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A drop in an economy's average level of pricing for goods and services.

Deflation typically follows a decrease in the amount of money in circulation in terms of macroeconomics. However, prices might drop for a variety of reasons, such as low economic output, technological advancements, or even decreased demand.


Within the web 3.0, deflation typically refers to the maximum supply of a cryptocurrency, such as Bitcoin. Only 21 million Bitcoins can ever be mined; at this point, no new coins or block rewards can ever be produced.

In fact, as private keys are lost and coins become unrecoverable, the amount of BTC in circulation will eventually decline. Numerous additional coins have a deflationary characteristic as well.

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