Transaction volumes on Dogecoin (DOGE) briefly outpaced Litecoin and Bitcoin earlier this week.
Dogecoin (DOGE) Transaction Volume Reaches Record Level, Overtakes Bitcoin
Dogecoin's daily trading volume peaked tenfold compared to the daily average earlier this week, following the launch of a new mechanism that enables token issuance on the Dogecoin blockchain.
The network had over 645,000 transactions on Sunday, according to data from BitInfoCharts.
Historical data shows that Dogecoin is generally traded around 20,000 daily. However, the implementation of the DRC-20 token standard on May 9 led to a spike in network activity.
These standards allow developers to issue tokens that receive network fees in the form of Dogecoin (DOGE).
This adds to the value proposition for Dogecoin and paves the way for potential decentralized finance (DeFi) services built on the blockchain.
However, it is important to note that trading volume has returned to previous levels as of today. This may indicate a temporary spike caused by the initial excitement surrounding the new token issuance mechanism.
The increase in volume indicates an increased level of participation and activity within the Dogecoin community.
Despite the increase in transactions, not everyone is happy with the DRC-20 token distribution. Some experts point out that the DRC-20 can cause network congestion and move away from Dogecoin's intended use as a daily currency.
High fees and network congestion are legitimate concerns for any blockchain as they can make the network expensive and slow for everyday users, reducing adoption plans.
*Not investment advice.