2021 was a great year for the cryptocurrency ecosystem. Finally, they reached the mainstream media and Dogelon Mars (from now on, simply Dogelon) is a consequence of the twelve months we have just gone through.
The past year has been an impressive period in terms of the diffusion, adoption, dissemination of new networks, profit potential and proliferation of new solutions provided by blockchain technology.
While most of these points are positive for the ecosystem, there are also those that can be detrimental in the medium or long term.
In this article, in addition to telling you what Dogelon is, I analyze the impact that this type of cryptocurrency has on its environment, leaving aside certain founding principles of the ecosystem.
What is Dogelon?
When we talk about Dogelon, we refer to a cryptocurrency created in the Ethereum network, under the ERC-20 standard, which has a fixed total supply and a price that varies according to the pressure exerted by its buyers and sellers.
The creators of this cryptocurrency took advantage of the popularity of two renowned figures in the crypto world, such as Elon Musk (founder of Tesla) and Dogecoin, to give visibility to their project.
Although the promise, tied to its birth, was to return to users those losses caused by “scammers” and “rug pulls“, so far the usefulness of this token is null, beyond the option of making profits by trading (buying and selling) with it. It is definitely a “meme coin”.
What is a memecoin?
This concept, within cryptocurrencies, was born from the hand of Dogecoin. Initially, its creators took the image of the most famous meme on the Internet, the cute little dog of the Shiba Inu breed that with its particular expression generated a furor in the networks, and created a cryptocurrency based on it.
According to its creators, Dogecoin was born as a joke. The coin was created and launched to the market with no major expectations. With a very high issuance rate and an infinite supply, users began to give it certain uses, such as its free distribution in different “faucets” or as a prize for participating in different games.
The first few years of Dogecoin went by without much fanfare, being used for trading by users who wanted to make a profit thanks to its volatility. Until Elon came on the scene.
The explosion of memecoins
At the end of 2020 and the beginning of the previous year, Dogecoin’s price and market capitalization boosted unexpectedly. Partly thanks to large investors buying large amounts of Doge and partly thanks to Elon’s suspicious tweets about this coin.
In short, new millionaires emerged thanks to these market movements, as well as their counterpart, people who invested and saw how their capital was diluted.
Taking advantage of this vortex for “cryptocurrencies with dog faces”, Shiba Inu, (memecoin similar to DogeCoin without any utility) and another product of this furor (the focus of this article) called Dogelon appeared on the market.
Some details about Dogelon
So, we know that Dogelon is a memecoin, which to date has no utility other than the possibility of being exchanged in different centralized and decentralized exchanges.
When creating this cryptocurrency, its “parents” decided to combine the two most important figures in relation to this type of coins, Elon Musk and Dogecoin.
They also followed common parameters of this segment when launching these tokens. At launch, as with Shiba Inu, the creators of Dogelon sent half of the ELON tokens to an address on the Ethereum network belonging to Vitalik Buterin and the rest to a Uniswap pool for those who wished to buy them.
The strategy of sending half of the ELON tokens to Vitalik, in the Ethereum creator’s own words, follows the following sequence:
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- They send cryptocurrencies to their public addresses that anyone can see.
- They post on their networks “Vitalik has our token, he is one of ours”.
- Many users are surprised by this news and turn to the market to buy the token in question.
- The price rises significantly.
- Many will make money and many others will lose it.
A special feature of Dogelon
Despite having mentioned that Dogelon does not have substantial innovations that differentiate it from the rest of the memecoins, there is a differential point in its structure that needs to be mentioned.
In contrast to Dogecoin or Shiba Inu, Dogelon has a fixed supply. Since the amount to be issued is not unlimited, it is possible to better foresee its future value or, at least, to avoid the loss of value due to inflationary issues.
As a negative consequence, we find that this quality has led analysts (whose intention was to leverage their holdings) to provide assumed target prices for Dogelon, justifying their forecast in the limited supply.
The impact of Dogelon and memecoins
It is far from the objectives of this blog to give investment advice or to present a biased view on the topics discussed here. The aim is always to educate readers by providing tools to invite them to subsequently conduct their own research in order to make informed decisions.
Therefore, my strict personal view on the subject comes into play here.
It is not possible for me to disdain the concept of speculation. Given the economic and social context in which we live, we constantly find ourselves speculating, it is part of the human essence, immersed in this society.
When deciding where to vacation, what meals to eat or what shampoo to buy, we are speculating about possible results or “outputs” that our decisions may generate. Consequently, I do not consider speculation “per se” as an evil.
Now, focusing on the crypto ecosystem, where my alarm bells go off and my red flags fly, is when speculation is the ulterior motive. In the case of memecoins, when it comes to mounting them on a scale, I consider the “pain” they cause versus the “happiness” they bestow, because of this pure speculation, to have much greater weight.
Different sides of the same coin
When I talk about pain, I mean economic losses, and by happiness I mean voluminous profits as a counterpart. We have already seen several newspaper headlines, where famous company executives announced their resignations after becoming millionaires by investing in memecoins, while devastated users suffered in the shadow of this news.
The impact they have on the ecosystem, as a whole, is reflected in the tarnish they display on the reputation of the ecosystem. When Satoshi created Bitcoin, he did it thinking of creating, as a friend says, a better money, a superior money. And I consider that memecoins are not. Since, beyond the speculation with its price, they do not have any utility that makes use of the enormous potential that blockchain technology offers us.
A look into the future
After this analysis of Dogelon and the cryptocurrencies in its category, my conclusion about its future is similar to the one I have with the crypto world in general.
The future of Dogelon depends on its community and random factors beyond our control. Perhaps it will be a new case of “pump and dump” through publications on the networks and organization through secretly coordinated groups.
Or perhaps your community will find uses for this currency that will force me to gladly rewrite this article.
