Token supply is the amount of tokens that are in circulation or may be created for a particular digital asset.
Token supply typically falls into one of three main categories:
Total Supply: This refers to the total amount of coins or tokens that exist in a given moment. It includes both coins that are circulating in the public market and coins that have been held or not yet released by the developers or the blockchain project.
Circulating Supply: This is the number of tokens that are minted and liquid.
Max Supply: Maximum amount of tokens that can ever be emitted for a particular digital asset. Not all digital assets have a fixed max supply. For instance, there are 21M coins fixed supply for Bitcoin, while there is no limit for Ether tokens to be minted in the Ethereum blockchain.
Different token supply models have varying implications for the potential value and inflation rate of a digital asset. For instance, a digital asset with a limited max supply may see increased value as demand goes up because the supply cannot increase to meet this demand. On the other hand, an asset without a max supply may be more vulnerable to inflation, because more tokens can be created, potentially diluting the value of existing tokens.