# Supply Mechanism
The Proof of Trade protocol's mechanism for determining the supply of tokens is based on rolling daily volume, ensuring an optimal token supply for the protocol. This approach uses the **Minting Rate**, which governs the difficulty of minting new tokens and adjusts to daily volume. Thus, the Minting Rate rises as volume increases and falls as volume decreases. This relationship creates a natural balance between token supply and demand, ensuring that the token supply is not too high or too low, and also provides a counterbalance to any potential decline in trading activity.
Furthermore, this approach eliminates the need for a fixed token supply, instead allowing token supply to adjust following trading activity on the platform and soft-capping supply as the protocol approaches its goal of $1 billion in daily volume. This mechanism not only ensures an optimal token supply but also creates a natural support for trade volume.
{% hint style="info" %}
As volumes decline, traders are incentivized to mint DXBL tokens at increasingly favorable rates, rebalancing trading activity.
{% endhint %}
This method creates a self-reinforcing ecosystem where the token and protocol volume value are closely linked and mutually beneficial.
As the value of $DXBL tokens increase, it attracts more traders to the platform, leading to higher volume, a tighter token supply, and thus a higher NAV for the Community Vault. The higher the NAV increases the higher the value of the token. And the flywheel continues.
{% hint style="info" %}
If $DXBL's value ⬆️, the number of traders goes ⬆️, trading volume ⬆️, the outstanding $DXBL token supply ⬇️, leading to higher NAV ⬆️, increasing $DXBL's value.
{% endhint %}
The result is a sustainable and stable environment for trading, where all participants benefit from the growth and success of the protocol. Furthermore, the mechanism for capping token supply ensures that the protocol is protected from inflation, allowing for long-term growth and stability for all holders of $DXBL tokens.
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