In simple terms, deflation is when the supply of a token decreases over time. This can happen through a variety of different mechanisms, such as burns or buybacks, or in the case of xYSL a combination of both. One of the key benefits of deflationary supply is that tokens are steadily being removed from circulation, which reduces the available supply and increases the demand for remaining tokens. This will help to support the long-term value of the token. Simply put, as the supply of the token decreases, the demand for it will increase, leading to forced price appreciation.