What is Mudflation?
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Mudflation is an economic issue that exists only in massively multiplayer online games. Mudflation occurs when a more recently acquired or introduced item makes an existing item lose significant value. This is most common when a game releases a new expansion, as expansions tend to have better items.
The problem it seems was Blizzard was afraid of Mudflation. They didn't fully understand that it was going to happen regardless so they made instances with blues that were still less then MC gear
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