Staking-enabled networks use a Proof of Stake (PoS) consensus system. Investors can currently stake a variety of assets, including Ethereum, Cardano, MATIC, Solana, BNB, Tron, Polkadot, Cosmos, Avalanche, etc. Staking payouts claim that for the top 10 assets by staking market cap, the annual payouts range from 2% to 20%.
However, Dogecoin uses the Proof of Work (PoW) consensus system to ratify transactions on its Blockchain. This asset cannot, therefore, be staked in the conventional decentralized manner. Notably, a poll was recently posted on X (previously Twitter) by Marshall Hayner, CEO @ Metallicus and Co-Founder of FBBT Holdings, asking users if they would stake Dogecoin if they had the chance. 2,200 persons cast ballots, and 60.1% of them were against it.
Related Reading: Dogecoin (DOGE) Poised to Break $0.1 Barrier Amid Rising Volatility
Reason for DOGE Community Refusal
The cryptocurrency community has frequently stated its scepticism toward PoS. Because the distribution of capital is “massively skewed” toward the top creamy layer, some people argued that the PoS system is nothing more than “rule by the rich.” Others keep emphasizing the need for projects to consider their other options in addition to PoS.
Tokens must typically be staked by locking up assets for a set amount of time, preventing transfers or supplying market liquidity. People also believe that there are less applications for the underlying blockchain the greater the staking ratio. Many people pointed out that staking DOGE is impossible because it is utilized for transactions.
Mishaboar, a developer of Dogecoin, opposed this idea as well. He said that if Dogecoin switched to Proof of Stake, he might leave the project. He claimed that PoS is not a practical strategy when a significant portion of the supply is owned by exchanges. Mishaboar continued, “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.”
Dogecoin to Swap to PoS?
Lower energy consumption and quicker transactions are two of the major benefits of PoS for a currency, according to Mishaboar. However, he emphasized, most transactions do not actually require that. On the other hand, those that demand speed can get it with different options like payment channels, integration with payment providers, etc.
However, the authenticity of new transactions is typically guaranteed by staked tokens. As a result, community experts have repeatedly stated the reasons why projects must switch to PoS. Vitalik Buterin, a co-founder of Ethereum, recently stated that he anticipates Dogecoin to switch to this system eventually.