Dogecoin, Cardano… the greatest marriage of the two cryptocurrencies begins. Charles Hoskinson, Cardano’s co-founder, asked for community input on a major project. It would stem from a historic operation. Last weekend, he offered to invite Dogecoin to leave its blockchain for his. From a proof-of-work infrastructure, cryptocurrency would move to proof-of-stake. It would not be a matter of merging Cardano and Dogecoin, but of creating a “side”, to have both develop on the same blockchain.
Proof of stake, compared to proof of work, allows for greater performance and a way to see further and more broadly. Currently, Dogecoin is based on the same principle as Bitcoin, and follows its philosophy of a cryptocurrency as a store of value. The move to Cardano’s infrastructure will overtake Dogecoin as an exchange token, likely open to NFTs and other projects in decentralized finance. A path leading Cardano’s co-founder as well as 80% of survey respondents who approved the idea on Twitter.
Should we present to Twitter a post-quantum, identity-enabled Cardano order doge sidechain built for social networks? #QuantumDoge
—Charles Hoskinson (@IOHK_Charles) October 29, 2022
Dogecoin on the Cardano blockchain
Why should Dogecoin change its model and get a more efficient blockchain for transactions? To understand this, we need to talk about Elon Musk’s acquisition of Twitter. Indeed, thanks to him, the social network opens up to a new strategic plan, far from the simple vision of microblogging and the social network. Rumors about the creation of a great app able to integrate functionalities of cryptographic transactions are intrinsic to redemption. In anticipation, some wonder if Dogecoin would be the lucky one to become the official currency. Elon Musk’s favorite, Dogecoin rose by 100% for the last seven days.
Usually, creating a “side” does not serve to invite other cryptocurrencies to a blockchain. But the general idea is reminiscent of the Dogecoin project. Creating a sidechain increases the scalability of a blockchain, allowing it to simplify heavy tasks. By definition, Dogecoin would remain Dogecoin, but would transition from a cryptocurrency to a token. Tokens, such as the SAND of the platform The sandbox for example, qualify as tokens as long as they evolve on a blockchain that does not belong to them (in this case Ethereum in our example).
Cardano, born in 2017, is one of the blockchains described as competitors to Ethereum as they seek to push the boundaries of the #1 blockchain in the decentralized finance ecosystem. Charles Hoskinson, the co-founder of Cardano, also participated in the creation of Ethereum. First in fashion, for its performance, its popularity is now in sharp decline, as is the price of its cryptocurrency (-80% in one year). Meanwhile, Ethereum has undergone a historic operation called “The Meltdown”which has enabled it to gain efficiency and fill its gaps.
Who will decide on this crypto-marriage?
That the project remains at the stage of a simple survey, created by an entrepreneur in search of profit and recognition, the arrival of Dogecoin on the blockchain Cardano, waiting for a Twitter 2.0, is not insignificant. On the one hand, it will be necessary for Elon Musk to confirm his intentions to integrate cryptographic exchanges and for him to choose Dogecoin, just as it will be necessary for the Dogecoin Foundation to find its interest in the exchange. On paper, marriage looks like a win-win. But most of the opportunity falls on Cardano. If Dogecoin takes the bet and Elon Musk turns his back on it, then Dogecoin will lose its independence and character as a store of value similar to the idea of Bitcoin.
One thing is for sure, the Cardano blockchain is losing momentum as fewer and fewer investors are looking at it. Token details, Dogecoin weighs more today in capital letters. In the eighth position in the ranking, with $17 billion, Dogecoin is ahead of Cardano, in the ninth position and with $13 billion. The difference in trading volume is also impressive. In recent days up to the equivalent of $12 billion was traded in Dogecoin, in 24 hours. Cardano has rarely exceeded $1 billion in the past six months.