Is Dogecoin Crypto's New Stablecoin?
A few months ago I argued that Dogecoin's numerous partnerships with various businesses out there (which now seems never-ending at this point) made it a perfect candidate to emerge as a crypto-based "stablecoin" in the Web3 ecosystem as a whole. Given the astronomical jump in 2020-2021 (almost 100000%+) and wild volatility that the coin typically exhibits, the idea may seem absurd but if you look at the project more closely it seems more and more likely that we're starting to get there.
- Dogecoin's current inflation rate is around 4%, which is set to gradually taper off over time. (Disinflationary model.)
- Businesses like Dogecoin because its inflation rate is reasonable and predictable, which allows them to use the coin for long-term projects. (Inflationary assets are good for speculators but businesses need stability, not growth.)
- Bitcoin and Ethereum are currently treated as speculation assets (what happens with ETH2/ConsenSys is TBD) but Dogecoin has focused on usability from the very beginning.
As argued in the previous idea, the widespread adoption of Dogecoin by the business communities make the coin less useful for speculation (it's not likely we're going to see a huge spike like we did in the last few years) but as a stablecoin, it tends to whether downturns in the market a lot more. This week may be the first time we've seen this pattern emerge so clearly.
- Dogecoin's current inflation rate is around 4%, which is set to gradually taper off over time. (Disinflationary model.)
- Businesses like Dogecoin because its inflation rate is reasonable and predictable, which allows them to use the coin for long-term projects. (Inflationary assets are good for speculators but businesses need stability, not growth.)
- Bitcoin and Ethereum are currently treated as speculation assets (what happens with ETH2/ConsenSys is TBD) but Dogecoin has focused on usability from the very beginning.
As argued in the previous idea, the widespread adoption of Dogecoin by the business communities make the coin less useful for speculation (it's not likely we're going to see a huge spike like we did in the last few years) but as a stablecoin, it tends to whether downturns in the market a lot more. This week may be the first time we've seen this pattern emerge so clearly.
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