Thanks to Elon Musk's acquisition of Twitter, Dogecoin (DOGE 1.12%) is suddenly one of the hottest cryptos around. This Musk favorite is already up more than 100% over the past seven days, and speculation continues to build that Twitter will somehow integrate Dogecoin into its platform as a payment option. Given all the buzz surrounding Twitter and Dogecoin, it's perhaps not surprising that some cryptos are now trying to partner with Dogecoin.
Over the weekend, Charles Hoskinson, a co-founder of Cardano (ADA 0.05%), tweeted out a poll asking his followers whether he should pitch a Cardano-Dogecoin alliance to Twitter. Such a move would require Dogecoin to migrate from its network to the Cardano blockchain, which is superior to Dogecoin's.
If the response in the poll is overwhelmingly positive, Hoskinson says, he would put together a proposal for "a post-quantum ultrafast, and identity enabled doge sidechain of Cardano custom built for social networks." Is this an idea so crazy that it might just work?
Dogecoin is hot, Cardano is not
One way to interpret this proposal is that Cardano is making a last-ditch attempt to remain relevant. The price of the crypto is down nearly 80% over the past 12 months, and there is now very real concern that it might fall below $0.30 after trading in the $0.50 to $0.60 range for much of the past six months. Dogecoin's recent surge has vaulted it ahead of Cardano in terms of market capitalization. On top of that, the market's response to Cardano's big tech upgrade in September (the Vasil hard fork) has been a collective "meh."
Image source: Getty Images.
Ahead of the upcoming Cardano Summit later this month, Hoskinson might be making a desperate move to integrate Dogecoin as a sidechain to have some positive talking points for the Cardano faithful.
From this perspective, a Dogecoin-Cardano alliance would help Cardano but offer little to no value for Dogecoin. It does seem strange that Cardano -- a crypto known for a cautious, academic approach to blockchain development -- is suddenly courting a silly meme coin.
Cardano is hot, Dogecoin is not
But let's flip the script. It could be that Cardano is throwing a lifeline to Dogecoin, and that Cardano actually has the upper hand. It has a much faster, much more robust proof-of-stake blockchain capable of handling smart contracts, non-fungible tokens (NFTs), decentralized applications, and decentralized finance protocols. In contrast, Dogecoin still operates a relatively slow proof-of-work blockchain that badly needs to be upgraded to proof of stake. So Cardano clearly has the superior blockchain.
While it's unclear how long or how costly a Dogecoin sidechain integration might be, Hoskinson has said that he would do the integration for free. Most likely, Twitter has its hands full with content moderation and other related issues right now, so it might not have time to even consider a Dogecoin integration until 2023 at the earliest.
From this perspective, Cardano is doing Twitter a favor by keeping a popular meme coin afloat. A Dogecoin-Cardano alliance might help Dogecoin considerably, but provide little or no value for Cardano.
A win-win for Cardano and Dogecoin
One of the hashtags used by Hoskinson in describing the proposed Dogecoin alliance is #QuantumDoge. This suggests an outcome in which Dogecoin gains all of the features that it has been lacking for so long and makes a quantum leap into the future.
Yes, Dogecoin would have to adjust to its new status in life as a sidechain of Cardano, but in return, it would gain functionality like smart contracts and NFTs. In short, Dogecoin would become a token on the Cardano blockchain, rather than a coin with a blockchain of its own. In doing so, it would transform into #QuantumDoge.
From this highly optimistic perspective, the Dogecoin-Cardano alliance is as close to a merger of equals that you would ever find in the crypto world. In terms of market capitalization, both coins are almost exactly equal.
With this alliance, Dogecoin would shore up some of its weaknesses, while Cardano would have the type of showcase blockchain project that it has been looking for to attract more users and developers to its blockchain ecosystem. If Twitter then partners with a combined Cardano-Dogecoin, it would create even more value.
How will Twitter respond?
Right now, 80% of Twitter respondents have overwhelmingly voted in favor of a Dogecoin sidechain integration. So it looks like Hoskinson might actually pitch Twitter on the proposed alliance.
Will Elon Musk prefer to focus on a Dogecoin integration of his own, or will he find the Cardano offer more compelling? If you're a Cardano investor, you better hope that Hoskinson can pitch Musk (aka "The Dogefather") an offer he can't refuse. That might just be the only way to get the price of Cardano headed higher in 2023.
