Definition ∞ A zero supply condition occurs when a digital asset’s circulating supply effectively becomes zero. This state can arise from various tokenomics mechanisms, such as a protocol burning all tokens, locking them indefinitely, or removing them entirely from active circulation. It can be a deliberate design choice to manage scarcity, incentivize specific behaviors, or signal a protocol’s end-of-life. This condition has significant implications for market dynamics.
Context ∞ While rare, a zero supply condition can be a critical event in a digital asset’s lifecycle, potentially impacting its market value and utility, and would be significant news. It might indicate a protocol’s successful completion of a migration, a catastrophic failure, or a planned deflationary event. Understanding the tokenomics that could lead to such a condition is essential for assessing the long-term viability and risk of digital assets.
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