Last Updated: 17 August 2022
The dogecoin price rose 7.5% today and is one of the few cryptocurrencies in the green. This seems to be due to the hype surrounding Dogechain, a second layer built on top of Dogecoin’s blockchain.
Dogecoin has been rising all week
The price of Dogecoin has experienced a 7.5% growth over the past 24 hours, at the time of writing the coin is trading at 0.0836 euros. What a difference from 7 days ago, when a DOGE was trading for just over 0.06 euros.
Dogecoin may have started as a joke, but the coin with the cute little dog is finally getting some sort of use.
Dogechain helped by Ethereum and Polygon
The biggest factor behind the increased price is the growing momentum around Dogechain. Dogechain is marketed as a “Layer 2 for Dogecoin”, but that term is incorrect. Dogechain is in fact an Ethereum-compatible smart contract network developed using the Polygon Edge framework.
It does not run on the blockchain of Dogecoin itself, but on Polygon Edge, a custom blockchain of Polygon, which in turn uses Ethereum. This has the advantage that Dogechain can run anything that the Ethereum Virtual Machine can handle.
Therefore, Dogechain is seen as a solution for DeFi protocols, NFT collectibles and decentralised apps and games.
Converting Doge to another network
Users must convert DOGE from the Dogecoin network to Dogechain via a digital bridge to use the various applications. This theoretically creates buying pressure on DOGE which can cause the price to rise.
If users successfully “bridge” DOGE to Dogechain, they will receive a wrapped version of the token called wDOGE. The small w stands for wrapped and you may also have come across this in the form of wBTC: wrapped bitcoins on the Ethereum network.
Early success for Dogechain
Dogechain went live earlier this month, but in recent days it has received increasing market attention. Many prominent traders are endorsing its growth on Twitter, albeit with a quip.
Bridging to dogechain, likely going to lose it all. Wish me luck.
— Bagsy (@Bagsy) August 16, 2022
What does the Dogechain network currently offer? A number of decentralised exchanges in the style of Uniswap. They go by the names DogeSwap and DogeShrek, and there’s a good chance more Doge-smart-word jokes exchanges will be added here. Besides these two, you also have Bourbon Defi and Yodeswap. These types of exchanges are also known as automated market makers.
Users can trade tokens on these exchanges, but they can also propose tokens to be traded here, provided of course they have enough DOGE wrapped in their wallet.
According to the Dogechain website, the network will also accommodate NFTs and decentralised video games in the future.
According to data from DEX Screener, Dogechain has seen $24 million in volume over the past 24 hours, of which DogeSwap accounted for $18 million.
Not an official Dogecoin project
Good to know is that Dogechain is not an “official” Dogecoin project. The Dogecoin Foundation retweeted a message today stating that it is not involved with Dogechain, as are the coin’s original founders, Jackson Palmer and Billy Markus.
Claims in paid media that Dogecoin launched a "Dogechain" test network are false. Neither @Dogecoin/@dogecoin_devs, nor @BillyM2k, @ummjackson or others associated with @DogecoinFdn are in any way affiliated with the token.
— ⬢ Jens Wiechers ⬡ (@jwiechers) August 16, 2022
They clarified that it is also not related to a Dogecoin blockchain explorer of the same name.