Deflationary Tokenomics 101: How Buyback-and-Burn Models Work

“Deflationary” is one of crypto’s favorite buzzwords. A project announces a fixed supply, adds a burn mechanism, and the assumption is that fewer tokens must eventually mean a higher price. Tokenomics aren’t that simple. Buybacks and burns reduce supply or create recurring demand for a token, but the details determine whether those mechanisms are economically meaningful. How many tokens can be created? Where does the money for buybacks come from? What triggers a burn? And, crucially, is there actual activity generating the money that keeps the system running? Start with supply.

Source: DailyCoin