What was once just a joking paraphrase of one of the many meme-worthy lines inspired by a 2015 clip of Shia LaBeouf can now be read as an assessment of the sheer potential of NFTs: “Don’t let your memes be dreams” — and we saw it come to fruition when an NFT based on Nyan Cat sold for $600,000.
And now it’s happening again as the Dogecoin continues to develop as a platform for decentralized finance, blockchain gaming, and of course, NFTs. At the center of the further legitimization of the OG meme coin is Dogechain — which was recently announced as a vital layer-2 network for the meme coin.
Okay, what is dogecoin?
Dogecoin is a cryptocurrency — like Bitcoin or Ethereum — initially developed as a joke by software engineers Billy Markus and Jackson Palmer. It’s also a snapshot into the internet culture of the early 2010s, as Dogecoin had initially launched in December of 2013. The coin’s name stemmed from the now-classic Doge meme — an image of surprised-looking Shiba Inu superimposed with the dog’s supposed internal monologue in Comic Sans.
However, despite the coin’s silly presentation and branding, serious work went into getting the meme coin up and running. The coin launched when Bitcoin was still one of the few big players in cryptocurrency, Markus and Palmer sought to make the underlying blockchain powering it more efficient. They succeeded, with the Dogecoin blockchain touting faster block times and transaction speeds than Bitcoin’s.
Now, if you’re wondering where you can buy Dogecoin for yourself, the currency is currently available on most cryptocurrency exchanges. As of writing, Binance and Coinbase, among others, offer users the ability to trade in fiat currencies and cryptocurrencies for Dogecoin. However, if you’re looking to do so as an investment, just make sure to brace yourself for a rogue Elon Musk tweet (or statement) down the line. On top of that, instances like Dogecoin’s Reddit-driven 800 percent surge in January 2021 add to the coin’s potential volatility as an investment.
A brief summary of layer-2 networks
Regarding blockchains, layer-2 refers to a network built on top of an existing blockchain designed to enable more efficient operation at a larger scale. Within Web3 development circles, creating a layer-2 network is one of the most often used solutions to counteract difficulties faced by each blockchain to handle all the transactions it verifies on daily. Ethereum — the de-facto blockchain used for minting NFTs — touts layer-2 solutions like Polygon.
Aside from addressing scalability concerns for each blockchain, by taking up some of a blockchain’s transaction throughput, layer-2 solutions also enable the development of decentralized applications (dApps) that don’t interfere with a blockchain’s core functionality. That makes layer-2 networks popular hosts for all sorts of dApps, ranging from crypto wallets, to decentralized finance (DeFi), to play-to-earn (P2E) games, and of course, NFTs.
What layer 2 for Dogecoin means
So what does this mean for Dogecoin? Through its new layer-2 network Dogechain, all sorts of utilities are now opened up for Dogecoin holders. It could also boast an improvement in efficiency compared to Dogecoin, thanks to its proof-of-stake authentication mechanisms. According to its website, “[with] Dogechain, Dogecoin holders can do more than simply hodl and wait for Dogecoin to moon!” Additionally, the layer-2 network will reportedly enable Dogecoin holders to use the cryptocurrency as a way to pay for gas fees.
However, Dogechain differs from other layer-2 networks in that it does not operate directly on top of the existing Dogecoin blockchain. Instead, Dogechain functions as a bridge between Dogecoin and its custom Polygon-based network. As such, dApps built on Dogechain won’t be using actual Dogecoin, instead relying on Wrapped Dogecoin — a proprietary token that pegs its value on actual Dogecoin.
Notably, Dogechain is far from the first layer-2 network to be established on top of the Dogecoin blockchain. As early as 2014 — a year after Dogecoin first came into being — a Dogecoin layer focused on creativity and social good launched called Dogeparty. Comparable to Bitcoin’s CounterParty layer-2 where early NFTs like Rare Pepes and Spells of Genesis were minted, DogeParty is home to the earliest NFTs on Doge, and it has enabled countless fundraising opportunities for Dogecoin holders, both big and small.
A troubled Dogechain launch
As reported on Decrypt, Dogecoin surged 11 percent in value last August. Much of the renewed interest in Dogecoin came about from the launch of Dogechain. Unfortunately, the initiative turned out to have no direct connection to the original Dogecoin team, according to a tweet co-signed by the Dogecoin Foundation’s official Twitter account.
Additionally, an independent investigation by Web3 sleuth ZachXBT uncovered evidence of a massive Dogecoin dump done by one of Dogechain’s developers. Since news regarding Dogechain’s launch first started circulating in Web3 circles, Dogecoin’s value has dropped, reaching a 30-day low, according to CoinGecko. That hasn’t gotten in the way of Dogechain’s popularity, however. In a September 2 tweet, the Dogechain Twitter account reported that it crossed 15 million transactions.
So where does the original meme project end and this new Web3-ready initiative begin? It’s hard to say. Despite how the original Dogecoin developers distanced themselves from this new project, the promise of all the latest utilities it stands to enable for Dogecoin “hodlers” is hard to deny. We’ll have to wait and see how the story of Dogechain unfolds — and if it continues the spirit of the meme coin that started it all nearly one decade ago.