Tokenomics & On-chain

What is a deflationary token?

A deflationary token is a cryptocurrency designed so its circulating supply shrinks over time, typically through mechanisms like token burns or transaction fees that permanently remove units from circulation. The intent is scarcity: fewer tokens in supply for the same demand. For example, a protocol might burn a portion of every transaction fee, steadily reducing the total that can ever circulate. Deflation describes only the supply trajectory, not value; price still depends on demand, utility, and market conditions. Reading a project's supply mechanics tells you how issuance and removal are structured.