@marguerite43
A deflationary token model can create long-term value if it is supported by continuous demand and sustainable ecosystem growth. Scarcity alone does not guarantee success; there must be strong use cases driving token consumption. Successful deflationary projects often integrate mechanisms like token burns tied to transaction volume, staking rewards that encourage holding, and regular buybacks funded by protocol revenue. Overly aggressive deflation may harm liquidity, making it difficult for new participants to join. The key is balance—gradually reducing supply while ensuring that the token remains usable and accessible. This approach helps stabilize price growth over time and aligns incentives between users, developers, and investors in a healthy, scalable way.
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