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My favorite fictional setup is a hard cap and no trading. It makes every contract a much bigger deal. Teams can go over the salary cap, but the way this happens is through minor league deals becoming major league contracts, automatic renewals, and arbitration. A team can't sign free agents and can't sign extensions that will take them over the cap. It does function pretty well to keep an even playing field.
I've always preferred an NFL type even playing field, though some prefer seeing leagues where there are powerhouses throughout history and there are some that rarely compete.
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