Will Dogecoin Ever Be Capped So That It Can Moon?

Published: September 22, 2023 | Last Updated: May 5, 2023

Markos Koemtzopoulos

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

OK hear this. When Jackson Palmer and Billy Markus set out to create Dogecoin they initially planned to implement a hard cap on the total supply of DOGE. Dogecoin was a fork of Litecoin which itself is a fork of Bitcoin which has a fixed supply cap of 21 million BTC. Dogecoin’s founders intended the same for DOGE. However, according to Galaxy Digital Holdings, a bug in the code caused the supply cap to be unspecified. The community of developers working on Dogecoin decided to roll with that and the rest is history.

will dogecoin ever be capped

Is Dogecoin’s supply limited?

The supply of DOGE inflates by 5.26Bn per year. So no it is not limited. But the rate of inflation drops every year.

Because you are dividing 5.25Bn by a larger base every year – get it?

For example, the current circulating supply of DOGE is 138Bn.

So today the inflation is 5.2/138Bn=3.6%. In 24 years when supply has doubled then inflation will be 5.2/276Bn = 2%.

Hence, the supply of Dogecoin increases over time but is predictable and less significant over time.

At some point in the distant future, Dogecoin will be inflating at a rate that is almost 0. It will never be 0 but it will be something like 0.000000001%. Of course, more than 100,000 years have to pass for that to happen.

Most of us will be retired within 50 years. In 50 years there will be 401Bn DOGE in circulation and the inflation rate will still be 1.31%.

So yeah, DOGE’s supply is unlimited.

Dogecoin’s supply growth schedule

chart showing DOGE's supply growth

When Dogecoin launched, it announced a total supply of 100Bn coins which was the largest amount of coins ever to be minted on a blockchain. In my opinion, this clever feature is what made Dogecoin look extremely affordable.

Why does Dogecoin inflate its supply?

The primary reason for printing new DOGE is to reward miners. The whole point of a blockchain is that anyone can become a miner to verify and confirm transactions. In return for doing this miners are rewarded with more Dogecoin.

Bitcoin does the same. The only difference is that Bitcoin does not have an unlimited supply. The Bitcoin network will cease printing newly minted coins by 2140 after which it plans to reward miners with transaction fees.

Dogecoin does not want to do this because this would cause its blockchain to process transactions slower. So, it argues, it needs to continue to raise supply. On Dogecoin’s website, they describe why they don’t think that printing new Dogecoin is an issue.

I don’t fully follow their logic as printing any amount of coins is dilutive to holders.

But isn’t the US dollar inflationary as well?

Yeah, sure the US dollar is inflationary.

But that is only one part of the story.

Because, historically, you’ve been able to find other places to park your dollars to earn a higher return than inflation, namely treasury bills.

This is also true of coins that you can stake. For example, ETH inflates at 0.52% per year but you can stake it to earn 4% per year.

Dogecoin doesn’t have that. If you hold DOGE you are guaranteed that its value will dilute no matter what.

Are there plans to cap the supply of DOGE?

While there was a discussion in 2021 on Dogecoin’s GitHub page about DOGE being capped, it was closed as no specific proposal was put forward. Community proposals for blockchains have to be specific so people can vote on the particulars. This was more like a Reddit discussion. In fact, it was eventually moved to Reddit.

It’s a long discussion so I have summarized the main opinions that are in favor of and against having a supply cap on Dogecoin

Arguments in favor of having a cap on Dogecoin

The primary reason for having a hard or soft cap on Dogecoin is that it will make DOGE less dilutive. While the price of Dogecoin has fluctuated wildly it is hard to argue that inflation is non-dilutive. No matter how you twist or turn things, adding more DOGE to existing DOGE dilutes its value over the long term.

Other supplementary arguments I have come across are the following

  • The original plan of Dogecoin was to have a cap.
  • For any currency to be viable it needs to be a store of value. Printing more DOGE without a way to compensate like T bills makes it a bad store of value. That’s why gold and the US dollar are still considered money and seashells aren’t.
  • If Dogecoin users perceive the main audience of Dogecoin to be spenders then capping supply will appeal to investors.
  • Dogecoin is many people’s first point of entry to crypto. If they lose a lot of money with dilutive crypto like DOGE they may become disillusioned with crypto overall.

