10/17/2022 | Crypto News
Best Deflationary Cryptocurrency Projects to Buy in 2022
Deflationary cryptocurrencies have a total token supply that decreases over the course of time.
This means that in theory, the value of the cryptocurrency will increase as the supply is reduced, not least because the token becomes scarcer.
In this guide, we analyze the best deflationary cryptocurrency to consider investing in today.
The 10 Best Deflationary Cryptos to Invest in
After countless hours of market research, we found that the 10 best deflationary cryptocurrency assets are those listed below:
IMPT - Overall Best Deflationary Cryptocurrency to Invest in
Tamadoge - Newly Launched P2E Metaverse Gaming Ecosystem
Lucky Block - Undervalued NFT Competition Platform With Token Rewards
Bitcoin - Deflationary Cryptocurrency With a Cap of Just 21 Million BTC Tokens
BNB - Large-Cap Cryptocurrency With Frequent Token Burns
XRP - Interbank Payment Network That Automatically Burns Transaction Fees
Cronos - Proof of Authority Blockchain That Backs the Crypto.com Ecosystem
Shiba Inu - Meme Coin and Metaverse Project With a Deflationary Supply
PancakeSwap - Ongoing Burning Mechanism Reduces the Long-Term Supply of CAKE
Polygon - EIP-1559 Deployment Means That MATIC Fees are Burned
Analyzing the Best Deflationary Cryptocurrencies
It goes without saying that investors shouldn't look to gain exposure to a cryptocurrency just because it is deflationary.
On the contrary, in-depth research needs to be conducted into the future potential of the cryptocurrency, from an investment perspective.
To help clear the mist, we will now analyze the 10 best deflationary cryptocurrency assets in the market right now.
1. IMPT - Overall Best Deflationary Cryptocurrency to Invest in
IMPT caught our eye as the overall best deflationary crypto to buy. This project, as of writing, is currently offering its IMPT token in a presale launch at a discounted price - more on that shortly. IMPT is building a green ecosystem that could make it the most sustainable cryptocurrency in this space.
In a nutshell, IMPT enables consumers, businesses, and governmental organizations to offset their carbon emissions. This is achieved through the project's native token, IMPT. When buying IMPT, the tokens can be converted into carbon credits. Subsequently, the carbon credits are backed by an NFT on the Ethereum blockchain.
Those looking to gain exposure to the carbon credit trading markets - which continue to grow at an exponential pace, can hold onto their IMPT tokens for speculative purposes. The idea here is that if the price of carbon credits increases, so will the IMPT token. Therefore, IMPT enables investors to attempt to profit from rising carbon credit prices.
The other option that IMPT holders have is to burn their tokens. In doing so, this will directly offset the carbon emissions and thus - this makes IMPT the most energy-efficient cryptocurrency asset in the market. This is especially the case now that the project's underlying network - Ethereum, has finally completed its merge to a proof-of-stake crypto mechanism.
Additional features will be created by the IMPT team. This includes the opportunity to invest in carefully selected green projects from the comfort of home. Users will also be able to earn IMPT tokens by shopping online at a partnered brand. In turn, this offers yet another way to contribute to the environment.
Back to the presale - IMPT is offering its first allocation of tokens at a price of just $0.018. The second allocation of tokens will be sold at $0.023, which is 27% higher than those with access to the initial batch. Therefore, as is the case with most crypto presales, early investors will get the best entry price possible. The presale accepts both ETH and USDT. For more details about this exciting new crypto project investors can refer to the IMPT whitepaper as well as join the official Telegram group.
Buy IMPT Tokens Today
2. Tamadoge - Newly Launched P2E Metaverse Gaming Ecosystem
Next up on our list of the best deflationary cryptocurrency is Tamadoge. This play-to-earn game is still in its infancy, with Tamadoge recently completing one of the best crypto ICOs of 2022. The project's fundraising campaign generated sales of over $19 million, and early investors have already enjoyed unprecedented gains.
For instance, according to CoinMarketCap, TAMA was priced at just $0.021 when it was first listed on a public exchange for trading. Just a few days later, TAMA hit highs of nearly $0.20. This translates into growth of 10x, which is even more impressive considering that the crypto markets are still super-bearish.
Furthermore, those that invested in the TAMA presale would have witnessed even greater gains, as the first batch of tokens was heavily discounted. As of writing, TAMA has a market capitalization of just $35 million, which offers plenty of upside. The project is building an ecosystem that will support a virtual pet P2E game on the Ethereum blockchain.
