Supply Structure
token issuance framework • scarcity mechanics • emission control
Supply Structure refers to the predefined rules that govern how a cryptocurrency or token is created, distributed, and potentially removed from circulation. It includes total supply limits, emission rates, inflation/deflation models, and mechanisms like minting, vesting, and burning. A well-designed supply structure is key to managing scarcity, price stability, and long-term incentive alignment across a Web3 ecosystem.
Use Case: A token launches with a fixed max supply of 1 billion units, where 40% is reserved for community rewards, 20% for team and advisors (with a 2-year vesting schedule), and a burn schedule that removes a portion of transaction fees over time to reduce supply and increase scarcity.
Key Concepts:
- Fixed vs. Inflationary — Determines whether total supply is capped or can expand over time.
- Token Emissions — The rate at which new tokens are released into circulation.
- Burn Mechanisms — Protocol rules that permanently remove tokens to reduce supply.
- Vesting Schedules — Time-locked token distribution to prevent early sell-offs by insiders.
Summary: Supply Structure shapes the economic DNA of a token. It directly impacts scarcity, user behavior, and market perception—making it a critical part of tokenomics design and investor confidence in both short-term functionality and long-term viability.