Recently, the co-founder of Dogecoin (DOGE), Billy Markus, revealed how the popular meme coin could become a deflationary model.
On GitHub, he shared the details and gave any party interested in proposing changes to the DOGE code, letting the people of Dogecoin decide.
However, Markus pointed out that this deflationary shift could only occur if a community consensus and miners’ support were achieved.
Dogecoin Deflation Possible with Community Support
Markus clarified that Dogecoin’s current inflation rate is intentional and a feature of the coin’s design, and 5 billion DOGE is added annually through mining.
Having already issued this steady stream of Dogecoin, some critics have argued that the “infinite supply” means the currency cannot grow in value in the long run.
Markus has shared the GitHub code of the deflationary option, which he believes would be good enough for the community to decide whether an economic model like this is a preference.
Dogecoin’s supply is currently 146.78 billion DOGE, growing by 5 billion annually. While this may sound inflationary, Markus said the actual inflation rate decreases in inverse proportion to the coin’s growing supply.
The community will need to support the proposed changes to adopt a deflationary model if Dogecoin is to adopt one.
Markus Compares Dogecoin and Bitcoin Flexibility
Markus defended Dogecoin’s inflationary design by comparing the two with the idea that Bitcoin, too, follows a community design.
He pointed out that DOGE and BTC are theoretically flexible and could adjust both supplies in response to community decisions.
Markus said Bitcoin’s capped supply of 21 million coins is known but nodded to the idea that it could be different if the community and miners agreed.
However, Markus noted that Bitcoin’s supply cap is not expected to be altered before 2140 when the last coin is supposed to be mined.
Dogecoin’s inflation model, however, has the miner’s earners steadily rewarded, thereby encouraging continued community engagement.
This model, according to Markus, positions DOGE better than Bitcoin as a currency—Bitcoin as a store of value.
Elon Musk Backs Dogecoin’s Predictable Inflation
Markus’s posts drew a sympathetic ear from a well-known Dogecoin supporter, Elon Musk, who agreed that meme coins’ inflation is good for them.
According to Musk, Dogecoin has its ‘flat inflation’ decreasing percentage-based inflation over time.
Previously, Musk has shown interest in the future of Dogecoin, with these latest comments reiterating his support for Dogecoin’s predictable inflation model.
Musk echoed Markus, saying Dogecoin’s inflation is appropriate for a practical currency. He noted that Dogecoin’s inflation rate is set, unlike traditional fiat currencies like the U.S. dollar, which would see unpredictable spikes in inflation. Markus said,
“The reliance on an inflationary fiat currency with varying prices undermines its reliability as a transaction option.”
He added that Dogecoin is more suitable for everyday use than fiat.
DOGE vs. Dollar: A Stable Inflation Rate
Markus notes that Dogecoin’s inflation is much more predictable. Comparing Dogecoin’s inflation to the dollar speaks of DOGE’s steady and predictable supply expansion.
He sees that as a key advantage compared to fiat currencies, which central banks can adjust as they please on an economic footing.
Markus said that Dogecoin’s fixed issuance rate could allow it to be a stable currency for everyday transactions.
Dogecoin’s inflation may be stable enough to attract users who want a stable currency for everyday activities.
It differs from the dollar and other currencies as it undergoes no inflation adjustments, and the issuance remains fixed, making it an exciting option for an inflationary-conscious user.
He underscored that DOGE’s inflation rate will further decrease with increased supply, pointing to the stability that this will bring.
Markus says that, ultimately, when it comes to Dogecoin, the community will decide whether to use a future inflationary or deflationary model.
He has released the deflationary code on GitHub, and if the community agrees, DOGE can run it on this model.
Like any open-source project, any user with the necessary coding skills might propose a change to Dogecoin.
