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Dogecoin, Elon Musk's Favorite Crypto, Gets Serious

The popular meme coin was created as a joke to highlight speculation in the crypto industry.
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Is this the end of meme coins? 

As their name suggests, meme coins are tokens that have no utility and are essentially jokes. But the experts have warned that meme coins are largely worthless, and people who put their money into them know well that they should expect nothing in return for their investments.

At the same time, the crypto industry seems to be at a pivotal moment in its history, making the transition from youthful mistakes to maturity. 

And dogecoin, the most popular of the meme coins, is about to become a digital currency with utility.

Where Did Dogecoin Come From?

Dogecoin features the image of the Shiba Inu dog as its logo and namesake. It's considered the first of the meme coins, which are inspired by memes or have some humorous characteristic.

It was created in 2013 by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a joke, saying that the coin was making fun of the wild speculation in cryptocurrencies.

The cryptocurrency has been strongly supported by the entrepreneur Elon Musk, who recently declared that he still holds his dogecoins. Tesla  (TSLA) , SpaceX and Boring Co., three of the billionaire's four companies, currently accept dogecoin as payment for their merchandise.

Dogecoin Finds Its Utility

Developers just launched what is called Dogechain, or layer-2 for dogecoin, a platform that will enable the development of decentralized finance (DeFi) applications, the creation of nonfungible tokens (NFTs), decentralized applications (dapps) and games. 

With the new Dogechain, investors holding dogecoins no longer will need to exchange them for other cryptocurrencies, like bitcoin and ethereum, to trade on decentralized exchange platforms.

This ecosystem will enable developers to produce projects that have concrete uses in daily life. 

This long-awaited change in dogecoin has led fans of the coin to boost its price. Over the past seven days, dogecoin prices have jumped nearly 20% to $0.083231, according to data firm CoinGecko

At the same time, the price of bitcoin, the most popular cryptocurrency, gained only 2.1%.

With a capitalization of just over $11 billion, dogecoin is the 10th cryptocurrency by market value. 

The lift in dogecoin has pulled rival Shiba Inu along with it. Shiba Inu gained almost 57% to $0.00001616 in the past seven days. Shiba Inu is is set to launch its own layer-2 scaling network, called Shibarium.

'Wild West'

Important to note is that the new Dogechain has no connection to the original dogecoin project. The dogecoin foundation retweeted a post saying that neither it nor the founders of dogecoin had anything to do with Dogechain.

This calls for caution because similar moves have taken place on other platforms, like BNB Chain, formerly Binance Smart Chain or BSC. These have made creating tokens easy -- but precisely this simplicity has enabled bad actors to develop scams in which someone creates and sells a token and then disappears with investors' money.

"Be careful: This is a new chain and it’s literally the Wild West on Dogechain," warns Roc Zacharias, a co-founder of the well-known platform Polygon DEX QuickSwap, who describes himself as a core contributor to Dogechain. 

"It’s definitely risky stuff, similar to BSC when it first launched. New frontier with lots of potential, but also lots of risk! Be safe and have fun out there friends!"

It is common to have a network to develop blockchain technology and link platforms. 

But one question surrounding Dogechain is whether the team behind it will deliver on the big promises investors are currently excited about.

On social media, crypto investors like Roger Avax from Aventures Dao prefer to see Dogechain as a window to have fun buying and trading funny-named tokens and silly projects.

"How to Play **NOT INVESTMENT ADVICE**," Avax posted on Twitter. "Here are the random tokens I bought in the last 1.5 days w/ good outcomes so far- consider selling at local tops & reinvesting in new tokens. more lotto tickets means more shots at moonshot 100xs."

Avax adds that he has no illusions about his probable future gains.

"Obv [iously] lots of wild speculation & sh*tcoins, but sorta like the 1st big festival after being locked down for 2 yrs. prolly bad for you but its a lot of fun," the investor said.