The total supply refers to the entire quantity of cryptocurrency that has previously been produced, mined, or issued as of the time of writing. Let's explore more in this article.
What is The Total Supply Of Cryptocurrency?
Total supply represents the total number of coins that have previously been produced or mined in a certain period. Not all of the coins listed in this measure are currently accessible for usage, and coins that have been burnt are excluded from consideration.
Circulating Supply vs Total Supply
Circulating supply is different from total supply in that it counts all coins that are currently in circulation on the blockchain. The owner of Bitcoin, Satoshi Nakamoto, has more than one million BTC, or $20 billion at the time of writing. Despite the fact that The coins haven't been moved in more than ten years, they are still regarded as being in circulation.
A sudden increase in the total supply can seriously harm a project.
One example is the fall of Terra (LUNA). The Terra team had to create new LUNA to back the liquidity of the algorithmic stablecoin UST in order to re-peg it. In a few days, the overall supply of LUNA rose from 300 million to 6.5 trillion. The price went down from $80 down to $0.0001–a fraction of a cent due to the rapid increase in supply, devaluing the project.
This risk is not likely in the case of Bitcoin, as the inflation rate is spread out over 100+ years. The risk of inflation is higher for DeFi coins powered by smart contracts, especially with minting bugs causing the majority of hacks in the DeFi scene .
What is The Total Supply Of Cryptocurrency? Circulating Supply vs Total Supply - Hopefully, this article can help you to get some knowledge.