Players will have their own pet to care for, which is backed by an NFT. Each pet has its own traits and characteristics, some rarer than others. Players will be able to earn TAMA tokens simply for entering their Tamadoge pets into battle. There are no geographical restrictions on who can play Tamadoge, as the project is inclusive.
In approximately 12 months, the team at Tamadoge is also aiming to launch their P2E gaming app for both iOS and Android. This will offer augmented reality experiences, where players can search the real world for TAMA tokens. Tamadoge is also launching its own NFT series, which will offer a wide variety of in-game perks and benefits.
To buy Tamadoge today, investors have a number of options. The easiest method is to use OKX, which supports deposits in the form of debit and credit cards. Those with ETH or USDT to hand can also buy TAMA via Uniswap. There are also rumors circulating that TAMA could be one of the next upcoming Binance listings. If this comes to fruition, this could have a major impact on this deflationary project.
3. Lucky Block - Undervalued NFT Competition Platform With Token Rewards
We also found that Lucky Block represents one of the best deflationary cryptocurrency projects in the market right now. Lucky Block has built an NFT competitions platform that operates alongside smart contracts and the blockchain ledger. Each competition is drawn randomly and transparently, which ensures that winners are selected fairly.
Some of the competitions and NFT giveaways currently being listed by Lucky Block include a Bored Ape Yacht Club NFT, a 5* holiday, a Lamborghini, and $1 million worth of BTC. Each competition has its own NFT collection attached to it. By purchasing an NFT, this offers access to the chosen Lucky Block competition. Moreover, the draw will be conducted once all respective NFTs have been sold.
To ensure that the project's mantra of 'Everyone's a Winner' is honored, all competition NFTs will attract lifetime rewards. This comes in the form of LBLOCK tokens from the project's competition pool. As such, rewards will be earned on this deflationary cryptocurrency for as long as the Lucky Block NFT is held in a private wallet.
In terms of its pricing action, LBLOCK was launched in January 2022. The presale campaign was hugely successful, with Lucky Block raising more than $5 million. The LBLOCK token was then listed on PancakeSwap for trading, going on to generate growth of 60x when compared to its presale price.
The crypto bear market has resulted in LBLOCK losing considerable value. This is the case even though a lot of project developments and exchange listings have been announced by the team. As of writing, LBLOCK tokens can be purchased at 90% below their former all-time high. Therefore, LBLOCK could be one of the best future cryptocurrency projects.
Do note that Lucky Block has since released two cross-chain versions of its LBLOCK token. The original V1 token follows the Binance Smart Chain standard and can be purchased at PancakeSwap. V1 follows the ERC-20 standard and is currently listed on Lbank, MEXC, and Gate.io. Lucky Block also engages in regular token burns, which ensures it remains deflationary.
4. Bitcoin - Deflationary Cryptocurrency With a Cap of Just 21 Million BTC Tokens
The de-facto digital asset of choice and global store of value - Bitcoin, is perhaps the best deflationary cryptocurrency to buy today. Founded in 2008 and launched in 2009, Bitcoin's pseudonymous developer - Satoshi Nakamoto, wanted to create a decentralized payment network that could compete and overtake traditional fiat money.
Today, Bitcoin is a multi-billion dollar asset class with more than 46 million holders in the US alone. One of the most attractive aspects of Bitcoin is that it is a deflationary asset with a limited supply of just 21 million tokens. This figure is expected to be reached in approximately 118 years. In the meantime, new Bitcoin tokens enter circulation on a 10-minute cycle.
Initially, 50 BTC tokens were added to the circulating supply every 10 minutes, but this has since been reduced to 25 BTC, 12.5 BTC, and as of writing, 6.25 BTC. The reason for this is that periodically, the Bitcoin mining reward is halved. As such, the next Bitcoin halving - which is expected to happen in 2024, will reduce the 10-minute mining reward to 3.125 BTC.
Crucially, Bitcoin is viewed as a store of value rather than a medium of exchange and it carries even greater hallmarks than gold. For instance, Bitcoin can easily be transferred and stored, in addition to being split into small units. Perhaps the greatest challenge for Bitcoin at this moment in time is its proof-of-work crypto mechanism, which is detrimental to the environment.
