4.3 Impact on Supply, Demand, and Token Value

By reducing the rate of new token issuance, the halving mechanism increases scarcity, a key factor that can drive demand. As fewer tokens are available in the market, their perceived value may rise, benefiting long-term holders and investors.

This deflationary approach encourages users to hold and stake their tokens rather than sell them immediately, contributing to price stability and reducing market volatility.

At the same time, the gradual supply reduction helps maintain a fair distribution of rewards among participants. Early adopters benefit from higher rewards initially, but as the network matures, new participants still have incentives to join, ensuring a balanced and sustainable economy.

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