Supply Ceiling

A supply ceiling is a hard limit on the total number of tokens that will ever exist in a protocol. This creates artificial scarcity, which is often used as a value accrual mechanism for investors.

By ensuring that the supply cannot be increased indefinitely, the protocol protects against the inflationary pressures of unlimited minting. This is a key feature of assets like Bitcoin, which has a 21 million supply cap.

When a project reaches its supply ceiling, the only way to increase the token's value is through increased demand or utility. This creates a predictable monetary policy that investors find attractive.

It is a foundational element of sound tokenomics design.