An Elastic Supply Token is a type of cryptocurrency that adjusts its supply in response to market demand. This mechanism aims to stabilize the token’s price over time.When the token’s price rises above a certain threshold, the supply increases. New tokens get minted and distributed to holders, effectively lowering the price. Conversely, if the price falls below a set point, the supply contracts. Tokens are removed from circulation, often through a buyback process or burning, which can help boost the price.This dynamic supply adjustment allows Elastic Supply Tokens to respond to changing market conditions, reducing extreme volatility. However, it can also lead to challenges, such as unpredictable price movements and complexity in understanding the token’s behavior.Investors should carefully consider these aspects when engaging with Elastic Supply Tokens, as the mechanisms governing supply and demand can significantly impact their holdings.