Is Dogecoin An Erc20 Token? – All You Need To Know
What is an ERC20 Token?
Firstly, ERC means Ethereum Request of Comment. It is an official protocol for proposing improvement in the Ethereum network. The “20” means the proposal identifier, it is a common standard for creating tokens.
ERC20 is the most significant Ethereum token used as smart contracts on Ethereum. Ethereum’s ERC20 standard enabled thousands of businesses to create tokens, resulting in an explosion in the ways blockchain technology can be used.
Dogecoin is does not run on the Bitcoin network and so, Dogecoin is not an ERC20 token
I’ll explain how this has resulted in the creation of dozens of other currencies.
Ethereum, like Bitcoin, is a platform as well as a blockchain. This means that other tokens can run on it, as well as decentralized applications (dApps).
📌 Dogecoin is not an ERC20 token because it does not run on the Bitcoin network, the BabyDoge is an ERC20 token running on the Binance Smart Chain Mainnet.
📌 renDOGE, which is enabled by the Ren Project, allows investors to trade DOGE on decentralized exchanges.
📌Some tokens, such as Uniswap’s UNI token, are expected to remain ERC20 tokens; however, other cryptocurrencies, such as Binance Coin, have since switched to their blockchains.
📌 ERC20 tokens are the most commonly used tokens on the Ethereum network. They are known as utility tokens because they are intended to be used to pay for services.
Ethereum has a set of standards known as ERC20 that allow developers to create their own tokens that can be used within the Ethereum network. It has made it easier for businesses to develop blockchain products rather than creating their own cryptocurrency.
Some tokens, such as Uniswap’s UNI token, are expected to remain ERC20 tokens; however, other cryptocurrencies, such as Binance Coin, have since switched to their blockchains.
Features of ERC20 Tokens
On the Ethereum network, ERC20 tokens are the commonly used tokens. They are known as utility tokens because they are intended to be used to pay for services. They can also be used to make purchases of goods and services.
These tokens are:
Fungible – The code of each token is the same as any other although transactions histories can be used to identify and segregate tokens.
Transferable – They can be sent from one address to another.
Fixed supply – A fixed number of tokens must be created so that developers cannot issue more tokens and raise the supply.
renDOGE is an erc20 token on the Ethereum blockchain that is an exact representation of Dogecoin. renDOGE, which is enabled by the Ren Project, allows investors to trade DOGE on decentralized exchanges. This enables renDOGE owners to trade independently, without assisting large corporations, and anonymously.
Most people should not be concerned about using renDOGE. Many people who trade renDOGE do so purely on principle; investing through centralized exchanges can fund large corporations, which is the polar opposite of what many cryptocurrency investors want.
Keeping currency decentralized, independent, and anonymous is arguably the primary reason for the existence of cryptocurrency.
Everyone who doesn’t care about that aspect of things can continue to use Dogecoin with confidence.
Switching to renDOGE is the way to go for anyone who does not want to help established systems and businesses. It’s also worth noting that users may have to switch to using decentralized apps.
This may necessitate learning a new UI and/or transferring funds, but this is likely a small price to pay for those who are interested.
What ERC20 Did for Blockchain
Ethereum’s developers noticed that dozens of people were creating their own tokens within their ecosystem. But there was a problem: interacting with those tokens was becoming increasingly difficult.
ERC20 was born when Ethereum decided to create a standard, a set of rules that every token on the network had to follow.
How to Buy and Store ERC20 Tokens
Many ERC20 tokens are available for purchase on cryptocurrency exchanges like Coinbase and Binance. You’ll also need a cryptocurrency wallet that can hold Ethereum tokens, such as MetaMask, or a hardware wallet.
What Cryptocurrencies are Based on the ERC20 Standard?
More than 300 cryptocurrencies run on the Ethereum network and are based on the ERC20 standard. Here are a few examples:
RenDOGE – This is a cryptocurrency that runs on the Ethereum platform and is a fork of Dogecoin; its last known price was $0.04. It is currently trading on five different markets.
OmiseGO – This is a decentralized network that provides a payments solution for banks and other financial institutions. It is based on Ethereum and employs the plasma protocol to ensure that the network runs quickly. The token sales raised more than $25 million for the Thailand-based company.
Ox – Ox is a decentralized exchange protocol that is open to all. A system of smart contracts, to which Dapps can connect, executes trades. This gives them access to liquidity.
Augur – Augur wants to make it possible for anyone to speculate on derivatives, but it does so with a mechanic that rewards the “wisdom of the crowd.”
Wrapped Bitcoin (WBTC) – An ERC20 token that is backed 1:1 by Bitcoin and can be used as collateral in decentralized finance (DeFi) applications, increasing liquidity.
What are the Disadvantages of ERC20 Tokens?
Low throughput – The Ethereum network has become congested as a result of the high demand for dApps such as CryptoKitties (which has since moved to its Flow blockchain). When this occurs, the network slows and transactions become more costly.
Transactions are slow – Because the block time is around 14 seconds, transactions can take up to a minute to process. This may be adequate for some applications but too slow for others.
Ether – When transactions are made, a second cryptocurrency known as Ether is required to pay transaction fees. As a result of dust on various platforms, this can add both time and cost.
The ERC20 Token’s Future
Every blockchain platform claims to be the next “Ethereum Killer,” but Ethereum has managed to maintain its position just behind Bitcoin.
ERC20 tokens are widely used, and their popularity will continue as long as Ethereum exists. If anything, their greatest threat comes from within new Ethereum standards. Natural selection will require them to be the fittest to survive.
Frequently Asked Questions (FAQ)
1. Does Dogecoin have a maximum cap?
At the moment, Dogecoin has no cap as it is infinite. The Doge blockchain adds 10,000 coins every minute into the network and at that rate, 5.3 billion coins are added annually.
2. How do I get an ERC20?
You can purchase an ERC20 using Bitcoin or Ethereum as this is the first step to buying ERC20.
3. What is the best ERC20 Wallet?
There are a good number of ERC20 wallets out there. A few of them include Trezor, MyEtherWallet, MetaMask, Coinomi, MyCrypto, etc.
4. Can you trade ERC20 on PancakeSwap?
Yes, you can but if you want to trade ERC20 tokens on PancakeSwap, you will need to wrap them on the Binance Bridge to turn them into BEP20 assets.
Dogecoin, being an ERC20 token just goes to show that the altcoin is fast becoming one of importance. Hence with this event, individuals can expect a future improvement and an increase in the value of Doge.