Dogecoin: 60% Users Not in Favor of Staking DOGE

Networks that allow staking implement a Proof of Stake [PoS] consensus mechanism. At the moment, investors can stake several assets, including Ethereum, Cardano, MATIC, Solana, BNB, Tron, Polkadot, Cosmos, Avalanche, etc. According to Staking Rewards, the annual rewards vary in the 2% to 20% bracket for the top 10 assets [by staking market cap].

Dogecoin uses the Proof of Work consensus mechanism to validate transactions on its blockchain. As a result, this asset cannot be staked in the traditional decentralized way. Marshall Hayner, CEO at Metallicus and Co-Founder of FBBT Holdings, recently posted a poll on X [formerly Twitter] asking users if they would stake Dogecoin if that option was available to them. Among the 2,200 people who voted, 60.1% were not in favor of DOGE staking.

If Dogecoin was stakeable, would you stake it? $DOGE ?

— Marshall Hayner (@MarshallHayner) August 20, 2023

Also Read: Here’s How Litecoin Provides Security to the Dogecoin Network

Is PoS a feasible option for Dogecoin?

People from the crypto community have time and again expressed their cynicism towards PoS. A section of people believed that the PoS system is nothing but “rule by the rich” because the distribution of capital is “massively skewed” to the top creamy layer. Others keep pointing out that are several other options other than PoS, and projects need to explore them as well.

Staking usually requires tokens to be locked up for a certain period, prohibiting them from being transferred or providing active liquidity in the market. Consequentially, people are also of the opinion that the higher the staking ratio, the lesser the use cases for the underlying blockchain. Since DOGE is used for transactions, several highlighted that staking this asset is unfeasible.

Dogecoin developer Mishaboar was also against this proposal. He stated that he might step away from the project if Dogecoin transitioned to Proof of Stake. He said that PoS is not a sensible approach when a huge chunk of the supply is held within exchanges. Mishaboar added,

“Research on alternative consensus mechanisms is no problem if done responsibly, relying on solid data, and avoiding hype. But it seems most PoS chains have underdelivered, are obscenely centralized and run by wealthy developers holding huge bags, have failed catastrophically, and/or are a pain to use.”

He also explained that one of the biggest advantages of PoS for a currency is lower energy usage and faster transactions. However, he pointed out, for most transactions that is not essentially needed. Contrarily, for the ones that require speed, that could be achieved with other solutions like payment channels, integration with payment providers, etc.

Also Read: Friend.tech Earns $1.42 Million Fee: Beats Bitcoin, MetaMask, Solana

The flip side

Conventionally, staked tokens act as a guarantor of the legitimacy of new transactions. As a result, experts from the community have time and again expressed why projects need to shift to PoS. Ethereum Co-Founder Vitalik Buterin recently said that he expects Dogecoin to swap to this mechanism at some point. He added,

“As PoS matures, I expect it to increase in legitimacy.”

On the future of POS, @VitalikButerin says every network SHOULD move over to POS but not all will.

“As proof of stake matures, I expect it to increase in legitimacy. I hope that @zcash moves over. I am also very hopeful that @dogecoin is going to move over at some point.”
— Eleanor Terrett (@EleanorTerrett) September 23, 2022