@barbara118
The deflationary model of a project token can potentially drive long-term value if it is paired with actual demand and real-world utility. Reducing token supply through burning or buyback mechanisms creates scarcity, which can positively impact price. However, without consistent user growth and revenue-generating use cases, deflation alone cannot sustain long-term value. Overly aggressive deflation may harm liquidity, discouraging participation from new users or institutions. A balanced approach, where deflation complements organic demand, is more sustainable. Successful models often pair deflationary mechanics with staking, governance incentives, or real-world applications, ensuring continuous engagement and adoption while gradually decreasing supply in a controlled and transparent manner to maintain ecosystem health and stability.
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