Doge remains a meme to many serious investors despite generating news. It is being introduced into the DeFi sector to give the coin respectability. Mass adoption might be pushed by adding dogecoin to DeFi and eventually other cryptocurrencies.
Is DOGE still a meme coin?
The meme-inspired cryptocurrency dogecoin continues to be a hot topic. particularly after soaring to a record high of $0.72 on May 8. Doge is still viewed as a joke by many serious investors, despite the fact that it has garnered attention this year because of its volatility.
This is in part because to doubters' fears over its instability, lack of liquidity and utility, and possibly limitless production. especially those who don't deal with cryptocurrencies.
Introducing proof of work assets to decentralized finance (DeFi) marketplaces has been one option. With its "Doge," BTCST most recently accomplished this.
Doge is a wrapper version of Dogecoin that gives users access to DeFi's advantages. For instance, staking and earning rewards through increasing market liquidity and capital efficiency. It also brings dogecoin to DeFi as a rewardable asset that puts Doge to work.
The issue with dogecoin
A big reason why Dogecoin is such a well-liked cryptocurrency is because Tesla CEO Elon Musk frequently tweets about his preferred asset.
Back in 2013, it first appeared as a meme currency. Since then, its value has increased dramatically, reaching approximately 13,000% in 2021.
One of dogecoin's biggest flaws despite its widespread popularity, devoted fan base, and celebrity endorsement is its scant real-world use. Over 1,400 of the 32 million establishments in the U.S. that are listed in the business directory Cryptwerk accept doge as payment or gratuities.
The fact that doge has no supply limit is another problem. As a result of the hypothetical endless supply of tokens, investors are hesitant to invest. The fact that Dogecoin's block rewards happen every minute is a further factor. That amounts to 600,000 new coins per hour, 14.4 million daily, and 5.26 billion annually. Doge had have a supply cap before 2014; it was set at 100 billion coins.
As many have noted, this causes the asset to become inflationary and inevitably lowers its value. Additionally, a lot of observers have noted that doge's explosive growth is a result of both its low liquidity and its rapid network expansion. This is especially thanks to influential figures in the community like Musk and supporters of doge.
This is neither sustainable nor efficient. A devoted group of doge owners nonetheless wishes to put their currency to greater use. They want to expand the community of users and holders of the coin.
DeFi, the cryptocurrency fix
The hashrate-backed wrapped version of the doge was presented as a workable response to the growing demand from the doge community looking for more efficient ways to HODL doge.
This wrapped token, sometimes referred to as tau doge or "Doge," enables the cross-chain trading and swapping of doge. It is a tokenized form of another coin.
Doge enables users to get more out of their doge by allowing them to stake it on different DeFi services like PancakeSwap and get rewards. Compared to doge that simply sits in a wallet, Doge significantly improves capital efficiency and liquidity by bringing additional utility to dogecoin through more use cases.
