Definition ∞ Token supply inflation describes the increase in the total circulating supply of a digital token over time. This typically occurs through programmed issuance mechanisms or mining rewards as defined by the protocol. This expansion can significantly influence the token’s value and economic model within its ecosystem. It is a fundamental aspect of a token’s economic design.
Context ∞ Understanding a token’s inflation schedule is critical for investors and participants, as excessive or uncontrolled supply growth can dilute value. Such inflationary pressures impact long-term economic sustainability within decentralized protocols. Project teams frequently communicate changes to these schedules, which market participants closely analyze.
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