2 Billion Coins, Gone for a Decade: The DigiDollar Supply Math
Disclaimer: This article is for informational and educational purposes only. It is not financial advice and not investment advice. Nothing here is a recommendation to buy, sell, lock, or hold DigiByte or any other asset. Cryptocurrency is volatile and capital can be lost. Readers should do their own research and consult a licensed financial professional before making any decisions.
DigiDollar is frequently discussed as DigiByte's stablecoin mechanism. Less attention is paid to its effect on supply, which is the variable most relevant to existing holders.
The Setup
DigiDollar (the proposed DigiByte-native stablecoin) is collateral-backed. Minting it requires locking up DGB. At 200% overcollateralization, every $1 of DigiDollar minted requires $2 of DGB locked. The long-dated version of this mechanism commits collateral for up to 10 years.
Two effects occur at the moment of minting under those terms: DGB is pulled off the open market (locked, not circulating), and it remains locked for a decade. The duration is the key factor. Unlike a position that can be unwound quickly, a 10-year lock removes supply from price discovery for the full term.
The Supply Backdrop
Per the on-chain figure from DigiByte.IO, current supply is 18,337,761,746.28 DGB, against a hard cap of 21 billion. Emission follows a decaying curve — the block reward reduces by 1% each month — so the roughly 2.66 billion coins still unmined enter circulation slowly, and the effective float is essentially the supply already in existence.
The float available to be locked is therefore approximately 18.34 billion coins.
Effect
Because the coin trades at a quarter of a cent, the coin-count per dollar is large. The DGB locked per $1 of collateral is:
$1 ÷ $0.0025 = 400 DGB per dollar locked
Small individual commitments therefore translate into substantial coin removal. A $500 position is 200,000 coins; a $1,000 position is 400,000. The lower DGB trades, the more coins each dollar of collateral removes from the market.
Scenario: a 5,000–10,000 participant community reaching 2 billion DGB
Consider the supply impact achievable by a realistic active community. Removing 2,000,000,000 DGB — roughly 11% of the entire float — requires a fixed total of $5,000,000 of DGB collateral at $0.0025, regardless of how that total is distributed among participants.
For a community in the 5,000–10,000 participant range, the individual commitment required to reach that 2B target is:
The target is reached whether the community skews larger and lighter or smaller and heavier. In every case the per-person commitment falls between $500 and $1,000, and the aggregate result is identical:
2,000,000,000 ÷ 18,337,761,746.28 = 10.9% of total supply locked for ten years
Approximately 11% of all DigiByte in existence would be removed from the order books for a decade — the result of a community of five to ten thousand participants, with no institutional involvement or treasury arrangements.
Floor Case: The $100 minimum commitment
The scenario above assumes a per-person commitment of $500–$1,000. It is worth examining the opposite end — the minimum viable position of $100 worth of DGB locked for 10 years — to establish the floor of what the same community could remove.
At $0.0025, $100 buys 40,000 DGB per participant. Across the same 5,000–10,000 community range:
At the $100 minimum, the community removes 200 million to 400 million DGB — roughly 1.09% to 2.18% of total supply — locked for the decade with no liquidations.
The contrast between the two scenarios illustrates the sensitivity of the model to per-person commitment size. The same 5,000–10,000 participants produce a roughly tenfold difference in supply impact — 1–2% at the $100 floor versus around 11% at the $500–$1,000 level. Participant count matters, but the size of each individual commitment is the larger lever.
The Significance of the 10-year Term
A lock that releases quickly merely shuffles coins between wallets. A 10-year lock structurally retires them. If a fraction of supply enters decade-long lockups while monthly emission continues to shrink, the result is a supply squeeze: a shrinking effective float meeting fixed or growing demand. Locked supply is unavailable to sell into rallies.
Two billion coins is not a marginal figure. At DigiByte's typical daily trading volume of a few million dollars, $5M of locked DGB is on the order of a full day's global volume — removed from circulation until the 2030s.
Caveats
- Participation is the determining variable. The scenario above is illustrative, not a forecast. It assumes a community of five to ten thousand individuals chooses a 10-year DigiDollar position at the stated commitment levels. The mechanism does not create that demand.
- The relationship is reflexive in both directions. As the DGB price rises, coins-locked-per-dollar falls — at $0.025 it is only 40 DGB per dollar, ten times less. The figures above are a snapshot at the current price, not a fixed cost. A higher price would require proportionally more dollars to lock the same 2B coins.
- Locks run to term. There are no margin calls or liquidations in this mechanism. Once collateral is committed, it remains locked for the full duration regardless of price movement, and is released only when the term ends. This makes "removed from supply" a firmer statement than in liquidation-based collateral systems — the coins are unavailable for the entire decade rather than at risk of being force-sold back into the market.
Summary
The relevant combination is not the 200% ratio or the 10-year term in isolation, but both together at a sub-penny price. A low price means a high coin-count per dollar locked; a long term means those coins do not return.
Against the live on-chain supply of 18,337,761,746.28 DGB, the arithmetic is straightforward: a community of 5,000 to 10,000 participants, each committing $500 to $1,000 of DGB, removes 2 billion coins — 10.9% of all DGB — for a decade, on a fixed total of $5 million in collateral. Whether that participation occurs is the open question; the supply mechanics are fixed.
This is not financial advice or investment advice. Supply figure: DigiByte.IO on-chain stats (18,337,761,746.28 DGB). Price assumed at $0.0025; both move continuously, so the 400-DGB-per-dollar figure should be re-run against the live price before being quoted.