Why The Token Supply is So Low

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This post is not financial advice.

Why is the UNICOIN circulating supply is so low

It may seem a little odd for those not familiar with the token why we keep the supply so low especially when the token is backed by 3x HIVE/Hive-engine assets.

Short answer: Keeping the supply low allows for some wiggle room and also allow the tokens backing UNICOIN to grow at a faster pace than they are minted.

We do buybacks here as well as balance the LP. Lately that balance has worked in our favor, more people buying than selling but in order to be able to comfortably keep the LP balanced, have enough funds for buybacks and keep the LP rewards high the supply needs to be carefully managed.

Burns are a factor as well. Those help keep the numbers down. Though tokens are recycled before burned.

Tokens are not minted before they are backed but also are only minted when necessary. When there is demand /need more are minted. When supply is even, the account just grows without needing to mint new tokens.

Low inflation is a good thing. In fact UNICOIN is deflationary over time because buy backs have been and will always be a part of the tokenomics and many tokens that are bought back are burned.

I haven't been doing as many burns lately because it's just not really necessary and I haven't had many excess tokens. I am still building up the liquidity in the LP so for the moment any extra tokens are being stashed there.

This won't always be the case but as more people use the LP I figure more liquidity in the pool will only help. I will likely add at least 100 or more tokens to the LP by the end of the year just to give it a small buffer.

Low token supply is a good thing. I like to keep the ratio at least 2-3x tokens held to back UNICOIN as tokens in circulation and keeping the supply low allows to to expand that ratio over time in addition to all the other reasons.