Elon Musk said on Wednesday that Dogecoin's strange tokenomics actually work in favor of the meme coin, and a DOGE founder agrees.
The world's richest man and soon-to-be US government employee said on Twitter (aka X) that the cryptocurrency's inflationary model is a "feature, not a bug."
He was responding to a tweet by Dogecoin co-founder Billy Markus explaining to developers how to adjust the asset's tokenomics.
Unlike Bitcoin or Ethereum, Dogecoin—the sixth-largest cryptocurrency with a market capitalization of $56 billion—has an infinite supply cap of 10,000 new coins minted every minute. That's about $3,850. Since this is a fixed number of coins, the percentage it represents of the total supply decreases over time.
Markus is telling the Dogecoin community how to let other developers vote on changes to the coin's tokenomics. It's clearly a point of contention, as Markus added: "You can change it right there, create a pull request [and] convince the community and miners to use the new version. Now don't bother me about it."
But Tesla CEO Musk responded in support of the current feature, writing: “I think Dogecoin’s fixed inflation rate, meaning the inflation percentage decreases, is a feature, not a bug.”
Markus responded in agreement, saying he believes Dogecoin's model makes it "ideal for use as a currency."
Dogecoin inflation has been a hot topic in the past: Billionaire entrepreneur and crypto enthusiast Mark Cuban said in 2021 that the meme coin was initially useful as a payment method precisely because of its seemingly strange tokenomics.
“This is exactly why people will buy physical products with Dogecoin and not Bitcoin and rarely with Ethereum,” he wrote on Twitter at the time.
“It’s hard for someone with $100 to get excited about owning a fraction of Bitcoin or Ethereum,” Cuban added. “With Dogecoin, it’s easy. When it goes up, it makes those things easy to buy.”
Cuban is the former owner of the Dallas Mavericks, and the basketball team began accepting Dogecoin for tickets and merchandise in 2021 under his leadership.
Elon Musk has been a fan of Dogecoin since 2018, regularly pumping the cryptocurrency on the social media platform he now owns. The asset's developers exclusively told Decrypt in 2019 that they were working with Musk to turn it into a viable cryptocurrency for payments purposes.
It's worth noting that last month, Musk said that he is not actively involved in the cryptocurrency space, but only "kind of" likes Dogecoin because "it has dogs and memes, and I like all of that."
