Is Dogecoin a Defi Coin? – All You Need to Know

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Is Dogecoin a Defi Coin? – All You Need to Know

The Meme Inspired Dogecoin

The meme-inspired Dogecoin is still a popular cryptocurrency asset, still ranking among the top 10 cryptocurrencies. Despite making headlines this year due to its volatility, Doge is still regarded as a joke by many serious investors.

This is due in part to its insecurity, lack of liquidity and utility, and potential infinite supply, which worries skeptics. Especially those who are not involved in the cryptocurrency space.

Is Dogecoin a Defi Coin? – All You Need to Know

Key Takeaways

 📌 Tau Doge or Doge is a fictitious asset or a tokenized version of another cryptocurrency that allows Doge to be swapped and traded cross-chain.

 📌 Introducing Dogecoin to DeFi, and eventually, other cryptocurrencies could drive mass adoption by introducing positive features to the cryptocurrency market.

 📌 The Dogecoin collateral is kept in a network of decentralized nodes known as dark nodes, rather than in a centralized or trusted custodial setup.

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Proof of work assets has been introduced into decentralized finance (DeFi) markets as one solution.

Doge is a Dogecoin wrapped in a sleeve that allows users to reap the benefits of DeFi. For example, staking and earning rewards by increasing market capital efficiency and liquidity. It brings dogecoin to DeFi as a rewardable asset that puts Doge to work.

SEE ALSO: Is Dogecoin a Shitcoin? – All You Need to Know

SEE ALSO: Is Dogecoin An ERC20 Token? – All You Need To Know

DeFi, The Dogecoin Solution

The hashrate-backed wrapped version of the Doge was introduced to meet the growing demand of the doge community looking for more productive ways to hold Doge.

This wrapped token, known as tau Doge or Doge, is a fictitious asset or a tokenized version of another cryptocurrency that allows Doge to be swapped and traded cross-chain.

Doge allows users to do more with their Doge, such as earning rewards and staking it on DeFi apps like PancakeSwap.

Because Doge adds more utility to Dogecoin through more use cases, capital efficiency and liquidity are significantly increased when compared to Doge that is only stored in a wallet.

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The Tau Protocol mechanism enables users to participate in DeFi with any token in a wrapped form.

Linking DeFi and Proof of Work

Since the introduction of bitcoin, cryptocurrency has come a long way, introducing thousands of new assets to the market.

As a result, the reputation of cryptocurrencies is heavily influenced by factors such as volatility, utility, and liquidity. However, for mainstream adoption to occur, these issues must first be addressed.

DeFi enters the picture at this point. People can actively use their favorite tokens to earn rewards that they would not have received otherwise using a variety of tools. This contributes to closing the gap between hash rate assets and DeFi.

As a result, solutions leveraging this, such as those that link DeFi and proof of work tokens like Doge, help to increase utility and liquidity while also mitigating volatility.

Introducing Dogecoin to DeFi, and eventually, other cryptocurrencies could drive mass adoption by introducing positive features to the cryptocurrency market.

Dogecoin owners can now easily borrow against their Doge holdings and spend their funds in the DeFi ecosystem.

SEE ALSO: 15 top US Companies that Accept Dogecoin as Payment

SEE ALSO: How Does Proof-of-Stake Improve Proof-of-Work?

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DeFi Project Ren and Dogecoin

The DeFi project Yesterday, Ren announced a new feature of its partnership with OpenDAO: Doge on the Ethereum network.

OpenDAO is an organization that is working to tokenize various assets on Ethereum to allow users to spend within the Ethereum network with less friction and barriers to entry.

DeFi loans are frequently low-cost or even interest-free, allowing users to accumulate value in one currency while using it as collateral to purchase DeFi products and protocols.

RenDoge is an ERC-20 coin that will be used to mint Stablecoins in the near future.

“Once OpenDAO’s audits are completed, users will soon be able to use their RenDoge as collateral to mint a dollar-pegged Stablecoin,” Ren explained.

With three new exchange listings and Pornhub integration, Dogecoin has seen a surge in activity in recent weeks. Elon Musk’s recent Dogecoin tweets are thought to be behind the renewed interest in Doge.

SEE ALSO: How To Accept Dogecoin As A Payment System On A Website

SEE ALSO: Best 5 Smart Contract Platforms for Polkadot DApp Dev

RenDOGE Issuance

When a user sends Dogecoin to a RenVM generated gateway address on the Dogecoin blockchain, RenDoge is created. That Dogecoin is locked, and the same amount of RenDOGE token is sent to an Ethereum blockchain wallet.

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The Dogecoin collateral is kept in a network of decentralized nodes known as dark nodes, rather than in a centralized or trusted custodial setup.

Usage

Users can trade, loan, or use RenDoge tokens as collateral on decentralized platforms based on the Ethereum blockchain once they receive minted RenDoge tokens in their Ethereum wallets.

Redemption

Users can redeem $Doge by burning RenDoge tokens on the Ethereum blockchain at any time. After the RenDoge token burn is confirmed, the locked Doge will be released to a designated Dogecoin address.

Minting and Redeeming

Before using any platform for minting or redeeming RenDoge, users must do their research.

Users can create Doge tokens on the Opendao or Linkswap platforms. They can use any Ethereum wallet, such as MetaMask, to log in and then navigate to the RenDoge section. When the user clicks mint, a gateway address is generated.

Users should send their Doge to this address. (Please keep in mind that a minimum amount (0.00000025) is required.)

When Doge arrives at that wallet, it automatically confirms and mints RenDoge. Users can then transfer the RenDoge to the Ethereum wallet used to sign in. Transaction fees must also be paid by users.

SEE ALSO: Dogecoin Mining Essentials: How to Mine Dogecoin on PC

Frequently Asked Questions (FAQ)

1. What Exchange is Dogecoin on?

Exchanges such as Coinbase are one of the platforms where you can get Dogecoin as most traders purchase Doge from them.

2. Can I buy Dogecoin on Uniswap?

Dogecoin is readily available for purchase on Uniswap.

3. What is Dogecoin worth right now?

Dogecoin at the moment is worth $0.3126.

4. Can Dogecoin still be mined?

Yes, Dogecoin can be mind at the moment but have it in mind that the earnings you would derive from mining will be very minute.

SEE ALSO: 7 Best Cloud Mining Contracts for Lucrative Returns

Final Thoughts

Thanks to the Ren project, Dogecoin can now be used on the Ethereum blockchain and access the DeFI network. Hence Dogecoin can now be transacted and traded on decentralized exchanges.

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