# Consensus Mechanism and Token Pricing with Respect to Token Inflation

Layer One X and its innovative Proof of Participation-based consensus mechanism provideThe an acceptance state of validation. When the participants are validators, they are a part of the same pool of the network. The resource utilized to achieve a consensus state can be directed towards an optimal resource utilized and incentive mechanism. When the incentive mechanism is optimal, the velocity of the token for rewards is optimal.

If there is an imbalance between the incentive and token velocity, the price of the token will incur more inflation. L1X has inflationary measures taken into account.

For example, FLOW tokens (the native currency of the Flow network) distribute the inflation to stakeholders and this results in a decrease in the value of the token. Evidently, the control of inflation must be done at the consensus mechanism stage.


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