Dogecoin free Ridded Dogechain Rally and Later Calls it a Knockoff

As Dogecoin's price pumps up, much of the chatter around it right now regards a so-called "layer-2 for Dogecoin" called Dogechain.

Dogecoin Foundation board member Jens Wiechers rubbished claims that Dogechain is an affiliated product, saying "paid media" have disseminated false information that the two are connected. This follows an earlier tweet from Dogecoin developer @cb_doge, who posted that Dogechain is "another knockoff token," while giving DOGE holders the heads up on influencers promoting the project.

As Dogecoin's price pumps up 11% over the past 24 hours—much of the chatter around it right now regards a so-called "layer-2 for Dogecoin" called Dogechain, which is billed as enabling the creation of DeFi protocols, NFT collectibles, and decentralized apps (dapps) and games.

However, Dogechain isn't a true layer-2 network in that it's not built on top of Dogecoin. Instead, it's a separate network based on Polygon Edge, which is custom blockchain software from Polygon, the most popular Ethereum sidechain. And it's compatible with the Ethereum Virtual Machine, which means that it can run apps and games built for Ethereum.

Some Crypto Twitter users have speculated that users who bridge their dogecoin to Dogechain will be recipients of the airdrop. This has further increased short-term demand for dogecoin.

The Dogechain bridge is raking in money from retail traders betting on short-term price movements of the dog-themed tokens, many of which contain "doge" or "shib" in their names. Most of these tokens are speculative in nature, however, and do not showcase a legitimate use case.

Data from on-chain trackers shows some $4.6 million in value is now locked on Dogechain-based products since its launch earlier this week. Over 97% of that is locked on Dogechain-based exchange DogeSwap alone, the data shows.

Dogechain developers said Wednesday the network had seen over 480,000 unique transactions and some 58,000 native wallets since the network's creation earlier this week.

Thanks to the newfound smart contract capabilities available to the Dogecoin community, Dogechain has already seen the launch of several Uniswap-style automated market makers including DogeSwap and DogeShrek where users can trade tokens that have launched on the Dogechain network.

According to the project's website, the network has plans to eventually host nonfungible tokens (NFTs) and blockchain games. Data provided by the DEX screener shows that Dogechain has processed $17 million in volume over the past 24 hours.

Around 5 billion DOGE enter the Dogecoin supply each year. For the foreseeable future, Dogecoin will have an inflation rate of around 4%. It also means that Dogecoin will need a bigger and bigger market cap to get back to previous all-time highs.

Dogecoin co-founder Billy Markus posted a Tweet this year complaining that everyone who contacts him with a grand idea to pump DOGE to $1 (the price in August 2022 is $0.07) always suggests capping the DOGE supply.

Markus always replies he can't.

This is because:

Billy Markus is not in charge of Dogecoin anymore – the lead development team is the Dogecoin Foundation

The extra 5 billion coins paid to Dogecoin miners incentivize the validation of DOGE transactions. Take this away, and security is compromised

The problem of inflation is not something you'll read about in the wild headlines about Dogecoin pumps or Tweets from Elon Musk or Mark Cuban.

What is Dogechain?

Dogechain supercharges $DOGE to bring crypto applications like NFTs, games, and DeFi to the $DOGE community. Unfortunately, $DOGE cannot support any of these applications (or any other dApps). Dogechain fixes this. With Dogechain, Dogecoin holders can do more than simply hodl and wait for Dogecoin to the moon!

But can't Dogecoin hit $1 in the next bull market?

The possibility is there – but look at last year's price ticker for Dogecoin. DOGE hit its all-time high of $0.7376 in early May last year. Crypto had entered a bull market a month previously with Bitcoin reaching a price of $64,000. But when Bitcoin pumped again to $69,000 in November the price of Dogecoin didn't come close to a new all-time high.

The reasons for Dogecoin putting in its all-time high coincided with the backing of billionaire Elon Musk. More precisely, the price of $0.7376 came just hours before Musk appeared on Saturday Night Live. The price of DOGE then plummeted down to $0.18 within two months.

What this demonstrates is how much Dogecoin relies on stories in the media and general hype to hit an all-time high. When it comes to fundamental value there's not a lot going for DOGE.

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