Nonetheless, considering that Bitcoin is still trading at an average of just $20,000, this is possible the best long-term cryptocurrency to buy. This represents a price discount of 70% from its previous high of over $68,000. As such, strong proponents of Bitcoin continue to buy into the project while prices remain low.
5. BNB - Large-Cap Cryptocurrency With Frequent Token Burns
BNB - formally branded as Binance Coin, is the native cryptocurrency of the world's large exchange. Launched in late 2017 at just over $0.10 per token, BNB is one of the best-performing cryptocurrencies of all time. Based on the all-time high it achieved in 2021, BNB has since increased in value by more than 6,000x.
Not only is BNB used by traders on the Binance exchange to reduce commissions by 25%, but it offers a wide range of other use cases. This includes the ability to earn interest via staking. Moreover, BNB serves as the native currency of the Binance Smart Chain. As such, any transactions taking place on the network are settled in BNB.
The total supply of BNB is 200 million tokens. However, this is a deflationary cryptocurrency in nature, not least because Binance regularly burns tokens that are in circulation. Just a few days prior to writing, for example, Binance executed its 21st token burn. To date, nearly 40 million BNB tokens have been burned - which amounts to almost 20% of the total supply.
Furthermore, and perhaps most importantly, the BNB token-burning program is self-sufficient. The reason for this is that Binance buys the respective tokens from the open marketplace using funds that have been raised from trading commissions. And, considering that Binance regularly attracts over $10 billion in daily trading volume, there is no reason to believe that its burning program will stop any time soon.
6. XRP - Interbank Payment Network That Automatically Burns Transaction Fees
XRP could also be considered the best deflationary cryptocurrency to invest in right now. This project has been operational since 2012, which makes it one of the most established cryptocurrencies in the space. XRP primarily serves banks and financial institutions through its innovative payment network technology.
The long-term objective of XRP is to replace the SWIFT network. XRP appeals to institutions that have a need to perform cross-border payments, not least because transactions take a matter of seconds to complete. Moreover, XRP can currently handle up to 1,500 transactions per second, irrespective of which currencies are being utilized in the transfer.
In terms of why this is a deflationary cryptocurrency, the XRP network automatically burns tokens associated with transaction fees. The standard transaction fee amounts to 0.00001 XRP which, although minute, could eventually translate into a sizable number of burned tokens - should its network be utilized by the global banking network.
Those considering an investment in XRP will be pleased to know that the digital currency is trading at a huge discount when compared to previous highs making it one of the most undervalued cryptos on the market right now. Compared to its all-time high of $3.84 - which is achieved in 2018, XRP is trading at an 87% discount. As of writing, XRP is trading 65% below its 52-week high of $1.35.
7. Cronos - Proof of Authority Blockchain That Backs the Crypto.com Ecosystem
Cronos is the digital currency that backs the Crypto.com ecosystem. It operates on a proof of authority consensus mechanism, which ensures that transactions are fast, scalable, and cost-effective. In a similar nature to Binance's BNB token, Cronos serves plenty of use cases. This includes offering traders of the Crypto.com exchange discounted trading fees.
Cronos holders can also take advantage of higher APYs when utilizing Crypto.com crypto interest accounts or lower APYs when borrowing funds. Cronos can also be used to fund the Crypto.com debit card, which enables users to spend their digital assets in the real world. The overarching reason why Cronos is deflationary is that Crypto.com regularly engages in token burning.
Many billions of Cronos tokens have been burned to date which many argue is reflected in the value of the cryptocurrency. For instance, CoinMarketCap notes that Cronos was originally trading at $0.02 when it hit public exchanges in 2018. The token hit an all-time high of just under $0.97 in 2021, representing growth of over 47x.
Buy Cronos Now
Your capital is at risk. Crypto asset investments are highly volatile and speculative.
8. Shiba Inu - Meme Coin and Metaverse Project With a Deflationary Supply
Shiba Inu was created in 2020 as a meme coin alternative to Dogecoin. The project - which was created by an anonymous developer, very quickly amassed a huge online following via its social channels. This resulted in Shiba Inu becoming the fastest-growing cryptocurrency of all time. Although initial pricing data remain sketchy, Shiba Inu has since grown by several million percentage points.
In fact, Shiba Inu is now a multi-billion dollar cryptocurrency and a top-15 project by market capitalization. Although the rise of Shiba Inu was largely built on speculation and FOMO, the project is looking to move away from its meme coin status. At the forefront of this is the project's development of its very own metaverse world.
