does minting more token reduce its price?

I am extremely sure that it doesnt but as Twain said: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

lets say i have my own token with a price of $10, 1000 in circulation and therefore a marketcap of $10000

if i were to mint another 1000 token to a wallet and NOT SELL them, would the price still be $10, CS be 2000 and marketcap $20000?

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12 thoughts on “does minting more token reduce its price?”

  1. It doesn’t reduce it by simply minting, it reduces it by creating higher selling pressure risk. This is why every protocol that gives very high APY’s by minting or setting aside large amounts of their own token end up tanking after the first few months.

    Once the selling pressure begins to outpace adoption, its over. It is inevitable, not if, but when.

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  2. *Theoretically* yes but that’s theory. It isn’t *mandated* to play out that way. Most crypto has a hard cap but until that’s reached, there’s more and more of it being minted and potentially available for sale every block of everyday. However, that doesn’t drop the price every block *just because*.

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  3. Increasing supply whilst the size of the market stays the same will decrease the price of the token. For the token to stay the same in price or increase the demand has to scale with supply. If supply increases by 100% and demand increases by 100% then there is no change in price. If supply increases by 400% and demand is reduced by 50% then the price of the token goes down a lot (any dex token).

    Supply and demand powers any and all markets.

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  4. There are two questions here:

    If you’re asking will minting tokens directly reduce the token price in an AMM, the answer is no. A typical AMM has no knowledge whatsoever of what is being minted or not minted, that information is not available to the code

    If you’re asking will minting tokens cause actors in the market to behave differently and reduce the token price, the answer is probably yes for the usual basic economic reasons: supply and demand, fear of inflation or rugpull, etc.

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  5. Monetary inflation doesn’t directly cause price increases.

    Velocity is needed.

    The mint and burn claim don’t have any direct effect on price by themselves.

    It can affect perception, negatively or positively. Eg getting higher on Coingecko or creating a marketing camping around a burn. It’s pretty stupid overall.

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  6. If you want to choose what the value of your token is, why just $10, why not a $mil.

    If your want to know the actual value of your token, you will have to bring to the market and see what people are willing to offer.

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  7. That’s why SAFUU Protocol’s Firepit mechanism takes care of the extra minted supply and successfully maintains its high fixed apy and it will go hyper deflationary when it reaches 50% of total supply burned.

    Already 3xed my money with SAFUH during this fucking bear market. God sent.

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  8. For me, as a long-term holder, cryptocurrencies with a deflationary model such as wut (wowmax), bnb (binance), okb (okex) are a tidbit

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  9. We can see this happening with the US Dollar. Tons of money printed in 2020, but inflation (the reduction of purchasing power of the currency, aka it’s “value”) didn’t start setting in until over a year later. The printing alone does nothing. It’s the selling of the currency for goods/services/assets that causes pressure on it, and that takes time.

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  10. It’s all about liquidity. Minting means putting more tokens into circulation but if the liquidity doesn’t increase as well than price yes the price will evebtually come down

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