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RE: More on why decreased inflation equates to a lower token price.

in LeoFinance4 years ago

it works with doge coin

I specifically stated in the OP that POW coins, whose inflation only goes to miners, does not apply to this theory.

I've said it before, I'll say it again:
it does not matter how much inflation there is if that inflation is fair.
With DeFi yield farming it can't get any more fair.
Applying this theory to Hive is a completely different subject (mostly due to downvotes).

If I have 1000 tokens and each one is worth $2: I have $2000.
If inflation increases 100% I now have 2000 tokens worth $2000: nothing has changed except the token price.

It does not matter how much inflation there is: it matters how many buyers there are.
It's the liquidity that matters.
By maintaining a stable price defi tokens will get more liquidity: especially with AMM.

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