How Do Liquidity Mining Programs Influence TVL and Token Supply?

Liquidity mining programs offer additional token rewards to users who provide liquidity to the protocol's pools. These programs rapidly increase TVL by attracting capital, but they also rapidly increase the circulating token supply through the reward emissions.

This trade-off means that while TVL increases, the token's price can be suppressed by the high inflation. The program's success is judged by whether the long-term utility gained outweighs the cost of the inflationary supply.