Token Supply Manipulation

Definition ∞ Token supply manipulation involves illegally changing the total number of tokens in circulation to unfairly affect their value. This refers to the unauthorized or deceptive alteration of a digital asset’s circulating supply, typically through exploiting smart contract vulnerabilities, undisclosed minting capabilities, or dishonest burning mechanisms. This act aims to artificially influence the token’s market price or perceived scarcity, often leading to financial losses for legitimate holders. It represents a severe breach of trust and economic integrity.
Context ∞ News reports frequently expose instances of token supply manipulation, highlighting the devastating impact on investor confidence and market stability. These events underscore the critical importance of transparent tokenomics, rigorous smart contract audits, and robust governance mechanisms. The ongoing fight against such manipulation is central to protecting participants in the digital asset market.