Dogechain, the newly launched unofficial Layer-2 solution for Dogecoin, will soon be upgraded to support the Proof-of-Stake (PoS) mechanism of verifying transactions. Simply put, the upgrade introduces staking functionality for users.
The official Twitter handle of the blockchain project revealed the plan, on 14 November 2022. During the upgrade, the tweet said, the network’s on-chain activity will be suspended for 12 hours. The upgrade is scheduled to take place at 3 PM UTC.
With the upgrade, the network is going to introduce a vote escrow staking model called veDC. When a certain amount of native Dogechain token, DC, is locked in, the staker get rewarded with an equivalent amount of veDC. The longer the lock-in period, the more veDC the user gets.
⚠️ Important Notice – Scheduled Network Upgrade
Frens, the Dogechain network has begun its transition to PoS at 3AM UTC, which will last ~12 hours.
🛑 To ensure a smooth transition, the chain will be halted and deposits, withdrawals, and transactions will be unavailable. pic.twitter.com/1L031XZIib
— Dogechain💜 (Giving away a Tesla) (@DogechainFamily) November 14, 2022
Dogechain was launched two months ago. It is called a pseudo Layer-2 because of two reasons. First, it is not officially affiliated with the team behind Dogecoin. Second, it runs on the Polygon Edge network, another Layer-2 built on the Ethereum. Dogechain is true to its identity as a Layer-2 solution though in its intention to support the functioning of Dogecoin (DOGE).
According to the white paper released at the time of its launch, Dogechain aims to expand Dogecoin’s utility. Specifically, Dogechain allows DOGE holders to access the ever-growing world of DeFi via its platform. To gain access, users have to stake their DOGE tokens by using smart contracts. In exchange, they receive wrapped DOGE (wDOGE) tokens that can be used for DeFi activities. These wDOGE can also be freely converted into DOGE when necessary.
The introduction of staking on Dogechain sparked off some initial recovery hopes for Dogecoin. However, Dogechain’s upgrade to the PoS network may not ultimately have any major impact on DOGE prices. DOGE is, in fact, trading lower by close to 8.78% over the last 24 hours.
Staking rewards on Dogechain will be liquid. That means they can be unlocked whenever the user wishes to do so. If the lock-in period is completed, users can burn the veDC and recover their DC tokens.
The Dogechain team has also released a staking guide, presenting in-depth information about the process.