The Shibaverse will be home to many thousands of virtual plots that can be purchased by SHIB token holders. Each plot will be backed by NFT that operates on the blockchain. It remains to be seen if Shiba Inu will become the best metaverse coin, or if the likes of Decentraland and the Sandbox will continue to lead the way in this space.
Nonetheless, when it comes to its deflationary crypto coins policies, Shiba Inu regularly burns tokens from its circulating supply. One such angle that the project is taking to fund its burning program is by utilizing 5% of any NFT sales to buy back tokens from the open marketplace.
Buy Shiba Inu Now
Your capital is at risk. Crypto asset investments are highly volatile and speculative.
9. PancakeSwap - Ongoing Burning Mechanism Reduces the Long-Term Supply of CAKE
PancakeSwap is the most popular decentralized exchange for the purpose of trading tokens that operate on the Binance Smart Chain. In the prior 30 days alone, PancakeSwap has been used by over 1.7 million. traders and more than $3.9 billion worth of crypto assets are locked in staking pools. Like most exchanges in this space, PancakeSwap has its own native token - CAKE.
There are several use cases that CAKE token holders have access to. This includes the ability to provide liquidity to PancakeSwap pools, which enables investors to earn a share of any trading commissions collected by the exchange. CAKE holders also have access to higher-yield farming APYs.
CAKE could also be viewed as an attractive addition to an investment portfolio considering how quickly the exchange has grown since launched in 2020. As of writing, CAKE carries a market capitalization of just over $650 million, so there is plenty of upside to target. Furthermore, investors might be attracted by the project's regular token-burning mechanism.
The objective outlined by PancakeSwap is to ensure that more tokens are being burned when compared to those entering circulation. This is an automated process based on many smart contract agreements. For instance, 10% of CAKE tokens utilized to buy lottery tickets on PancakSwap are subsequently burned.
10. Polygon - EIP-1559 Deployment Means That MATIC Fees are Burned
Polygon is a layer-2 scaling solution for the Ethereum blockchain. This means that developers can build decentralized applications via the Ethereum framework in a cost-effective and scalable way. Polygon has its own native cryptocurrency - MATIC, which now carries a multi-billion dollar market capitalization.
Since migrating to the EIP-1559 standard, Polygon is a deflationary digital asset. The reason for this is that when transaction fees are paid in MATIC, the tokens are subsequently burned from the circulating supply. Polygon has a total supply of 10 billion tokens and as of writing, MATIC is trading at a 72% discount from its 52-week high.
Buy Polygon Now
Your capital is at risk. Crypto asset investments are highly volatile and speculative.
What is Deflationary Crypto?
In a nutshell, deflationary cryptos are digital assets that have a decreasing supply. This means that over the course of time, fewer tokens will remain in circulation. This is in stark contrast to traditional fiat currencies like the US dollar and euro, which are inflationary.
The reason for this is that the Federal Reserve and European Central Bank regularly print new money, which subsequently enters the supply. As a result, fiat currencies consistently lose value as per the impact of inflation.
Deflationary cryptocurrencies, on the other hand, do the complete opposite. In theory - and assuming that the respective token retains its demand, the value of a deflationary cryptocurrency will rise over time.
This is because the cryptocurrency becomes scarcer, which can have the potential to increase its value as the supply is reduced. Some of the best deflationary cryptocurrency projects that we discussed on this page include IMPT, Tamadoge, and Bitcoin.
Why Invest in Deflationary Tokens?
Deflationary cryptocurrencies may appeal to long-term investors for a wide range of reasons - which we discuss in more detail in the sections below.
Inflationary Cryptocurrencies Diminish in Value
The easiest way to assess the benefits of investing in deflationary cryptocurrencies is to first understand the drawbacks of their inflationary counterparts.
As a prime example, Dogecoin is an inflationary cryptocurrency.
The reason for this is that Dogecoin increases the supply of its token by 10,000 DOGE for each block that is minted.
This translates into 5 million new Dogecoin tokens each and every year.
As a result, the true value of Dogecoin continues to decline as every year passes.
This is much the same as holding US dollars in a bank account. Considering the unprecedented inflation crisis currently facing global economies, cash continues to lose its value.
