Scarcity Model

Definition ∞ A scarcity model is a framework that defines the limited availability of a resource or asset. In digital assets, this often refers to a predetermined maximum supply or a controlled rate of issuance, designed to influence value through supply and demand dynamics. Such models are fundamental to the economic design of many cryptocurrencies and non-fungible tokens (NFTs). The predictable nature of scarcity can contribute to asset perceived value and investment appeal.
Context ∞ The current discussion regarding scarcity models frequently centers on their role in asset valuation and their long-term sustainability. A key debate involves the effectiveness of fixed supply versus inflationary models in fostering network security and adoption. Future developments to watch include the analysis of real-world economic impacts of various scarcity models and the potential for adaptive scarcity mechanisms that respond to network conditions.