Dogecoin is more than just a meme when DOGE joins the DeFi game

The meme-inspired Dogecoin is still a much discussed crypto asset. In particular, it hit an all-time high (ATH) of $ 0.72 on May 8th. However, despite its attention this year, Dogecoin is still viewed as a hoax by many serious investors.

This is due in part to a lack of stability, a lack of liquidity and usefulness, as well as an endless supply that worries skeptics, especially those outside of the crypto space.

One solution to the fear is to bring Dogecoin to the DeFi market. This was last done by BTCST with its τDoge.

τDoge is a packaged Dogecoin that allows users to access the benefits of DeFi. For example staking and earnings – by bringing more capital efficiency and liquidity to the market. As a worthwhile commodity that keeps DOGE going, it also brings Dogecoin to DeFi.

problem of Dogecoin

Dogecoin is a widely used cryptocurrency, largely thanks to the frequent tweets from Elon Musk. DOGE is probably his favorite property.

DOGE started working as a meme coin in 2013. Since then, its value has increased nearly 13,000% in 2021.

Regardless of the mainstream, a community of die-hard followers and celebrities, one of Dogecoin’s biggest weaknesses is its lack of real-world use cases. According to the crypt, of 32 million businesses in the United States, only about 1,400 accept DOGE payments or tips.

Another problem with Dogecoin is that it doesn’t have an offer limit. This is the main reason for investor skepticism. Added to this is the Dogecoin block reward that takes place every minute, which corresponds to 600,000 DOGE per hour, 14.4 million DOGE per day and 5.26 billion DOGE per year.

Before 2014, DOGE was capped at 100 billion. However, in February of that year, founder Jackson Palmer decided to lift the supply cap to keep people from holding it.

As many have pointed out, the unlimited supply turns DOGE into an inflationary asset and drops back to its value. Additionally, many analysts have pointed out that DOGE’s outstanding growth is due to low liquidity and community overdevelopment. This is particularly due to the views of key leaders like Musk and community members who are actively committed to Dogecoin.

That is inefficient and unsustainable. However, there is still a loyal community and owners out there eager to create a better use case for DOGE. You want Dogecoin to be accessible and useful to more members and more owners.

DeFi – Dogecoin’s solution

To provide a possible solution to the growing needs of the Dogecoin community looking for more efficient ways to hold, the hashrate-based wrap version of DOGE was introduced.

This packaged token, named τDoge (Tau DOGE), is a synthetic asset or a cryptographic version of another cryptocurrency that DOGE can be exchanged and traded across chains.

τDoge enables users to do more with DOGE, e.g. B. Earning rewards and betting through various DeFi apps such as PancakeSwap. Since τDoge Dogecoin brings more benefits through more use cases, the capital efficiency and liquidity are significantly increased compared to DOGE, which just sits in the wallet.

The Tau protocol mechanism allows users with any token in wrap to participate in DeFi.

Link DeFi and POW

Cryptocurrencies have come a long way since the birth of Bitcoin, bringing thousands of new assets to the market.

Therefore, the reputation and awareness of cryptocurrencies are mainly tied to aspects such as volatility, utility and liquidity. However, in order for general acceptance to take place, these issues must first be addressed.

This is where DeFi comes in. Various tools allow people to actively use their favorite tokens to earn rewards that they would not otherwise deserve. This helps bridge the gap between asset hashrate and DeFi.

As a result, solutions take advantage of this by linking DeFi and Proof-of-Work (POW) tokens like DOGE, which increases utility and liquidity, but also minimizes volatility.

The introduction of Dogecoin for DeFi and eventually other cryptocurrencies could increase mass adoption by adding positive traits to the crypto market.

Teacher

According to Beincrypto

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