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There’s something about DOGE…..

Exclusive Research

  • Dogecoin Foundation revives after six years of silence.
  • Elon Musk and Vitalik Buterin join its advisory board.
  • Developers roll out update 1.14.4, introducing fee reductions.
  • Real use cases are yet hard to find, but some are announced.

Self-Reflection

Numbrs’ last article on DOGE didn’t paint a flattering picture. To achieve fair coverage, this article will try to make a case for DOGE.

A quote from billionaire investor, Mark Cuban, serves as an introduction: "The point about DOGE that people miss is that DOGE's imperfections and simplicity are its greatest strengths. You can only use it to do 2 things: Spend It or HODL It. Both are easy to understand. And it's cheap to buy. Which makes it a community anyone can join and enjoy."

Plus confidence-inspiring developments occur in DOGEland.

The Foundation strikes back

After six years of total silence and complete absence, the Dogecoin Foundation is back with a vengeance! In a show of renewed vigour, it added two bright new stars to its board of advisors.

Namely, Vitalik Buterin, co-founder of Ethereum and crypto-deity, and Jared Birchall. If the latter doesn’t ring a bell, don’t worry. He is a representative of Elon Musk’s family office.

Musk was never shy in expressing his fondness for DOGE. As far back as May, he asked his 60 million followers if Tesla should accept payments in Dogecoin.

But Vitalik Buterin’s addition was quite surprising. In a quiz session on Twitter, he answered a question regarding the most promising ideas for the collaboration between ETH and Doge: “Personally, I hope that Doge can move to PoS soon, perhaps using code from Ethereum. I also hope they don't cancel the 5 billion/year annual PoW issuance, instead they could use some kind of DAO that finances global public goods. (That) would fit well with the not-greedy ethos of Dogecoin."

This ethos can be found hailing proudly from the foundation’s new fangled website:

  • Being useful, we value utility over technical brilliance.
  • Being personable, we value individuals and interactions over profit-driven economics.
  • Being welcoming, we value collaboration and trust over competition and exclusivity.
  • Being reliable, we value working solutions over the speed of delivery.

Dogecoin has grown a lot in the last year. This is mostly thanks to its community, which has put in a lot of unpaid work, sometimes, even at the expense of their personal lives. The foundation now wants their top contributors to work on Dogecoin as a real full-time job and is looking for someone to fund projects.

The love affair of Elon and DOGE might turn into a thruple

In a Twitter Q&A by Vitalik Buterin, where only people the Ethereum co-founder follows could ask questions, Elon Musk asked: “What is love?” Vitalik responded “X AE A-12 don’t hurt me…”, paraphrasing the famed Haddaway smasher and referencing Elon's daughter's name.

How that name is actually pronounced is still as much a mystery as why Elon and Vitalik teamed up on the Dogecoin foundation.

In an interview with AI researcher Lex Fridman, Vitalik could be heard saying: “If DOGE wants to somehow bridge to Ethereum, and then people can trade DOGE thousands of times a second inside of loopring, then that would be amazing.” Loopring refers to a promising scaling solution for Ethereum, not a dog collar.

I definitely don’t think Ethereum is opposed to dog coins,” Buterin emphasised. “I kind of want the fans to feel like Ethereum is, at least a little bit, in spirit, itself a dog coin.

And commenting on Musk’s support: “You would make a mistake if you were to ascribe too much sophisticated malevolence or any deep intentionality to the whole process. He’s just a human being, and he likes dogs just like I like dogs.”

Musk commented on the interview, tweeting: “I pretty much agree with Vitalik.”

So that’s settled then, right? For the love of… dogs and the Shiba Inu breed, specifically.

Further confirmation wasn’t far ahead. Musk is now the proud owner of a Shiba Inu dog called ‘Floki’. This new addition to the Space X CEO’s household instantly spawned tokens like Shiba Floki, Baby Floki Inu, and Floki Inu, which saw “gains” of up to 1,000%.

If only Starlink coverage could grow so quickly.

Apart from the all-round fuzzy feelings of friendliness, discharges of delight and alpha-dog affection, some cold, hard, technical progress has been made.

Small update, Much fee reduction

The Twitter account, Dogecoin Devs, announced the next update to Dogecoin on 21 August. After years of little activity, this was a much needed sign that DOGE development had picked up steam.

The project’s Github lists the improvements in Dogecoin 1.14.4:

Prepares the network for a reduction of the recommended fees by reducing the default fee requirement 1000x for transaction relay and 100x for mining. 

At the same time it increases freedom for miner, wallet and node operators to agree on fees regardless of defaults coded into the Dogecoin Core software by solidifying fine-grained controls for operators to deviate from built-in defaults.

Synchronization time has been reduced by around 2.5 times.

Preceding this update was a Dogecoin fee change proposal on 28 June, that Elon Musk dubbed “Important to support”.

Musk once took to twitter to write: “Ideally, Doge speeds up block time 10X, increases block size 10X & drops fees 100X. Then it wins hands down.” While it probably doesn’t work like that, lower fees could become an important incentive for users to transact on this chain.

The near future will tell if the foundation manages to find sponsors and hire developers. Then it will be a matter of execution and tenacity to continuously improve Dogecoin.

When your heart’s on fire, smoke gets in your eyes

The elephant in the room remains the distinct lack of technical progress. No smart contracts. No virtual machines. No De-Fi. No NFTs. And with few developers working on the project, catching up will become impossible.

On the other hand, a case could be made that Dogecoin will slowly incorporate the best practices of other blockchain technologies after these have outgrown their teething problems. It could be argued that it doesn’t need to be at the forefront of innovation. With a couple of dedicated developers, it could implement proven tech, after all the difficult problems are solved by cutting edge developers on Ethereum or Polkadot.

All Doge really needs is users. And here we can circle back to Mark Cuban’s quote: “You can only use it (DOGE) to do 2 things: Spend It or HODL It.” It’s fair to say that yield farming on sketchy De-Fi sites isn’t for the faint of heart or for people who are still on the fence about crypto in general.

Buying a few hundred DOGE for less than $100 and dabbling in a fun, inclusive community, is much more likely to have n00bs join the fray than locking up a couple of grand in a KSM parachain auction for close to a year.

What DOGE really needs is use cases and ease of onboarding. Both do not require cutting-edge cryptographic knowledge. Standard web development skills suffice.

On September 22 AMC Theatres announced they’ll accept DOGE as payment, after a hugely successfull poll tweet.

The ball is firmly in the Dogecoin foundation's court. Can they make it happen?

Conclusion

With strong support by the community and by influencers of Musk and Cuban’s calibre, one has to admit: There’s something about DOGE….

But lack of real use cases and no full-time developers working on the project, dampen any upcoming enthusiasm. Summing it up:

The case for DOGE is the same as for having a dog in a city apartment. It doesn't make any sense, but it pleases the heart.

Nothing in this article constitutes professional and/or financial advice. The content is provided exclusively for informational and/or educational purposes. Nothing is to be construed as an offer or a recommendation to buy or sell any type of asset. Seek independent professional advice in regards to financial, tax, legal and other matters.

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