Arguments against having a cap on Dogecoin

The main argument against having a cap on DOGE supply is that the whole blockchain would break down if miners weren’t rewarded. How would you keep the network secure if you can’t reward miners with new tokens?

Here are some supplementary arguments:

  • Dogecoin has done fine for itself without being capped from the beginning. It doesn’t matter that it inflates because it’s the coin of the people. After all, in our lifetimes all coins will inflate. Dogecoin already has a strong community and momentum despite it being inflationary.
  • Dogecoin’s main aim is to become a currency you can spend, not a value store. Dogecoin’s value will increase as it becomes more useful as a currency and payment option. Providers such as BitPay and crypto exchanges such as Coinbase are already integrating DOGE payments into their solutions.
  • The current inflation rate is low and will only drop over time.
  • The price fluctuation of DOGE in the past is in no way correlated to inflation.
  • In theory, there are workarounds to make Bitcoin uncapped, so it’s all a matter of perception.
  • If Dogecoin is to become the currency of the people then 138Bn is a small number. The world simply needs more DOGE.
  • In practice, many coins will get lost over time, equivalent to reducing supply.
  • Dogecoin is principled. It is not good to mess around with its parameters. It is what it is. We are not going to change parameters like other blockchains have.

Hard Cap vs Soft Cap

There are some in the Dogecoin community who argue that rather than a hard cap on supply, there ought to be a soft cap.

A soft cap is a suggested limit on the maximum number of Dogecoins that should be in circulation. It’s not a fixed number, and there is no guarantee that the supply will not exceed this limit. It is more of a guideline that is set by the developers or the community to help manage the inflation rate of Dogecoin.

On the other hand, a hard cap is a fixed limit on the maximum number of coins that can ever exist. Once this limit is reached, no more coins can be created, and the supply is considered fixed. Bitcoin is an example of a cryptocurrency that has a hard cap. The total supply of Bitcoin is limited to 21 million coins.

1. Doge community

One of the main reasons DOGE is so popular it its culture and community. DOGE didn’t have any VC backing and it didn’t have a massive ICO. In contrast, it is a grass-roots project that took 3 years to get off the ground. What started off as a joke coin has become the coin of the people built around a culture of doing good. Doge holders have mustered around many community causes such as raising money to the Jamaican Bobsled team to join the Olympics. They have even declared the 4th of April, which is the national holiday for marijuana fans, to be Doge day.

Most DOGE holders are thought to be retail investors. After all, the largest DOGE address is that of Robinhood, a crypto brokerage that appeals the Gen-Z.

2. Elon Musk

A second driving force bolstering DOGE’s price is Tesla CEO Elon Musk.

Musk’s tweets heavily influence whether DOGE will pump or not. Musk’s continuous tweets in favor of DOGE and his appearance Saturday Night Live where he promoted DOGE are thought to have contributed to DOGE reaching an all-time high of 0.74 cents in 2021.

DOGE’s market capitalization was an astronomical $84.54Bn.

Today, its total market cap is just under 13Bn so there still is a way to go to get back to its peak price.

Dogecoin’s price action continues to be very dependent on what Elon Musk says or does. Most recently the price of DOGE jumped 30% after Elon replaced the bird logo on Twitter with that of the Shiba Inu DOGE logo.

3. People made money

A third reason is that some people many a lot of money. Early adopters made very good returns as dogecoin’s price has seen some of the biggest during the cryptocurrency market bull run of 2021. This prompted many in the crypto community to reconsider their contempt for the coin or to just FOMO into buying it.

ROI in DOGE per year.

ROI Dogecoin

Year Price (April) No of Dogecoins for $1,000 Profit today, had you invested $1000
2023 $0.09 11,418 $0
2022 $0.14 7,128 -$376
2021 $0.05 18,638 $632
2020 $0.00 551,876 $47,333
2019 $0.00 480,307 $41,065
2018 $0.00 354,862 $30,079
2017 $0.00 41,666,667 $3,648,167

Those early birds make a lot of profit but that train has long departed.

