continues until proposal vote completion ensuring smooth transition.