Definition ∞ Crypto cap refers to the maximum supply of a particular cryptocurrency that will ever exist. This fixed limit is typically hardcoded into the protocol, preventing an infinite issuance of coins and often contributing to the asset’s scarcity and potential value. It serves as a fundamental economic parameter for many digital assets, influencing their long-term supply dynamics and inflation rates. Projects with a defined crypto cap often attract investors seeking assets with predictable supply schedules.
Context ∞ The concept of a crypto cap is a frequent topic in discussions about digital asset valuation and monetary policy within decentralized systems. Debates often focus on whether a fixed supply truly guarantees long-term value, especially with changes in network utility or demand. Future developments will likely see more nuanced token economic models that adjust supply based on network activity, moving beyond simple hard caps.
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