Inflation. All of us take care of it, however few of us perceive simply how damaging it’s to our funds, or the way it erodes the buying energy of our cash over time.

With the US greenback (USD) shedding greater than 90% of its buying energy within the final century, and lots of fiat currencies affected by runaway inflation resulting from insufficient financial insurance policies, cryptocurrencies have been usually considered a possible resolution to the inflation downside.

However as we’ll quickly see, some cryptocurrencies go additional than others in relation to presenting a viable resolution to present financial challenges.

Bitcoin

The OG of the cryptocurrency world, Bitcoin was the primary digital asset to be constructed on prime of a decentralized blockchain ledger. It’s additionally one of many first currencies, interval, that may be thought of ‘anti-inflationary — since its inflation price progressively reduces with time.

Not like many cryptocurrencies, which have primarily infinite most provide, there’ll by no means be greater than 21 million bitcoins in existence.

On prime of this, it additionally has a progressively lowering inflation price, because the quantity of Bitcoin minted with every new block halves each 210,000 blocks — or roughly each 4 years.

That is in stark distinction to many common currencies, which have an ever-expanding circulating provide — a problem that’s identified to trigger buying energy decline, i.e. that means you should purchase fewer items and companies with the identical sum of money over time.

This progressively lowering emission price is hardcoded into the Bitcoin protocol and ensures that customers can all the time make sure that there’ll by no means be any sudden will increase in provide — usually often known as a ‘provide shock’. This isn’t the case with fiat currencies, which may be merely printed as and when deemed crucial by the central financial institution.

With Bitcoin, the world was launched to the idea of forex designed for the lots, fairly than for the massive firms, who truly profit from inflation because of the discount impact it has on their low-interest money owed.

Prophecy

You might have already heard of Prophecy due to its massively well-liked yield farming characteristic, often known as Prophet Swimming pools.

However what you won’t know is that Prophecy can be on a path to disrupt the best way we take into consideration cash by creating a completely unique crypto-economic mannequin with a number of distinctive financial insurance policies aimed toward balancing provide with demand.

On the core of Prophecy’s financial mannequin is a burning course of, which sees PRY tokens burned each chronically and periodically primarily based on a wide range of parameters associated to community exercise and demand — serving to to cut back the circulating provide and counter pointless inflation.

It additionally introduces an unique consensus mechanism often known as Proof of Dedicated Decay (PoCD), which is used to ascertain an financial coverage that favors the bulk fairly than the few.

It makes use of a wide range of information sources, such because the staking price of every epoch, open market curiosity, obtainable liquidity and quantity, and extra to find out the financial properties of the Prophecy community.

Not like common cash, the PRY token is designed to empower the person and preserve or enhance its worth over time by way of a contracting provide and reactive financial insurance policies. The result’s a sound financial unit, the PRY token, which is match to energy the monetary panorama of the long run.

The BOMB Experiment

Extra of an experiment than an precise try at a viable forex, the BOMB token is arguably essentially the most aggressively deflationary cryptocurrency there may be.

The idea behind BOMB is straightforward. At genesis, there was precisely 1 million BOMB in existence. Nonetheless, with every BOMB switch, precisely 1% of the variety of BOMB despatched are burned, completely eradicating them from circulation. Consequently, a 100 BOMB switch would depart 99 BOMB in circulation.

As you may think, relying on how briskly BOMB are transferred, this may result in a dramatic discount within the provide over time. As of April 2021, 9% of the utmost provide has already been burned, leaving simply 910,000 BOMB in existence.

Now, not like Bitcoin and Prophecy, BOMB isn’t designed to develop into a transactional unit. As an alternative, it merely goals to offer a hedge towards financial inflation.

As a result of its distinctive properties, BOMB isn’t instantly suitable with most main DeFi functions — regardless of being constructed on Ethereum. Nonetheless, customers can wrap their BOMB to a separate token often known as Wrapped BOMB (WBOMB) to make use of it exterior the BOMB dApp ecosystem.

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