As one of the most followed representatives in the crypto assets market, the inflation mechanism of DOGE ($DOGE) has always been a focal point of concern for investors. This article will delve into the potential impact of this feature on its future development.

First, the unlimited supply model of DOGE poses a barrier to its price increase. It is expected that from 2021 to 2025, its circulation will surge by more than 40%. This means that even if the market cap recovers to historical highs, the value of a single token may be diluted due to supply inflation, making it more difficult to break through historical price highs.

Secondly, inflation may lead to an imbalance in market supply and demand. If the growth rate of demand does not keep pace with the expansion of supply, DOGE may face the risk of a decline in value. This trend could trigger a crisis of investor confidence, leading to a sell-off and further exacerbating price pressure.

Despite the Dogecoin community's efforts to reduce circulation through various means such as charitable donations, these initiatives seem inadequate to offset the long-term effects of inflation. The community's ability to regulate is relatively limited, making it difficult to fundamentally address the challenges posed by inflation.

It is worth noting that the high level of attention on social media for DOGE provides some short-term price support. However, if there is a lack of substantial application scenarios and solid fundamentals, this support effect may be difficult to sustain.

For institutional investors, the inflation characteristics of DOGE increase its investment risk. Although it has received endorsements from notable figures, the lack of intrinsic value and scarcity may affect the long-term investment decisions of large institutions, limiting its opportunities to attract substantial institutional funding.

In summary, the inflation mechanism of DOGE poses multiple challenges to its long-term development. Investors need to comprehensively assess these factors and weigh the potential risks against the rewards when considering DOGE. In the future, whether DOGE can overcome the inflation dilemma will depend on its breakthroughs in practical applications and value creation.