The Vibe: When a crypto’s supply gets smaller over time, making each coin potentially more valuable.
The Details: Deflation happens when tokens are permanently removed from circulation—usually through burning (sending to a dead address). If demand stays the same or grows while supply shrinks, the price per coin tends to go up. Bitcoin is mildly deflationary (lost coins never come back, and new supply slows every 4 years). Some tokens are strongly deflationary with built-in burns on every trade. It’s the opposite of inflation, where new coins flood the market.
Pro Tip: Look for real on-chain burns in the tokenomics—hype about “deflationary” means nothing if they don’t actually burn. Deflation can help long-term holders but doesn’t guarantee price goes up.