Emission

What does emission mean?

Emission refers to the rate of creation and release of cryptocurrencies. This can be through the mining process, or as a result of an ICO or airdrop.

The emission rate is dependent on the economic model of the cryptocurrency, specifically whether it is inflationary or deflationary.

In many cases the developers will place a cap on emission, ensuring that the coin becomes deflationary after reaching that cap, whether through burning tokens, or through physical loss. When a cap is put on a cryptocurrency like this it is known as the maximum supply.

Just because a cap is a possibility doesn’t mean it is always employed. Some cryptocurrencies have an infinite emission model, meaning that there is no cap, and that coins will continue being created forever, albeit typically at a very low emission rate.

Any currency that continues with infinite emission is inherently inflationary, due to the fact that the value of an individual unit of currency should continue to drop over time as the supply of coins increases.

Emission rates are not a proxy for the quality of a cryptocurrency, however from a speculative perspective it is a concept you should be familiar with, due to the possibility of portfolio dilution over time.