# Deflationary NFT

By [Ethan J](https://paragraph.com/@ethanj) · 2021-11-29

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I have seen a couple of NFTs recently that are deflationary. These NFT holders can evolve 3 NFTs with certain traits into 1 NFT. Some examples are:

1.  [Tokenmon](https://www.tokenmon.com/) holders can [evolve Level 1 Tokenmon to Level 2 Tokenmon](https://discord.com/channels/839185006592786542/867066785185529856/882307419370299433)
    
2.  [SuperBunnies](https://super-bunnies.com/) holders can evolve 3 bunnies into 1 tiger
    

The thesis for such deflationary NFTs sounds reasonable in theory:

*   Level 2 NFTs may look amazing or are scarce in nature, thus causing people to evolve the NFTs
    
*   As more people want to evolve their NFTs, they will have to buy NFTs with certain traits, thus causing the NFT’s price to go higher
    
*   Then it’s a positive feedback loop from here
    

However, deflationary NFT will eventually have an issue with community. As more NFTs are burnt, say a project with 10K items are burnt down to 5K items, fewer people will be able to own one item. **Deflationary NFT will have a deflationary community**. Unless you can keep minting new NFTs by yourself. It is not clear yet how you combine minting with the current scheme.

In contrast, the [mutant apes approach](https://boredapeyachtclub.com/#/mayc) by the BAYC team seems smarter. Instead of having a deflationary NFT, you mint more NFTs with limited supply, thus expanding the existing community. The limited supply here is important, otherwise with unlimited supply you become the [OG cryptokitties](https://www.cryptokitties.co/) which is pretty much dead.

In summary, deflating or inflating an NFT will decide how the community grows. How the community grows is the root of an NFT project.

#NFT #crypto #deflationary #community

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*Originally published on [Ethan J](https://paragraph.com/@ethanj/deflationary-nft)*