To better understand the concept of Deflationary token, let’s look into inflation. When a currency is devalued, or depreciated, inflation is said to have occured. This means that one’s currency- the asset as a medium of exchange for different “things” such as goods or services, has gone through a decrease in value.
Take this as an example, Yesterday, you went into a store to buy a basket of various fruits. The total comes down to $10. Then today, after your $(USD) has experienced inflation, you will go in and buy the same basket of various fruits, but this time you spent $15. When this is applied to a bigger scale, it has a greater impact on the whole economy, than it does for you as a single consumer and furthermore a much bigger impact.
In other words, The US dollar and all fiat currencies are inflationary. Governments can decided to produce (print) them at any time and move them into circulation, thereby flooding the market. Thus, the supply increases whereas the demand remains the same or decreases leading to the lower value of the fiat currencies.
Deflation is the exact opposite of this.How ever there is a step higher than this called Hyper-Inflation. In reference to the expression by some experts, In economics, hyperinflation is very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as they usually switch to more stable foreign currencies, often the US Dollar.
Hyper-Deflation, again is the exact opposite of this experience. Where it becomes interesting is to see that the crypto-space has proved over and over again that it has the capacity to outsmart traditional economic rules to liberate its users.
A case study of this domain is VOID.
Void is a justifiably celebrated achievement to be the first self-deflationary currency developed on a very strong and hyper-active network with an outstanding leadership and vibrant community.
The rate at which its self-deflates is referred to as Burn Rate. An with Void, its burn rate is 3%. This burn occurs per use, otherwise known as transaction.
Hence, for every Void transaction made, 3% of its total supply is reduced and sent into Void- (Exactly how the name was gotten). This burn reduces the supply and increases the demand.
While, analysts still refers to the concept as an experiments, some projects have in their few months of existence experienced huge success. VOID has a stable burn rate and is expected to out perform other who currently run on the ERC-20 network.
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Check the Void website here: https://voidtoken.io/
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