What factors determine the circulating supply of a cryptocurrency?

1 answers

• Emil LindhardsenAug 02, 2023 · 2 years ago
  When it comes to determining the circulating supply of a cryptocurrency, there are several factors at play. One of the main factors is the token distribution strategy employed by the project. If a large portion of tokens is held by a small number of individuals or entities, the circulating supply may be limited. Conversely, if the tokens are widely distributed among a larger number of holders, the circulating supply will be higher. Another factor is the rate of token issuance. If the project has a high rate of token issuance through mining or staking, the circulating supply will increase more rapidly. On the other hand, if the rate is low, the circulating supply will grow at a slower pace. Additionally, factors such as token burns, token lock-ups, and token release schedules can also impact the circulating supply. These factors collectively determine the availability and distribution of the cryptocurrency tokens, which can have implications for its market value and liquidity.
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