How TXA’s supply decreases over time
It’s all too easy for a cryptocurrency project to print infinite money by simply creating an inflationary token. After all, if your token is in demand, and you could make a fortune simply by generating new tokens and selling them, why wouldn’t you?
Unlike many other projects, at TXA we believe that an inflationary token is a very bad idea. That’s why we created TXA with a maximum supply hardcoded into the blockchain and plenty of deflationary mechanisms designed to bring the token supply down over time.
In other words: there will never be more TXA in existence than there is right now, and that number of tokens will continue to decrease over time. To better understand this, let’s answer a few key questions.
Why is a deflationary token a good thing?
The vast majority of people buy a cryptocurrency token because they think that it will increase in value in the future. When a token is inflationary, that means that there will be additions to the token supply over time; when a token is deflationary, that means there will be decreases to the token supply over time. Factoring in the basic economics of supply and demand, it’s easy to see how having more of a given token would make every other token a little less valuable. The opposite of this also holds true: the fewer of an object there is, the more the remaining objects are worth due to increased scarcity.
This is the same idea that helps Bitcoin stand out from the US Dollar, and is also the idea behind TXA. Our thinking: by creating TXA as a deflationary token, we can reward token holders through sound tokenomics.
How does TXA’s deflationary mechanism benefit token holders?
As TXA tokens are removed from existence, the overall value of every remaining TXA token should, in theory, increase as the relative scarcity of TXA tokens also increases. Put another way, if you own 4,000 TXA tokens, and the team behind TXA burns 22,000 TXA tokens, the 4,000 TXA tokens you have enjoy increased scarcity.
What are the deflationary mechanisms behind TXA?
Validators on the network are required to burn TXA in order to participate in settlements and earn fees. The amount of TXA burnt is proportional to the total dollar value of the collateral posted for settlement. The burn rate must stay below the fee rate to ensure the profitable operation of validators. Stakers will stake both a stablecoin and TXA at a fixed ratio, and TXA will be burned according to the size of the settlement that TXA Network Validators participate in.
What else should I know about TXA?
As an up-and-coming cryptocurrency project, joining the TXA community at this stage is a unique opportunity to join a rising star at the ground level. Instead of being one of the last people to join a movement, why not enjoy getting on board at the ground floor for a change?
New to Project TXA and wanting to learn what it’s all about? Be sure to follow us on Twitter to catch the latest updates and join our Discord community to meet the team and make friends. We love to give crypto to our community, and staying active on our Twitter and in our Discord server are the best ways to be the first in line.
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