In the first 600,000 blocks (about 1 year and 2 months) 100 billion Pepecoin will be mined. After this, every block will award 10,000 Pepecoin. At one block per minute this equates to an additional ~5.25 billion Pepecoin per year. Because a flat amount of new coins are mined, Pepecoin inflates less each year.
Inflation = ~5.25 Billion/TotalSupply
Since TotalSupply increases each year, inflation decreases.
Pepecoin uses a simplified variant of the scrypt key derivation function as its proof of work with a target time of one minute per block and difficulty readjustment after every block. The block rewards are fixed and halve every 100,000 blocks. Starting with the 600,000th block, a permanent reward of 10,000 Pepecoin per block will be issued.
Reasoning from Dogecoin:
Originally, a different payout scheme was envisioned with block rewards being determined by taking the maximum reward as per the block schedule and applying the result of a Mersenne Twister pseudo-random number generator to arrive at a number between 0 and the maximum reward.
This was changed starting with block 145,000, to prevent large pools from gaming the system and mining only high reward blocks. At the same time, the difficulty retargeting was also changed from four hours to once per block (every minute), implementing an algorithm courtesy of the DigiByte Coin development team, to lessen the impact of sudden increases and decreases of network hashing rate.
The current block reward schedule:
| Block | Reward in Pepecoin |
|---|---|
| 1–99,999 | 500,000 |
| 100,000–199,999 | 250,000 |
| 200,000–299,999 | 125,000 |
| 300,000–399,999 | 62,500 |
| 400,000–499,999 | 31,250 |
| 500,000–599,999 | 15,625 |
| 600,000+ | 10,000 |