Inflation vs Deflationary Models
Plain English
Inflationary tokens increase in supply over time (like traditional money printing), often to reward validators or stakers. Deflationary tokens decrease supply through burns. Each model has different effects on value and network incentives.
Technical
Monetary policy models affecting token supply dynamics: Inflationary models increase supply through staking rewards, mining rewards, or ecosystem incentives, encouraging network participation but potentially diluting value. Deflationary models reduce supply through burns, creating scarcity value but potentially limiting growth incentives. Many modern protocols use hybrid models adjusting based on network conditions.