Dogecoin's introduction of the DRC20 token standard has sparked interest and raised questions about its potential to compete with other token standards like Bitcoin’s BRC-20 and Litecoin’s LTC20.
However, there is an interesting pattern that has followed the emergence of token standards recently, just like that of the cryptocurrency invention and launch. When Bitcoin was created, the Litecoin team took it upon themselves to create a “lighter” Bitcoin in the cryptocurrency.
Dogecoin, on the other hand, decided to make a “joke” out of Bitcoin by creating the Elon Musk-admired asset. Now, there seems to be a repeat of the occurrence with the creation of the “20s” token.
Read More About Bitcoin BRC-20 Token Standard Here
As a meme, Dogecoin was developed without any concrete utility. However, the DRC20 experiment may change the notion, as the community seems committed to creating use cases for the eighth-largest blockchain in market capitalization.
But there are significant differences in Dogecoin’s standard considers priority, when compared to Bitcoin and Litecoin. In BRC-20’s case, text inscriptions are the leader of the pack, rising above the widely-known images on the Ethereum blockchain.
Litecoin, however, has followed in Ethereum’s footsteps with the creation of NFTs like the Litecoin Punks. But Dogecoin’s Doginals, inspired by Bitcoin Ordinals, has been marred with a hike in transactions, and a raging demand for better adoption. But what exactly is the DRC20?
DRC20: Drawbacks and Potentials
Instead of linking inscriptions to satoshis, the smallest unit of Bitcoin, Dogecoin inscriptions are tied to Shibes. For context, Shibes are considered the tiniest unit to measure the meme. Recall that Bitcoin had an issue of congestion when transactions surged amid the adoption of BRC-20.
Some members of the Dogecoin community have also shown concern while looking for solutions to avert a repeat of the Bitcoin incident. However, the dedicated Twitter page of the DRC20 invention DogeLabs has addressed the worry.
https://twitter.com/verydogelabs/status/1657380263532576770?embedable=true
According to the developers, there were already solutions in place to cover the issue of indexer blockage. An indexer challenge occurs when it becomes difficult for transactions to be verified on a block.
Therefore, resulting in clogging, and a hold-up in processing subsequent transactions. Despite the assurance of a solution, Dogecoin transactions surpassed that of Litecoin and Bitcoin.
As of 14 May 2023, the transactions on the Litecoin network were over 452,000. Bitcoin recorded over 565,000 while Dogecoin came top with 719,895, based on data fromBitInfoCharts.
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Usually, an increase in transactions means a spike in volume. And when this metric increases, it implies that there have been a lot of coins that have participated in exchanging hands around a specific period.
Thus, this infers that the introduction of DRC20 has had a positive effect on the Dogecoin ecosystem. But one should note the increased number of transactions does not necessarily translate to profits for participation.
In terms of price,CoinMarketCap showed that the adoption of the token standard has had little to no effect on the DOGE value. At the time of this writing, the coin price was $0.07, consolidating from its value in the last seven days.
Nonetheless, DRC20 has been one of the factors that have brought Dogecoin into the limelight. Whether this experiment lasts the test of time or not, largely depends on several factors including market sentiment, and developer dedication. Still, it remains a trial to keep an eye on especially in a market that isn’t really filled with enthusiasm.