Barking Up The Wrong Tree? Dogecoin To Venture Into DeFi, Launches Dogechain Testnet To Compete With Ethereum

Dogecoin DOGE/USD announced the launch of its Dogechain testnet to facilitate the testing of decentralized applications (dApps) prior to mainnet deployment and network evaluation.

What Happened: On June 15, Dogecoin announced that it would be launching its own testnet which would serve utility to the testing of dApps and optimizing functionality.

Dogecoin works upon the IBFT Proof-of-Stake Consensus which facilitates user participation. Thus, deploying the testnet would allow users to be incentivized to test out dApps. Furthermore, its DeFi ecosystem will be enhanced via the advancing of smart contracts and further construction on current protocols. Dogecoin also has cross-chain compatibility, allowing the native token to be used across the ecosystem. Creating a testnet endeavors to optimize all utilities across the Dogecoin ecosystem while maximizing user utility.

Why It's Important: While Dogecoin’s testnet looks to bring large-scale utility to the network, it is competing with Ethereum's ETH/USD testnet and past successes, which will be a considerable hurdle.

Fundamentally, a testnet would benefit Dogecoin as it would facilitate the efficient exchange of NFTs via the DOGE token. It would create and enhance the building of DAOs, building the community. It would also boost the community’s DeFi utility, creating possibilities for liquidity mining, lending and borrowing.

But, given the Ethereum ecosystem’s numerous work with its testnets, Dogecoin would be comparatively disadvantaged with regard to the ecosystem’s liquidity, building of dApps, as well as active users.

As Dogecoin proceeds to develop its blockchain, networks such as Ethereum have a considerable upper hand, having past experience and success with building its testnet.

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