CMC Academy takes a deep dive into Dogechain, a PoS blockchain that’s built on Polygon Edge.
Can you teach an old dog new tricks?
Dogechain, a smart contract enabled Layer-2 for Doge that lets users use Dogecoin to pay gas fees on the network, suggests you can.
It’s hard to overstate the underlying affection that remains for the first uber-successful memecoin, even though it’s easy to find detractors for it. Dogecoin (a fork of Litecoin) has been heavily supported by Elon Musk despite it being initially marketed as simply a joke. It still retains a healthy price relative to the market and remains a top 10 crypto by market cap even during the current bear market.
Dogechain plans to unlock new potential for Doge, but what exactly is it?
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What Is Dogechain?
Dogechain is a Proof-of-Stake blockchain that’s built on Polygon Edge, a framework and SDK that lets developers build EVM-compatible blockchains that can mint NFTs, create tokens and host decentralized applications (DApps). Its unique feature is its ability to interact with the Doge network and port over Dogecoin to use for these activities. With this new functionality now available, Dogechain wants to invigorate the $DOGE community and unlock new opportunities.
First, it’s important to state what Dogechain is not. Dogechain is not an expansion of the Dogecoin project.
"Claims in the media that Dogecoin launched a 'Dogechain' test network are false,” said Jens Wiechers of the Dogecoin Foundation.
Dogechain is not built on the Dogecoin network (which isn’t smart-contract enabled). It’s also not a "layer-2" for Doge in a technical sense — that’s simply a marketing slogan. It was neither created by the Doge foundation nor the original founders.
With that out of the way, let’s focus on what Dogechain is. It’s a project that is creating utility for $DOGE, moving it beyond simple transactions. The founding team believes that giving Dogecoin holders access to advanced functionality using their $DOGE will help onboard the many casual holders of the meme token to the greater world of Web3 — exposing them to the potential of smart contracts and all the different verticals made possible by programmable tokens.
How Does DogeChain Work?
You can’t use $DOGE directly on Dogechain. Instead, Dogechain has built a bridge to facilitate the transfer of tokens from the dogecoin blockchain. A (3-of-5) multi-sig smart contract holds the $DOGE sent to the chain in escrow (burning) and mints $wDOGE at a 1:1 ratio in return. In this way, holders of Doge can bridge their tokens to Dogechain and, by doing so, receive wrapped Doge ($wDOGE).
It’s this token, pegged to the price of Doge, that acts as the gas for the chain. It opens the ability for users to pay for DApps, smart contract execution, NFTs and more using their Dogecoin. The chain has another native token, $DC, which we’ll discuss later.
A user must have at least 100 $DOGE to be able to bridge to Dogechain. They can, at any time, return their $wDOGE to the smart contract to reclaim their $DOGE. Yet the unwrapping process can take some time.
Polygon Edge, the framework Dogecoin is built on, also has a decentralized Ethereum bridge built in, and tokens on the chain adhere to ERC-20 standards. This means that tokens generated on Dogechain should be compatible with the general Ethereum ecosystem, and Ethereum smart contracts can be deployed on the chain. This technically makes it possible for other EVM chains to build bi-directional bridges to Dogechain to facilitate asset transfers. Some have already announced their intention, but the bridge between Dogecoin and Dogechain remains the most widely used one.
Crucially, rather than relying on Polygon’s shared security (that’s available through Polygon Edge), Dogechain has full sovereignty and maintains its own validator set using IBFT PoS — which is both fast and scalable. It means as long as 2/3rds of nodes agree, a transaction executes.
However, the size of the validator set is unknown while Dogechain transitions from Proof-of-Authority (POA) to Proof-of-Stake (POS) following its launch. Despite this decision to stay sovereign, Dogechain should still be able to connect to the Polygon Supernets in the future.
What Makes Dogecoin Unique?
Retail crypto users holding pocketfuls of Dogecoin can get their teeth stuck into DeFi and NFTs with almost no barrier to entry.
Developers who can code for Ethereum can code for Dogechain too, so more DApps on the nascent platform may spring up soon. Dogechain’s JSON-RPC API is designed to be familiar to anyone who currently codes for EVM chains like Ethereum, Avalanche and Fantom. DEXs on the platform already exist — allowing users can trade $DOGE for new tokens being created on Dogechain, and development is progressing rapidly.
The team behind the project recently hosted a Twitter space outlining some of the projects already being built on the chain.
Dogechain is focused on onboarding developers, with verticals like DeFi, GameFi, NFTs, yield tools, NFT markets and metaverses reportedly in development, with some already live at this stage.
According to the Dogechain team, the actual innovation is creating an ecosystem for DOGE and the ability to port it to a fast, scalable, Proof-of-Stake, EVM-compatible network where the coin can be used within an emerging ecosystem, rather than just as means of wealth storage.
The $DC Token, Tokenomics and Airdrop Distribution
$DC is the staking and governance token of Dogechain. Initially, it was planned for users to stake $wDOGE to earn $DC, but this idea was scrapped when it was determined that this would suffocate natural activity on the chain and only benefit the largest holders. Instead, Dogechain said they wanted tokenomics that put “loyal shibes” first.
Instead, 3% of $DC’s 1 trillion supply is being distributed to current $wDOGE holders. This will continue for a period of 12 months and a further 9% will be airdropped intermittently over a period of 48 months. Snapshots will be taken periodically with the $DC rewards distributed based on them.
On top of that, the lion's share of $DC will fund the community through a DAO treasury (29%), as well as rewarding validators for securing the network (15%). Some of the remaining $DC will be given to contributing team members, the Dogechain foundation and the treasury, while the other will serve liquidity and market-making functions and help to fund marketing efforts.
A full description of the $DC token utility can be found in the project whitepaper.
Dog Days Aren’t Over
Although it's early days, interest has proven substantial. With over $200 million worth of DOGE already bridged over to the new chain as holders look to explore the nascent ecosystem. This represents approximately 2.5% of the total DOGE supply, indicating significant room for further onboarding.
The creation of an entire smart-contract playground for the Dogecoin community to benefit from is an interesting prospect and could set the standard for other memecoins.
If early momentum is maintained, and developers create the right DApps, tokens and NFTs to inspire a new era of Doge-fuelled memetic mayhem, then Dogechain could become a natural extension to Dogecoin. But it’s got a lot of proving to do before it can be considered a rival to other smart contract platforms.
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