Dogecoin Transaction Count Rises 60X, But Why Are Prices Down?
May 22, 2023Dogecoin’s on-chain transaction count is up more than 60X from roughly 20,000 transactions as of May 1 to over 1.20 million on May 20, BitInfoCharts data shows.
60X Spike In Transaction Count
The present spike represents a 60X expansion in the Dogecoin transaction count, a noteworthy development primarily due to the launch of Ordinals on the proof-of-work blockchain.
The spike in Dogecoin’s transactions coincided with the launch of Ordinals on May 10. With Ordinals now on Dogecoin, another proof-of-work blockchain using the same consensus style as Bitcoin, users can create a new token based on the DRC-20 system. These tokens represent unique assets like texts, images, or videos. Crucially, users don’t have to use smart contracts to mint them.
However, despite the exponential increase in transaction count, DOGE prices are stable, moving horizontally, and relatively unchanged in the last three weeks. The coin is also down 31% from April 2023 peaks.
Related Reading: Dogecoin Multiple Attempts At $0.10: Will The Barrier Finally Be Broken?
Dogecoin is the first meme coin created as a joke and launched in 2013. But over the years, it has gained a significant following and endorsement, including from Elon Musk, the billionaire technology investor.
DOGE, the native currency of Dogecoin, is one of the largest cryptocurrency networks whose market capitalization places it among the top 10 coins.
As of May 22, DOGE had a market capitalization of $10.1 billion and is more valuable than Polygon, an Ethereum sidechain, and Solana, a smart contracting platform, according to CoinMarketCap data.
Ordinals On Dogecoin
The DRC-20 standard is inspired by the more popular ERC-20 standard in Ethereum. Tokens complying with the DRC-20 on the Dogecoin platform are fungible and can be transferred.
With these tokens, users can “inscribe” files, attaching them to the smallest unit of Dogecoin called “shibes.” These unique files represent various assets, including texts, images, videos, applications, and much more.
Inscribed files, confirmed by Dogecoin miners and added to the blockchain, are unique and comparable to non-fungible tokens (NFTs).
The rise of DRC-20 tokens on Dogecoin explains why there has been a sharp spike in the number of on-chain transactions over the last 12 days, as trackers show.
To illustrate, BitInfoCharts data shows that the number of on-chain transactions on May 10 stood at 48,500. However, the number has steadily risen in the last 12 days, peaking at 1.2 million on May 20.
Dogecoin Transaction Count | Source: BitInfoCharts
Considering the popularity of NFTs on proof-of-work blockchains like Bitcoin, Litecoin, and Dogecoin, transaction counts on each network will only continue rising.
Related Reading: Bugs Discovered On Ordinals Protocol As Bitcoin Rips Above $30,000
Ordinals, the team behind the BRC-20 standard that’s now being replicated on Dogecoin, aims to expand the use case of Bitcoin. In their view, Ordinals believe proof-of-work blockchains offer better security and decentralization, allowing NFTs to thrive.
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