Why Would Anyone Reduce The Supply of Tokens?

TL;DR

• The co-founder of Jupiter, Meow, just posted a proposal about changing the tokenomics of JUP by reducing the total supply from 10B to 7B JUP tokens.

Full Story

The co-founder of Jupiter, Meow, just posted a proposal about changing the tokenomics of JUP.

👆 If you thought that sentence meant something about an interplanetary cat with money, we got you (although it’s not that far from the truth).

Here’s what it means:

JUP is the token that powers the Solana-based decentralized exchange aggregator, Jupiter.

Meow, Jupiter’s co-founder, just proposed that: instead of having a total supply of 10 Billion JUP tokens, the total supply should be reduced by 30%, down to 7 Billion JUP tokens.

(There were a few other ideas in the proposal as well but let’s dig into this one).

Why would anyone want to reduce the total supply of tokens?

You know how the Fed keeps printing money? Making the value of each and every US Dollar worth just a tiny bit less with every dollar that gets printed?

This is like the opposite of that.

JUP already has a fixed supply (which is one step ahead of each and every fiat currency that exists today) but the idea here is to reduce the total fixed supply by 30%, ultimately making each JUP token worth a bit more.

But can you just do that? You can just change the ‘10’ to a ‘7’?

Well the proposal still has to go to a vote – and that vote is happening in July – but if it gets approved by the community (the JUP token holders who vote), then yes, with approval, the Jupiter team can change the total supply from 10B to 7B.

Just another cool concept, only in crypto.