Types of Inflation and How They Impact Cryptos Like CashFi (CFI), Bitcoin (BTC), and Polkadot (DOT)
Inflation is the rising prices of goods and services in an economy. There are three types of inflation. These are Demand-pull, Cost-push, and Built-in inflation. What makes cryptocurrencies so desirable is their resistance to inflation. This is due to there being a limited amount of digital currency to obtain in numerous cryptos. Bitcoin (BTC) has a 21 million coin limit while CashFi (CFI) has a 200 million coin limit. Polkadot (DOT) has no maximum supply so it is more susceptible to inflation.
Bitcoin (BTC) was the first cryptocurrency to be made. The crypto giant has made itself resilient to inflation by having a limited supply, unlike the US Dollar which has an unlimited supply. Due to the unlimited supply, the costs of various items can increase while the value of the currency stays the same.
Bitcoin (BTC) is liable to violent market swings but the general trend has always been positive. It has gone from virtually worthless to more than $20,000 per coin in 10 years. Bitcoin (BTC) also can’t be manipulated by governments adjusting interest rates, making it a viable alternative to investing money in real-world items.
Bitcoin (BTC) can become subject to inflation as more of it is mined. However, this is counteracted by the amount of Bitcoin (BTC) that can be mined every four years. The amount that can be mined every four years is reduced by 50%, meaning Bitcoin’s (BTC) inflation rate also decreases. Bitcoin’s (BTC) annual rate of inflation should not worry investors as its purchasing power continues to rise.
Similar to Bitcoin (BTC), Polkadot (POL) has become one of the most influential and biggest cryptocurrencies since its launch in 2020. The open-sourced blockchain platform has been labelled as an “Ethereum-killer” due to its security, scalability, and interoperability.
Polkadot (DOT) is an inflationary currency, unlike CashFi (CFI) which is deflationary. This means it has no maximum supply of DOT tokens. Although it is liable to inflation, the Polkadot (DOT) network has an interesting strategy to maintain the price of the token.
Polkadot (DOT) combats inflation through Parachain Auctions which have a deflationary effect. Various parachains are required to distribute several POL tokens which can lease space on the Polkadot (DOT) blockchain. Numerous interest rates and rewards are promised in return for users staking their tokens for at least 2 years. The total supply of DOT tokens is then lower, as a result, creating a deflationary effect, resisting inflation and maintaining a stable price.
CashFi (CFI) is set to launch on September 26th. It is a liquid staking DeFi platform that has access to different asset classes with its groundbreaking fee-sharing approach. The CFI token is built on the Ethereum (ETH) blockchain and gives investors several rewards and benefits like NFTs, governance of the CFI token, and staking.
CashFi (CFI), like Bitcoin (BTC), has a limited number of tokens available. This makes it somewhat resilient to inflation. The deflationary token will also benefit early investors as it will lead to more price appreciation after presales have concluded.
Sustainable passive income methods will also be created in the CashFi (CFI) ecosystem. These will include flexible liquidity staking. This will allow users to invest in other innovative features, such as CashFi Synths while their assets are locked in the liquidity pool. Discounts on NFTs are also available for CFI holders. Now is the time to invest in these new cryptocurrencies, unaffected by the current bear market and showing strong potential.
While Polkadot (POL) is liable to inflation, its numerous methods such as the Parachain Auction help keep it at a stable price. Bitcoin (BTC) and CashFi (CFI), however, both have a limited supply which keeps the coins somewhat stable. With a current high inflation rate for fiat currencies, digital currencies offer an alternative. While the economics of the crypto market is complex, there are features designed that may help it to resist inflation. Consider investing your money in newcomers like CashFi (CFI). This innovative platform puts the needs of the users first and promises numerous passive income tools so you never go home empty-handed.
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