The secret of altcoins: how to distinguish between garbage and treasures
Characteristics of junk altcoins:
1. Continuous inflation and issuance: For example, currencies like doge have no upper limit on their issuance and will continue to increase, which may lead to inflation and value dilution.
2. High issuance but low circulation: The total issuance of such currencies may be large (for example, more than 10 billion), but only a small part of them are actually in circulation, and most of them are still held by the project party or the founding team, waiting to be released.
This situation will lead to oversupply in the market, high price volatility, and the release of a large number of tokens by the project party may affect market stability and investor interests.
Characteristics of excellent altcoins:
1. Deflation mechanism: Such currencies will adopt a deflation mechanism, such as charging a certain percentage of fees for each transaction to destroy tokens, thereby reducing the total supply and increasing the scarcity and value of each coin.
2. Full circulation: It means that all tokens of the currency have been issued and are not reserved for the project party or team, and all tokens are freely traded in the market. This structure usually enhances market transparency and investor trust.
Examples:
Trash altcoins:
- Doge (due to continuous inflation)
- Arb, Dym, Portal, Manta, Sei, Sui, etc. (large issuance but small circulation, most tokens are still controlled by the project party or team)
Excellent altcoins:
- BNB, Floki, SHIB (deflation mechanism, or clear total supply limit)
- Pepe, Bome, People, Not, WIF, etc. (full circulation, all tokens have been issued and freely traded in the market)
In summary, investors should consider their issuance and circulation mechanisms when choosing altcoins to avoid the risk of excessive inflation or unstable market supply.
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