Glossary
What is a Token Total Supply? Definition and Usage in Cryptocurrency
What is Token Total Supply
Token Total Supply refers to the current supply of a cryptocurrency token. The total supply may be fixed or variable. When new tokens are minted, they are added to the total supply. When burned or destroyed, tokens are subtracted from the total supply. The total supply includes locked, reserved, and circulating tokens.
The total supply and the maximum supply are not the same. The total supply is the current number of tokens in circulation, while the maximum supply is the maximum number of tokens that can ever exist.
The total supply, maximum supply, and circulating supply may have the same value, but they represent different aspects of the token’s availability and distribution.˜
Token Total Supply — Key Concepts
Fixed Supply: Tokens with a fixed total supply have a set number of tokens that will ever exist. This scarcity can create value and drive demand for the token.
Variable Supply: Tokens with a variable total supply can adjust the number of tokens in circulation based on predefined rules or mechanisms.
Minting and Burning: Minting adds new tokens to the total supply while burning removes tokens from circulation. These processes can affect the token’s value and supply dynamics.
Locked and Reserved Tokens: Total supply includes tokens that are locked, reserved, or not yet released to the public. These tokens may become part of the circulating supply at a later date.
Circulating Supply: The circulating supply is the number of tokens available for trading or transactional use by the general public. It is a subset of the total supply.
Maximum Supply: The maximum supply is the total number of tokens that can ever exist. It is a theoretical limit that cannot be exceeded. It is different from the total supply.
Token Supply Dynamics
Minting or burning tokens can change the total supply of a token. Minting creates new tokens, increasing the total supply, while burning removes tokens from circulation, decreasing the total supply. These processes can manage inflation, deflation, and token distribution.
Supply management is often related to token economics and . Voting mechanisms and smart contracts can define how tokens are minted, burned, and distributed.
Projects may create new tokens as rewards for network participants, validators, or users who contribute to the ecosystem. However, excessive minting can lead to inflation and devaluation of the token. Burning tokens can help control supply and maintain scarcity, potentially increasing the token’s value.
Token Inflation and Deflation
Inflation occurs when the total supply of tokens increases, decreasing the token’s purchasing power. Conversely, deflation happens when the total supply decreases, increasing the token’s value.
Inflation can be managed by controlling the rate of token minting and ensuring that new tokens are distributed fairly.
Deflation can occur when tokens are burned or lost, reducing the available supply. This can create scarcity and drive up the token’s value. Excessive deflation can lead to higher network fees and reduced .
Neo GAS Supply Dynamics
GAS is the utility token on the Neo blockchain. NEO holders generate GAS on the Neo blockchain by holding Neo and voting for network validators. GAS is used to pay transaction fees.
Currently, the network generates 5 GAS per block. To balance, executing smart contracts and using Neo Name Service (NNS) burns GAS. These mechanisms are used to control token inflation.
The Neo committee can configure the amount of GAS generated per block and the fees. High network fees may help reduce inflation by burning more GAS, but they can also affect the network’s usability and adoption.
Neo GAS Total Supply
There isn’t a fixed total supply of GAS. The total supply, maximum supply, and circulating supply are the same. The supply changes based on network activity and usage. This doesn’t apply to NEO, which has a fixed total supply of 100 million tokens.
Locked and Reserved Tokens
Tokens locked, reserved, or not yet released to the public are included in the total supply but not part of the circulating supply. The project team or investors may use these tokens for specific purposes, such as staking, governance, or partnerships.
Locked tokens are typically released over time according to a vesting schedule or based on specific conditions. Reserved tokens may be allocated for future use, partnerships, or ecosystem development.
The circulating supply is used to calculate market capitalization. Multiplying the circulating supply by the current token price estimates the token’s total market value. Other platforms may use the total or maximum supply to calculate market capitalization, leading to variations in reported values.
Token Supply Transparency
Identifying the correct amount of locked, reserved, and circulating tokens is non-trivial and requires transparency from the project team. Reliable projects disclose their token distribution and vesting schedules to clarify the total supply and circulation numbers.
The information about token supply is often transmitted through blockchain addresses or by querying smart contracts. Users can look for this information on block explorers, project websites, and token documentation or reports.
Code Standards and Token Supply
Token standards like ERC-20 and NEP-17 define how tokens must behave, including supply management. These standards specify functions for minting, burning, and transferring tokens, ensuring interoperability and compatibility across different applications.
The token supply functions in the smart contract code can be audited to verify that the token behaves as intended.
Developers must implement the totalSupply function to return the total supply of tokens. This function is used by wallets, exchanges, and other applications to display the token’s supply information.
