Maximum Supply

A cryptocurrency's maximum supply is the total number of coins or tokens that will ever be produced. This implies that there won't be any new coins produced through mining, minting, or any other method after the maximum supply has been reached. The constraints established by each digital asset's underlying protocol typically serve as a cap on the maximum supply. Therefore, in accordance with the project's source code (which also defines many other features and functionalities), the maximum supply and issuance of new coins are often specified at the genesis block. Setting a constant issuance rate and a predetermined maximum supply can be useful for limiting a cryptocurrency's rate of inflation, which may eventually result in a long-term increase in the value of the asset. In general, there will be fewer coins on the market when the maximum supply is achieved. Market scarcity is anticipated to result from this, which could eventually bring about deflationary conditions (or inflation rates of 0%). Some cryptocurrencies, on the other hand, do not have a predetermined maximum supply, allowing for continual mining or coin production. A famous example of a cryptocurrency system without a set maximum supply is Ethereum. As new blocks are created, the supply of ether keeps growing. Max supply vs. total supply As previously indicated, the computation of the maximum supply takes into account both the coins that have already been produced (or mined) and those that will be released in the future. In contrast, the total supply only comprises coins that have already been minted, minus any coins that have been destroyed, such as during coin burn events.