Unit 1 · Level 4 · Token design
Where coins come from
Every token has a monetary policy written in code. Bitcoin caps supply at 21 million, forever. Dogecoin mints roughly 5 billion new coins every year, forever. And since 2021, Ethereum burns a slice of every transaction fee, destroying ETH as people use the network. One word, 'crypto', covering three completely different supply stories.
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What you get asked
Bitcoin's code caps supply at 21 million coins. What does that hard cap actually guarantee?
A hard cap guarantees supply, never price. Scarcity only matters if demand shows up, and that part is never written in code.
Every ~4 years, the number of new BTC minted per block is cut in half, an event called the ___.
Block rewards started at 50 BTC in 2009 and have halved every ~4 years, down to 3.125 BTC after the April 2024 halving.
Dogecoin issues roughly 5 billion new coins a year, forever. What does that mean for a long-term holder?
Steady issuance dilutes every holder a little each year. It isn't automatically fatal, but you're swimming against a current.
Match the supply mechanism to what it does
Supply design is the first page of any token's story. It tells you whether time is quietly diluting you.
BNB and ETH both burn tokens. What's the honest reason a project burns supply?
Burns shrink supply, but scarcity is only half the equation. Demand decides the rest. A burn is a lever, not a promise. 🐜
The rest of this unit
Supply schedules, emissions, and the fine print that decides who gets paid.