# Supply and Market Dynamics

* Total Supply: The maximum number of tokens created, influencing inflation and scarcity.
* Circulating Supply: Tokens actively available for trading and use, affecting liquidity and market stability.
* Inflationary vs. Deflationary Models: Inflationary models release new tokens regularly, potentially diluting value, whereas deflationary models reduce token supply over time, potentially driving scarcity and demand.

  <figure><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe-oXny5Hp6SGxjvPt5Jc7J_uhc164_8shiGXqug01Xhh13nJeSSWl7LArFXC3JN0BOP3ESui00u50AWTNlGA5pl_73gzxOI90ceq-1ui0Rny0DtN5Dy2g7SVHwAXVOt4rsrZoJcg?key=Wtr3hUkfpyzevrOpeKWk6nmo" alt="" width="563"><figcaption></figcaption></figure>
* Variable vs. Fixed Supply Models: Variable supply models allow adjustments to the total supply based on economic conditions or governance decisions, providing flexibility. Fixed supply models have a predetermined total number of tokens, creating certainty and often encouraging scarcity-based value appreciation.
* Market Capitalisation: Reflects token valuation based on circulating supply and market price.
* Fully Diluted Market Cap: Reflects total valuation considering all tokens that will ever exist, providing insight into long-term expectations and potential market pressures.


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