3.3. Deflationary Halving—Unlike Bitcoin.

One of the key mechanisms controlling Bitcoin's inflation is halving. Halving is the process by which the reward miners receive for creating new blocks is reduced by half every 210,000 blocks (approximately every 4 years). This mechanism limits Bitcoin’s total supply to 21 million coins, creating scarcity and helping control inflation.

However, halving does not make Bitcoin a truly deflationary asset— it only slows down the rate at which new coins are created, rather than reducing the number of coins in circulation. In this regard, Bitcoin is not unique, as many stocks on the financial market, which do not issue additional shares, also have a fixed supply in circulation, making them similar to Bitcoin in terms of their supply model.

DeflationCoin implements the “Deflationary Halving” mechanism.

After Wallet A transfers coins to Wallet B, 1% of the received amount is deducted from Wallet B after 24 hours (this occurs if Wallet B does not transfer the coins to “Smart-Staking” within 24 hours).

With each subsequent day, the deduction percentage doubles. This means that at the beginning of each new day, an updated deduction percentage is applied to the remaining balance, as outlined in the table below.

Table №1: Deflationary Halving.

Day	Withdrawal Percentage	Wallet with 1,000 Coins
1	1%	990 coins
2	2%	970,2 coins
3	4%	931,4 coins
4	8%	856,9 coins
5	16%	719,8 coins
6	32%	489,5 coins
7	64%	176,2 coins
8	100%	0 coins

Therefore, if Wallet B does not transfer its coins to “Smart-Staking” within 8 days, its balance will be completely depleted.

Thanks to the “Deflationary Halving” mechanism, the economic model of DeflationCoin not only ensures a limited supply but also continuously reduces the number of coins in circulation. This mechanism incentivizes participants to transfer their coins into “Smart-Staking.”