Supply Decreases Over Time
In contrast, the best deflationary tokens offer an attractive long-term outlook. Crucially, this is because the overall supply of the token will continue to decline.
As noted earlier, the likes of IMPT and Tamadoge operate deflationary policies, which means that tokens regularly leave the circulating supply.
IMPT, for example, enables investors to convert their digital tokens into carbon credit NFTs.
And, should the NFT holder wish to offset their carbon emissions, they can simply elect to burn their tokens.
This means that the subsequent IMPT tokens no longer remain in the circulating supply.
The theory is that if the supply of the token continues to decline and demand remains consistent, then the value of the cryptocurrency will increase.
This is much the same as a share buyback program initiated by publicly traded stocks.
When the company in question utilized free cash flow to buy back its own shares, this typically has the desired impact of artificially increasing the value of the stock.
Many Mechanisms to Reduce the Supply
The best deflationary cryptocurrency projects have many options when it comes to reducing the overall supply of their token.
One of the main ways that projects reduce their token supply is through regular token burns.
Lucky Block, for example, has installed a program that will burn 1% of the total supply, each and every month.
The tokens are sent to a 'burn wallet' that cannot be accessed under any circumstances, which essentially removes them from the supply.
Some cryptocurrency projects will utilize funds raised from their respective products and services to buy back the token from the open marketplace. As noted above, this is much the same as a traditional stock buyback program.
This system is utilized by Binance, which buys BNB back from the market with the fees it collects from trading commissions.
Another method that the best deflationary cryptocurrency projects utilize to reduce the supply of their token is to burn transaction fees.
This means that when the sender pays for a transaction in the native cryptocurrency, the tokens leave the circulating supply.
This method is utilized by the likes of Polygon and XRP.
In summary, deflationary cryptocurrencies appeal to investors largely because the overall supply of tokens will reduce over time.
Assuming that demand for the token remains intact, the theory is that deflationary cryptocurrencies will continue to increase in value as the supply declines.
In addition to Tamadoge, Bitcoin, and BNB, we found that the best deflationary token to explore further is IMPT.
This project - which is building a carbon credit offset and trading ecosystem, is currently offerings its IMPT token at presale prices.
By investing right now, the lowest token price possible of $0.018 can be obtained - before it increases to $0.023 in the next stage of the presale.
Invest in IMPT Today
What is deflationary cryptocurrency?
Deflationary cryptocurrencies are those that over the course of time, will see their circulating supply decrease. In turn, if demand for the token increases, this can have the desired impact of increasing the cryptocurrency's value. After all, if there are fewer tokens available in the market and demand is on the up, naturally, its value will rise.
What cryptocurrencies are deflationary?
Examples of deflationary cryptocurrencies include Bitcoin, BNB, XRP, Shiba Inu, and Polygon. Newer deflationary projects worth a look at include IMPT and Tamadoge. Each of the aforementioned projects has its own deflationary mechanisms in place, such as token burns and buyback programs.
Is a deflationary crypto good?
On the one hand, buying a cryptocurrency that is deflationary will not necessarily result in greater gains when compared to inflationary alternatives. For instance, although Ethereum was inflationary for seven years before its recent PoS merge, it still remained the second-largest cryptocurrency by market capitalization. However, holding deflationary cryptocurrencies like Bitcoin, IMPT, and Tamadoge is likely a better strategy in the long run. After all, investors do not need to worry about the risk of inflation.
What is the best deflationary cryptocurrency?
Overall, we found that IMPT could be the best deflationary cryptocurrency to consider buying. It is building a much-needed primary and secondary platform that will enable investors and businesses to offset their carbon emissions. IMPT holders can convert their tokens into a carbon credit NFT, which can then be sold on the secondary market. Otherwise, holders can burn their tokens to offset their carbon footprint.
Is Ethereum deflationary?
Prior to its recent transition to proof-of-stake, Ethereum was an inflationary cryptocurrency. This is because each year, new tokens entered circulation. However, since the merge, Ethereum is now a deflationary cryptocurrency. In addition to its solid smart contract ecosystem, this makes Ethereum even more attractive.
Is Bitcoin deflationary?
Put simply, yes - Bitcoin is deflationary. The world's largest cryptocurrency by market capitalization releases new BTC tokens into circulation every 10 minutes. This will continue to be the case until Bitcoin reaches a total supply of 21 million. At this point, no additional BTC tokens will ever enter circulation.