Dogecoin supply growth process

The Doge network rewards miners with 10,000 DOGE every time they add a new block to the Dogecoin blockchain. Given that the block time is one minute this means 1,440 blocks per day which equals 525,600 blocks per year. Hence, Dogecoin inflates at 5,256,000,000 DOGE per year.

Dogecoin price prediction

What would it take for Dogecoin to moon?

Capping supply is only one factor amongst many that would make me more bullish on Dogecoin. Placing a ceiling on the total number of dogecoin would increase the digital currency’s perceived value. I would expect the market to react positively if that were to happen.

However, Dogecoin’s developers don’t seem keen on exploring such a solution in the short term. Here are some other things to watch out for

1. Transitioning to proof-of-stake.

Another surprising proponent of Dogecoin is Vitalik Buterin the creator of Ethereum. If you are a reader of Elementalcrypto you will surely know that Ethereum has transitioned from a Proof-of-Work blockchain to a Proof-of-Stake consensus mechanism.

This means two things.

Firstly DOGE will consume less energy massively reducing its environmental footprint.

And secondly, people would be able to stake DOGE to earn a return.

2. Increasing the number of nodes.

Dogecoin is often criticized for having too few nodes participating in the network that secures it. Adding more nodes would weaken the naysayers’ argument that DOGE is destined to fail.

3. Becoming more widely accepted as a payment method.

There are already a bunch of companies hoping to appeal to Gen-Z customers by offering DOGE as a payment method. If more brands join the bandwagon then this would be a bullish indicator for the price of DOGE.

4. Exiting a bear market.

Arguably bitcoin is currently in a mini bull market. It remains to be seen if this sentiment will persist over the coming months. If it does it could mean good news for DOGE holders.

Dogecoin’s price is highly dependent on what the crypto market is doing overall. If DOGE were to reach its all-time high that is 10 x from its current price.

Of course, past performance is never a guarantee for future performance. Also, most analysts expect that we are in a bear market and we are in what is called a bear trap i.e. the recent rise in prices is only temporary.

Whatever you do please make sure you do your own research as none of the content of this site is investment advice. If you are a swing trader you can probably take advantage of Elon Musk’s tweets and provided you run a good technical analysis then maybe you can make a return. But investing in Dogecoin is high risk.

Will Dogecoin Ever Reach $1: a Price Prediction for 2023

Will Dogecoin Ever Reach $1

I see a lot of people wondering how much money they could make if Dogecoin hits the 1 dollar mark. How likely is that to happen? Read more to find out.

Can Dogecoin reach $10?

can dogecoin reach 10

Many crypto enthusiasts are wondering how plausible is it for Dogecoin to reach $10? Like any ambitious investor, I’m on a mission to uncover the answer. Read more.

Can Dogecoin reach $100?

Can DOGE reach 100

The rise of Dogecoin has been anything but conventional. But can Dogecoin reach $100? I break the numbers down in this article. I also do a Doge price prediction. Read more.

So, is Dogecoin dead now?

No, I didn’t say that. While I have written a complete list of arguments of why Dogecoin will fail I don’t think this will happen soon. The community of Dogecoin holders is too strong for this to happen any time soon.

As a writer for elementalcrypto, I also look at the search trends of the topics I write about. I see way too much interest in Dogecoin than I think it deserves to simply dismiss it.

Will Dogecoin make me rich?

No, you are not going to get rich from investing in DOGE. Most people would agree that being rich means being a millionaire. And most likely the maximum you are willing to invest is $1,000.

So you now need the price of DOGE to grow 1000 times. For that to happen the market cap of DOGE would need to grow to $13 trillion.

Dude! That’s almost the entire GDP of the United States.

And if you put in more than $1,000 you are at serious risk of losing your money.

If you still want to buy DOGE however make sure to do it right and read the guide below

How to buy Dogecoin

How to Buy Dogecoin

In this article, I will walk you through how to buy Dogecoin and everything you need so as to be set up correctly. Read more.

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

Learn About a New
Coin Every Week

Learn About a New
Coin Every Week

Master Crypto Basics

Join over 7,300 subscribers. It’s free.

elementalcrypto newsletter benefits