What are the advantages of deflationary crypto assets?

Asked 2 years ago

Deflationary crypto assets is the new buzzword around my business. What are the advantages of deflationary crypto assets?

Sheldon Owen

Saturday, July 23, 2022

There are multiple benefits investors and developers get from deflationary tokens. Above all, deflationary cryptocurrencies strive to solve the significant problem of fiat money – inflation. Below are the three primary advantages of deflationary tokens:

Increase in a token's value: The principle law of supply and demand dictates that an increase in the supply of assets results in a decrease in demand. Deflationary tokens aim to minimize their circulating supply, increasing their scarcity and demand.

Generating profits: During the 2022 bull run, deflationary tokens generated more profits than their inflationary counterparts. The deflationary aspect directly raises investor interest, which causes high demand and better price discovery.

Eliminating extra coins from the market: Unsold coins in circulation damage the project's progress. Deflationary methods help projects eliminate them from circulation and unclog the market.

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