By Welcome back, folks! Now that we know what tokens are and what they do, let’s look at one of the most important design choices: how many tokens will exist. This choice greatly affects the token’s economics, from its ability to store value to its use as a way to pay for things.
Generally, tokens can be grouped into two types based on their supply: fixed or unlimited.
Blog Post # 4 Fixed vs. Unlimited Token Supply: Scarcity and Flexibility
Fixed Supply Tokens: The Scarcity Model
Think of something like gold or a rare piece of art. There’s only a certain amount around. Fixed supply tokens work the same way.
What it is: These tokens have a built-in limit on the total number that can ever exist. This limit is set when the token is created and usually can’t be changed unless there’s a big update or a complete restart.
How it works: Tokens often come out over time through processes like mining (like Bitcoin), staking rewards (for a limited time), or an initial distribution. Once the maximum number is reached, no more tokens can be made.
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