@natividadbloomfi
A token’s inflation rate directly affects its scarcity and long-term value. High inflation increases circulating supply, potentially diluting holders’ positions and suppressing price appreciation. Assessing the tokenomics schedule, issuance frequency, and vesting periods helps determine whether inflation aligns with network growth. Comparing inflation to ecosystem adoption, staking rewards, and burn mechanisms can indicate whether new supply is absorbed sustainably. Investors should also analyze historical price response to supply increases. Balanced inflation that supports incentives without excessive dilution enhances long-term investment value, while unchecked inflation can undermine token demand and erode confidence.
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