How Do “Halving” Events Affect the Long-Term Inflation Rate of a Token?

Halving events, common in Proof-of-Work (PoW) tokens like Bitcoin, periodically cut the rate of new token issuance (mining rewards) in half. This significantly reduces the long-term inflation rate, leading to a predictable, diminishing supply schedule.

The reduction in supply shock is generally priced in as a positive event that increases scarcity and supports a higher intrinsic value over the long term, assuming demand remains constant or increases.