The deflationary nature of a currency does not guarantee long-term value.

Fiats with long-term currency inflation are often compared to in the crypto space. For cryptocurrency enthusiasts, the scarcity properties of gold or cryptocurrencies constitute an intrinsic guarantee of long-term value.

Long-term currency inflation in fiat currencies is the favorite opponent in the crypto field. For cryptocurrency enthusiasts, the scarcity of gold or cryptocurrencies constitutes an intrinsic guarantee of long-term value.

This article compiles several projects issued with deflationary mechanisms and delves into their price fluctuations.

Most cryptocurrencies, against the backdrop of daily price fluctuations, inflation is almost imperceptible. However, inflation is actually quite common, such as when a blockchain network needs to continuously issue new tokens to reward miners or various nodes.

The deflationary attribute is evident in Bitcoin, with a fixed total supply of 21 million coins. Its scarcity and deflationary nature have led to the continuous depreciation of the value of the US dollar against Bitcoin.

The report points out that if supply exceeds demand, any currency will lose its value. Therefore, many cryptocurrencies combat currency inflation by destroying tokens. For example, XRP burns a small amount of tokens with each transaction, and tokens like Binance Coin buy back and burn tokens to increase the price.

Below are listed some extreme deflationary cryptocurrency projects, where the total supply of tokens rapidly decreases over time. Shouldn't this make the tokens very valuable?

BOMB
The ERC20 token of BOMB was officially launched in May this year. In every transaction between BOMB tokens, 1% of the tokens will be burned. Currently, there are less than 970,000 tokens left, and the number is rapidly decreasing. At this rate, by 2034, there will be almost no BOMB tokens left.

According to the price behavior of BOMB, the market does not seem to equate deflation with price increases. After a sharp increase since the project started in May, the price has been continuously falling.

The team acknowledges that BOMB is more of a social experiment than an attempt at currency. However, it has indeed made some early investors very excited and has sparked numerous imitators.

NUKE
NUKE is also an ERC20 token and aims to outperform BOMB. The total supply of tokens is 1 million, with a burn rate of 2%. Unlike BOMB, NUKE will stop burning tokens around 2036. Similarly, the price peaked rapidly after the project was launched and has been testing lows since then.

The NUKE team believes that their token has utility value and refers to it as the "first deflationary currency with practical applications," planning to introduce native DEX and DApp to prove it. Despite this, the public is quick to see it as an imitation of BOMB and countless other ERC20 deflationary tokens.

The Void Token
Void is an even more extreme deflationary token, with a 3% burn rate with each transaction. Although it has a total supply of 10 million tokens, it may not make a difference. Even the Void team is uncertain about how long it will take for the tokens to burn, only stating in the white paper: only time will tell.

Like NUKE tokens, Void is trying to launch applications and has already launched a gambling project, "Play GOC," and a reward distribution application. However, this will not lead to currency inflation because the rewards come from the token's original supply.

Most deflationary tokens have almost no practical applications, with the only highlight being a very high burn rate. Additionally, most projects do not conduct ICOs but rely on airdrops and referral programs, which may end up like the short-lived FOMO 3D of last year.

Deflationary tokens are among the few projects this year that have shown some performance in terms of price. However, given the limited adoption and utility, in one or two years, BOMB and similar projects may have been long forgotten.

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