{"id":1571,"date":"2021-12-16T13:00:25","date_gmt":"2021-12-16T13:00:25","guid":{"rendered":"https:\/\/swapzone.io\/blog\/?p=1571"},"modified":"2023-11-17T13:14:44","modified_gmt":"2023-11-17T13:14:44","slug":"deflationary-crypto","status":"publish","type":"post","link":"https:\/\/swapzone.io\/blog\/deflationary-crypto","title":{"rendered":"Hot Now: Deflationary Cryptos"},"content":{"rendered":"

It\u2019s not a secret that blockchain<\/a> technology has brought us into a new era of digital finance. At the moment, the crypto industry is steadily rising to unprecedented levels. Currently, there are over 11,000 digital currency projects in the market<\/a>. The cryptocurrency market cap is now at over $2 trillion and analysts expect it to continue at an upward trend. Therefore, it\u2019s important that you understand that the economic models of some cryptocurrencies have helped fuel their growth. These cryptos are known as deflationary cryptocurrencies. So what are deflationary cryptocurrencies and how are they achieving growth? Stick around to find out the list of deflationary cryptocurrency to follow.<\/p>\n

\"List<\/p>\n

What is Deflationary Cryptocurrency?<\/strong><\/h2>\n

A deflationary cryptocurrency is a cryptocurrency designed to reduce supply over time. In simpler terms, the cryptocurrency in question has a depreciating supply of coins. This means that the number of coins in circulation dwindles, therefore, ultimately boosting the value of each coin. As demand for the coin increases, so will the value. Apart from improving the value of the token, a deflationary token is designed in this manner to also prevent the market from being flooded with the token.<\/p>\n

There are a lot of ways that deflationary tokens achieve their goals. However, the two main methods with what deflationary tokens get rid of coins include:<\/p>\n

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  • Buy-back and Burn<\/strong><\/li>\n<\/ul>\n

    In this method, the company managing the cryptocurrency project buys back crypto from the market and sends these tokens to a dead wallet address. By doing so, they reduce the overall supply of coins in the market. Therefore, if demand remains the same, the overall value of the coin increases.<\/p>\n

      \n
    • Burn on Transaction<\/strong><\/li>\n<\/ul>\n

      This method involves the use of a smart contract embedded into the coin\u2019s code. The smart contract specifies that on-chain transactions attract a tax of which a part is collected and burned. The burn happens automatically too. Therefore, the higher the trading volume, the more coins are removed from circulation.<\/p>\n