Deflationary tokens are those whose supply decreases over time. According to Gresham’s law “bad money drives out good money.” So, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will gradually disappear from circulation. Good money is something that can’t be debased like Gold, silver, and Bitcoin. On the other hand, bad money can be easily debased or can be created very easily. E.g. – Nickel, Fiat, etc. This is the reason people spend their fiat currency while they save their gold and Bitcoin. In
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