What does a “deflationary token model” even mean? No, seriously🧐

People love throwing this term around, but let’s rewind for a second. Inflation simply means an increase in something. Even physicists don’t say the universe is “expanding” anymore. They say it’s experiencing inflation.

In web2 economics, inflation usually refers to rising prices. It feels like prices go up because of inflation… but in reality they rise because the money supply expands, which devalues the currency.

There’s a simple equation for this: MV = PY

It shows the balance between all goods produced and all money circulating in the system. If you have 100 units of money and 100 units worth of goods, that’s your base. If money supply grows to 110 while goods stay at 100, you get roughly 10% inflation. Producers raise prices because demand increases and supply doesn’t. And the opposite works too.

Now jump into crypto.

❓Most people don’t understand what deflation means, because no one answers a basic question: What is a token? A currency or a product?

And deflation works very differently depending on which one it is. It often feels like burning tokens should make them more valuable. But think about this: the world burns oil every single day… and its price still falls.

So what does deflation really mean in web3?🤨

Christmas is the season of wishes 🎄

So here are a few warm ones from us:

✨ May you always have people around who truly believe in your ideas and support you in every new beginning.
🌟 May these holiday days add a little more warmth and meaning to everything you’re building.
⚡️And may the market bring you a few pleasant surprises, Bitcoin included 😉

Web3 lives thanks to the people who believe in it.

❤️ And we’re grateful to be shaping this space with you.

Merry Christmas! And let today give you a small, bright moment that lasts 🎁

🔍 Let’s keep going with deflation and look at one simple case: your token acts like a product.

If that’s true, inflation works in your favor. When inflation rises, goods get more expensive, and your token follows the same pattern.

Here’s how it's supposed to work:
🔹people buy your token with USDT
🔹the more USDT shows up in the network, the higher its inflation
🔹the higher the inflation, the higher the price you can sell your token for

Just look at the logic: more USDT in the network means more liquidity, and that liquidity should, in theory, push demand toward your token. And in that setup you can raise the price and still expect a buyer.

But reality cuts in fast.

That USDT gets diluted across millions of tokens long before it reaches yours. And this leads to the key takeaway:

when a token behaves like a product, what matters isn't inflation or deflation. It’s demand. Because no demand means no price. End of story.

BlackRock vs the U.S. Department of Justice. Who ends up being the largest BTC holder by 2026? 🤨

▪️ BlackRock holds 776,940 BTC
Those coins come through ETFs and move with institutional demand. Long money, growing alongside Bitcoin’s adoption by large players.

🇺🇸 The U.S. Department of Justice holds 127,271 BTC
Not bought but confiscated. Historically, the U.S. doesn’t accumulate Bitcoin. It takes it from offenders. More of a rainy day reserve than a strategy.

At the end of the day, this is about strategy, not numbers. Institutions buy. Governments usually confiscate.

But the rules aren’t fixed. Regulation can shift, strategic reserves can appear, new players step in. And geopolitics always finds a way in.

🚨Trust Wallet is temporarily unsafe

A new update went live on Dec 26, 2025. Unfortunately, it shipped with a vulnerability.

In the past 24 hours, over $7M was stolen from EVM wallets. Only users of the Trust Wallet browser extension were affected.

CZ has already said all losses will be covered. But still, better to play it safe and take a few simple steps.

What we’d do right now:

🔺 Disable or remove the Trust Wallet extension from Chrome and any other browsers.
🔺 If something feels off, move your funds to a hardware wallet.
🔺 Revoke active approvals via revoke.cash.
🔺 Save logs and screenshots in case you need them for reimbursement.

⚠️ Stay alert. Attacks like this don’t always stop at one round.

Last time, we looked at a token as a product. Now let’s switch roles and see what changes when a token acts as a currency 💱

Here, the mechanics are pretty straightforward. The more currency there is in circulation, the less each unit is worth.

Here’s how it usually plays out 👇

🔹Your token gets used to buy tokens from other projects (say, VIRTUAL)
🔹You distribute, mint, or unlock a new batch of tokens
🔹Users end up holding more of your tokens and start spending them on other assets
🔹Those projects may see higher demand and decide to raise the price of their tokens
🔹Meanwhile, your token starts losing value

In this kind of setup, the main thing to avoid is inflating your supply. That’s where token burning comes in as a deflationary mechanism.

But there’s a catch.

Burning tokens that sit in a Treasury or any other closed pool doesn’t move the price. The reason is simple. You need to burn the tokens that are already in circulation.

❗️And that’s where everything comes together:

if your token is a currency, it has to be taken out of circulation in every possible way. But even that won’t help if the same product can be bought through an alternative route. For example, directly with USDT.

⚙️ Uniswap has decided to rethink its token economics and move toward a deflationary model

On December 25, the Uniswap community completed its vote on the UNIfication proposal. Holders of more than 125 million UNI (99.9%) supported it. This is one of the most significant changes to the protocol’s economic model in its entire history.

So what changed?

On December 28, 100 million UNI (≈ $596 million) were burned and permanently removed from circulation. Here’s what followed👇

▪️ Circulating supply dropped to around 730 million UNI.
▪️ Uniswap Labs fees across the interface, wallet, and API were set to zero.
▪️ The fee switch was activated, meaning part of protocol fees now goes not only to liquidity providers, but also toward UNI buybacks and burns.
▪️ 20 million UNI were allocated to ecosystem development and developer support.

📌 Why does this matter?

For years, growing activity on Uniswap barely affected the token itself. Liquidity providers earned, but UNI didn’t capture that growth. Now the model is shifting. Higher trading volumes lead to more UNI being burned. Supply goes down, and token value starts to reflect real usage.

In effect, Uniswap is moving toward a model where protocol usage is directly tied to token economics. For UNI holders, this could be the long-awaited fundamental update.

This year wasn’t something we went through alone ✨

We shared it with our clients, our partners, and everyone who cares about Web3. What made 2025 special wasn’t just the work itself, but the people around it ❤️

The trust, the support, the conversations, the feedback – all of that pushed us forward and shaped what we built this year.

Here’s a snapshot of what we’ve been up to:

▪️ welcomed 11 new people to the team
▪️ ran 15 tokenomics audits for leading Web3 projects
▪️ designed 3 token circulation mechanisms that didn’t exist on the market before
▪️ showed up at Blockchain Life in Moscow
▪️ and at Token2049 in Singapore
▪️ launched a new website and completed a full rebrand
▪️ expanded our product lineup
▪️ grew our partner network by 87 companies
▪️ took part in dozens of industry events
▪️ identified some of the market’s biggest pain points and built solutions for them

And we’re far from done. In 2026, we’re preparing something genuinely big 🚀

The first announcement of what we’re building for Web3 will happen at Blockchain Life in Moscow, April 14-15.

Until then, thank you for being part of this journey with us ❤️‍🔥

Wishing you a Happy New Year! 🎄🎄

🔴 The New Year is one of those rare moments when you can pause and finally take a breath.

No need to analyze, plan, or optimize anything. Just take a second to notice how far you’ve come ✨

This year had its ups and downs. But above all, it was full.

Wishing you a year ahead filled with inspiration, strong ideas, and work you’ll feel proud of.

More wins – big and small 🏆🥇

And more moments that make you think, “Yeah, this was worth it” ❤️

Here’s to everything beautiful and exciting the New Year has in store for us! 🎉