Maximum Supply

Community Submission - Author: Anonymous
The maximum supply of a cryptocurrency refers to the maximum number of coins or tokens that will be ever created. This means that once the maximum supply is reached, there won鈥檛 be any new coins mined, minted or produced in any other way.
Normally, the maximum supply is capped by the limits defined by the underlying protocol of each digital asset. Therefore, the maximum supply and issuance of new coins are usually defined at the聽genesis block according to the project鈥檚 source code (which also defines many other features and functionalities).
Setting a steady issuance rate together with a predefined maximum supply can be valuable for controlling the inflation rate of a cryptocurrency, which may potentially lead to a long-term appreciation of the asset. Generally speaking, when the maximum supply is reached, there will be fewer coins available on the market. This is expected to create market scarcity, which may eventually lead to deflation conditions (or 0%聽inflation rates).
However, some cryptocurrencies do not have a predefined maximum supply, meaning they can be mined or minted continuously.聽Ethereum is a notable example of a cryptocurrency system that has no predetermined maximum supply. Ether鈥檚聽supply is constantly increasing as new blocks are generated.

Max supply vs. total supply

As mentioned, the calculation of max supply includes all coins that were already produced (or mined) plus the coins that are yet to be issued (in the future). On the other hand, the聽total supply includes only the coins that were already produced minus the units that were destroyed, for instance, in聽coin burn events.
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