What Is the Difference between a Capped Supply and an Uncapped Supply Token Model?

A capped supply model, like Bitcoin's 21 million limit, has a fixed, finite maximum number of tokens that will ever exist, ensuring long-term scarcity. An uncapped supply model, like Ethereum's pre-Merge design, has no theoretical limit, meaning new tokens can be continuously minted, potentially leading to inflation.

The choice of model significantly impacts long-term scarcity and intrinsic value.