[News Inside Companies] Musk's Twitter Acquisition Sparks 40% Surge... Dogecoin Foundation Started as a Joke

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Elon Musk, CEO of Tesla, has brought a new breeze to the cryptocurrency market by securing management rights of the social networking service (SNS) Twitter. Musk has often expressed support for Dogecoin, raising expectations that Dogecoin would be introduced into Twitter's payment system, causing its price to surge. As Dogecoin's price rose, interest in the Dogecoin Foundation, which created the cryptocurrency, naturally increased.

The Dogecoin Foundation was established in 2014 by team members involved in the Dogecoin project. Its purpose was to provide updates, authority, and decision-making for the Dogecoin project. The foundation explained on its website that it is a nonprofit organization established to support Dogecoin, protect trademarks, and develop future strategies.

The Dogecoin Foundation's flagship cryptocurrency, Dogecoin, started as a kind of joke. Billy Markus, a developer from the United States, and Jackson Palmer from Australia created an open-source coin based on Litecoin in 2013 to mock the cryptocurrency craze at the time, using the Shiba Inu dog, which was popular online, as a symbol. They combined 'Doge,' meaning dog, with coin to name it Dogecoin.

Dogecoin's characteristic is that its issuance is unlimited. It can also be mined using a proof-of-work (PoW) method similar to Bitcoin. Dogecoin can be obtained through mining, which involves participating in the blockchain by performing computer calculations.

In fact, the Dogecoin Foundation was once dissolved in 2014, indicating that the birth and issuance of Dogecoin itself were not given great significance. The foundation, which had ceased activities, was relaunched in August 2021. Since then, Dogecoin's price has surged whenever Musk mentioned it, rapidly growing to rank within the top 10 in market capitalization. With such strong demand and remarkable growth in the coin market, the foundation announced that it had reestablished the foundation to support the Dogecoin ecosystem and community. Dogecoin's popularity remains strong, and following the news of Twitter's acquisition, Dogecoin's price surged over 40% from around $0.060 on the 25th of this month to $0.084 within three days.

[Image source=Reuters Yonhap News]

At the time of its relaunch, the Dogecoin Foundation recruited advisors with impressive backgrounds. Vitalik Buterin, the founder of Ethereum, the leading altcoin, and Jared Birchall, CEO of Neuralink and a close associate of Musk, joined as advisors. Markus, the co-developer of Dogecoin, was also recruited. With Musk's close associates participating in the foundation, there were expectations that Musk would exert influence over the Dogecoin ecosystem. Musk also pushed for the use of Dogecoin as a payment method for Tesla.

The Dogecoin Foundation also announced a Dogecoin roadmap. This was the first self-published roadmap since the foundation's establishment, aiming to go beyond a meme coin. It included plans for staking using a proof-of-stake (PoS) method, where cryptocurrencies are deposited into the blockchain network to participate in platform operation and trust verification in exchange for coin rewards, website reorganization, and improvements to the Dogecoin wallet.

However, the Dogecoin Foundation also faced difficulties due to unrelated issues. In August, Dogechain, known as a Dogecoin layer 2, became a hot topic, causing Dogecoin's price to surge over 10%. It was promoted that Dogecoin holders could use Dogechain for non-fungible tokens (NFTs), decentralized finance (DeFi), and gaming, which drove the price up. However, Dogechain was actually developed on Polygon, an Ethereum sidechain, and was found to have no connection with the Dogecoin network or the Dogecoin Foundation. The Dogecoin Foundation stated on Twitter that the foundation and the original developers are all unrelated to Dogechain.

Additionally, the Dogecoin Foundation has faced issues with about 100 unrelated projects misusing its name. To prevent unauthorized use, it has registered its logo and trademark with the European Union (EU).