What Is the Difference between a ‘Deflationary’ and an ‘Inflationary’ Token Model?

An inflationary token model has a continuous increase in the total circulating supply over time, often through block rewards or staking rewards, which can devalue existing tokens if demand does not keep pace. A deflationary token model is designed to reduce the total supply over time, typically through mechanisms like token burns or transaction fee destruction.

Deflationary models aim to increase the scarcity and thus the value of each remaining token, assuming demand remains constant or grows.