What are the factors that influence the supply of XLM in the crypto market?

1 answers

• Dec 25, 2021 · 3 years ago
  The supply of XLM in the crypto market is influenced by a variety of factors. One of the main factors is the overall demand for XLM. When there is high demand for XLM, the supply tends to decrease as more people hold onto their tokens. Conversely, when there is low demand, the supply tends to increase as people sell off their tokens. Market conditions and investor sentiment also play a role in determining the supply of XLM. If the market is bullish and investors are optimistic about the future of XLM, they may hold onto their tokens, leading to a decrease in supply. Conversely, if the market is bearish and investors are pessimistic, they may sell off their tokens, increasing the supply. The protocol itself also has an impact on the supply of XLM. Stellar, the blockchain platform on which XLM operates, has a built-in inflation mechanism that allows for the creation of new XLM tokens. This inflation mechanism is controlled by the Stellar Development Foundation, which periodically distributes new XLM tokens to eligible accounts. This can affect the overall supply of XLM in the market.
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