In a startling twist, Dogecoin outpaces Bitcoin, but there’s more beneath the surface.
In a recent surge of activity, Dogecoin hit a record-breaking high of 719,000 daily transactions this Tuesday (May 16, 2023), according to Pedro Solimano’s May 17th article in Decrypt. The burst of activity was driven by the newly implemented DRC-20 standard that allows meme coins to be created on the Dogecoin network.
Interestingly, Dogecoin’s daily transactions managed to surpass Bitcoin’s recorded 566,000 transactions on the same day.
This sudden surge in activity is credited to the rise of “Doginals,” Dogecoin’s unique take on non-fungible tokens (NFTs), made possible by the new DRC-20 standard, which is similar to Bitcoin’s BRC-20 standard. These standards allow for the inclusion of arbitrary and non-financial data in blocks. Dogecoin users have been keen on crafting tokens into “shibes,” the smallest Dogecoin denomination, and tracking their movements across the network.
However, Dogecoin core developer Patrick Lodder expressed skepticism about the sustainability of this trend in his interview with Decrypt. Lodder highlighted concerns about potential “under-engineering” and doubts about the ability to program these tokens in a “trustless way,” similar to an ERC-20 token. He anticipates that growing pressure on Dogecoin might bring a swift end to this new trend.
Notwithstanding the developer’s apprehension, the Dogecoin network experienced a dramatic increase in transactional activity following the DRC-20 rollout on May 9th. The number of transactions leaped from an average of 20,000 per day to an impressive 450,000 transactions the day after the new standard was introduced.
Shaurya Malwa of CoinDesk also reported on the surge in Dogecoin transactions, highlighting how the introduction of DRC-20 tokens has set the stage for potential decentralized finance (DeFi) services on the blockchain. Like the Decrypt article, the CoinDesk article noted that there are valid concerns about potential network congestion and high fees, which could discourage user adoption.
Critics within the Dogecoin community also expressed their reservations, pointing out that the DRC-20 standard could shift Dogecoin away from its original intent of serving as an everyday currency. As seen with Bitcoin’s BRC-20 standard, meme coin trading frenzies can lead to high fees and congestion on the network. Thus, the sustainability of Dogecoin’s newfound popularity remains uncertain as it navigates these newfound complexities.