Definition ∞ Tokenomics inflation refers to the increase in the total supply of a digital token over time, as determined by its underlying economic model or ‘tokenomics’. This expansion can occur through block rewards, staking incentives, or other emission mechanisms. It affects the token’s scarcity and potential value within its ecosystem.
Context ∞ Tokenomics inflation is a critical aspect of a digital asset’s design, balancing network security incentives with potential dilution for holders. The rate and mechanism of inflation are frequently debated, as they significantly influence a token’s long-term value proposition and the economic health of its associated decentralized ecosystem.
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