Dogecoin, Cardano… the greatest marriage between two cryptocurrencies begins. Charles Hoskinson, Cardano’s co-founder, asked the community’s opinion on a major project. It would derive from a historical operation. Last weekend, he offered to invite Dogecoin to leave his blockchain for him. From a proof-of-work infrastructure, the cryptocurrency would move on to proof-of-stake. It would not be a question of combining Cardano and Dogecoin but of creating a “sidechain”, to make both evolve on the same blockchain.
Proof-of-stake, compared to proof-of-work, allows for greater performance and a way to see further and wider. Currently, Dogecoin is based on the same principle as Bitcoin and follows its philosophy of cryptocurrency as a store of value. The move to Cardano’s infrastructure would transcend Dogecoin into an exchange token, potentially opening up to NFT and other decentralized finance projects. A path that guides the co-founder of Cardano as well as 80% of the interviewees, who approved the idea on Twitter.
Should we pitch to Twitter an ultra-fast, identity-enabled, Cardano post-quantum doge sidechain custom built for social networks? #QuantumDoge
—Charles Hoskinson (@IOHK_Charles) October 29, 2022
Dogecoin on the Cardano Blockchain
Why should Dogecoin change its model and acquire a more efficient blockchain for transactions? To understand this, we need to talk about Elon Musk’s acquisition of Twitter. In fact, thanks to him, the social network opens up to a new strategic plan, far from the simple vision of microblogging and the social network. The rumors about the creation of a great app capable of integrating cryptographic transaction functionality are intrinsic to the ransom. In anticipation, there are those who wonder if Dogecoin would not be the lucky one to become the official currency. An Elon Musk favorite, Dogecoin has grown 100% over the past seven days.
Usually the creation of a “sidechain” does not serve to invite other cryptocurrencies on a blockchain. But the general idea is reminiscent of the project with Dogecoin. Creating a sidechain increases the scalability of a blockchain, allowing it to simplify cumbersome tasks. By definition, Dogecoin would remain Dogecoin but would go from being a cryptocurrency to a token. Tokens, such as the SAND of The Sandbox platform, are qualified 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 of Ethereum, as they seek to push the limits of blockchain number 1 in the decentralized finance ecosystem. Charles Hoskinson, the co-founder of Cardano, had also participated in the creation of Ethereum. Previously in vogue, due to its performance, its popularity is now in sharp decline, as is the price of its cryptocurrency (-80% in one year). Meanwhile, Ethereum underwent a historic operation called “The Merge”, which allowed 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, carried out by an entrepreneur in search of profitability and recognition, the arrival of Dogecoin on the Cardano blockchain, in anticipation of a Twitter 2.0, is not trivial. On the one hand, it will be necessary for Elon Musk to confirm his intentions to integrate crypto exchanges, and for him to choose Dogecoin, just as it will be necessary for the Dogecoin Foundation to find his interest in the exchange. On paper, marriage seems successful. But the bulk of the occasion falls on Cardano. If Dogecoin takes the bet and Elon Musk turns his back on him, then Dogecoin will lose its independence and its character as a store of value similar to the idea of Bitcoin.
One thing is certain, the Cardano blockchain is losing momentum as fewer and fewer investors are looking into it. Symbolic detail, Dogecoin now weighs more in capital letters. In eighth position of the ranking, at 17 billion dollars, Dogecoin is ahead of Cardano, in ninth position and at 13 billion dollars. The difference in trading volume is also impressive. In recent days, up to 12 billion dollars have been traded on Dogecoin in 24 hours. Cardano has very rarely exceeded $ 1 billion in the past six months.