Fixed token supply refers to a cryptocurrency or digital asset having a predetermined, unchangeable maximum number of units. This characteristic ensures scarcity, as no new tokens beyond the specified limit can ever be created, preventing inflationary pressures from new issuance. It contrasts with assets that have an uncapped or algorithmically adjustable supply. The fixed nature of the supply is often programmed into the underlying protocol’s smart contract or blockchain rules.
Context
The concept of fixed token supply is a fundamental attribute for many prominent cryptocurrencies, influencing their economic models and market perception. Discussions frequently address the long-term deflationary implications and how this scarcity might affect transaction fees or network security as block rewards diminish. Debates exist regarding the optimal supply schedule and whether a truly fixed supply is always beneficial for a growing ecosystem. The sustained appeal of assets with a fixed supply remains a key trend in digital asset markets.
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