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Dogecoin copycats are driving up Ethereum fees and vexing parts of the crypto community

By Mark DeCambre

If imitation is the most sincere form of flattery, then recent efforts to mimic dogecoin represent a genuine appreciation for the surge in demand for the meme assets. However, some market participants are concerned that a proliferation of dogecoin copycats might end badly for digital-asset investors.

One virtual, China-based cryptocurrency, Shiba Inu, which was minted recently and modeled as a "fun" crypto a la dogecoin , has seen its value surge in recent weeks along with dogecoin and some complain that it is having a negative effect on the broader crypto market.

The coin, which is sometimes described as an alternative, if not a rival, to dogecoin, has surged more than 1,500% in the past seven days. Even with this rally it was last changing hands at $0.00003296, according to crypto data site CoinMarketCap. com (link).

SHIB, which presumably derives its name from the fact that dogecoin is pegged to the image of a Shiba Inu dog, is now the 19th largest crypto in the world. Dogecoin stands as the fourth largest crypto, according to CoinMarketCap.com.

Creators of SHIB describe it "as an experiment in decentralized spontaneous community building," and have dubbed it a "DOGECOIN KILLER," on the website. (link)The creators are also trying to market two other cryptos loosely pegged to SHIB known as Leash and Bone.

Sound like a joke?

The Wall Street Journal wrote last week (link) that dogecoin's stratospheric run-up has spurred investors to turn their attention to "newer digital assets such as DigiByte, VeChain and SafeMoon" in the hunt for cheaper alternatives but the proliferation of dogecoin doppelgängers also seems to be feeding into the fervor for speculative gains.

A number of other coins being billed as dogecoin facsimiles also have been drawing attention. Those rivals include Kisha Inu, which trades under the ticker KISHU and is marketed (link) as "a community-focused, decentralized cryptocurrency with instant rewards for holders."

Dogelon Mars trades under the ticker ELON and refers to itself as "a fair universal currency for the people," on its website, trying to leverage from dogecoin's everyman appeal and Elon Musk's avid promotion of dogecoin as a viable virtual currency.

ELON's website says it shouldn't be thought of as (link) a "meme currency" and calls itself a "real project that will be constantly evolving. "Corgi Shiba-Inu (link), or COSHI, is thought of as another copycat.

Larry Cermak, director of research at crypto data provider The Block, on Monday said that the growth of dogecoin copycats was causing spikes in transaction fees.

"I don't have the exact numbers on this but anecdotally these new Doge copycats are taking a shit ton of recent block space and causing gas spikes to 300+," he wrote via Twitter.

(link)

Read:Elon Musk's SpaceX to send dogecoin-funded satellite to the moon (link)

The average cost of an Ethereum transaction on Monday was at $51.21, according to YCharts (link). That is up 83% from fees of $28.04 on May 9 and partly reflects the rise in price of Ethereum prices which have been trading at around record highs recently but also reflects increased use of the Ethereum blockchain networks, including applications run by the dogecoin rival projects that use the Ethereum blockchain.

On Monday, Changpeng Zhao, the CEO of Binance, the largest crypto platform by transaction volume, tweeted that demand for SHIB was skyrocketing and said that the platform ran out of deposit addresses due to appetite for the crypto.

(link)

Shib's recent listing on Binance and other platforms has also raised eyebrows in the digital-asset world. Appetite for dogecoin-like assets has been seen helping drive volumes at a number of crypto exchange platforms, including UniSwap, which has become a popular decentralized trading platform and its proprietary coin ranks No. 13 on the list of most-highly valued cryptos.

For its part, dogecoin's own run has cooled considerably after the highly anticipated appearance of Musk on "Saturday Night Live," which was viewed as a potential inflection point for the original meme currency. At last check, dogecoin was changing hands at around 50 cents, down from its recent peak at nearly 75 cents on Saturday.

The emergence of doge copycats is perhaps understandable considering the rise of dogecoin's price, which still retains a quintuple-digit percentage year-to-date return. By comparison, gold futures are down 3.1% in 2021, while the Dow Jones Industrial Average has gained nearly 12% so far this year, and the S&P 500 has advanced over 10% and the Nasdaq Composite Index is holding on to a 3.7% year-to-date gain, despite a bout of volatility (link) in the three main equity benchmarks on Tuesday.

-Mark DeCambre; 415-439-6400; AskNewswires@dowjones.com

 

(END) Dow Jones Newswires

05-11-21 2216ET

Copyright (c) 2021 Dow Jones & Company, Inc.

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