Dogecoin Is Finally Getting Serious About Offering Real Utility to Users. Here's What That Could Mean for the Price of DOGE.

Since launching in December 2013, Dogecoin (CRYPTO: DOGE) has had little purpose other than amusement. There have been brief periods of hype-driven success, most notably in 2021, when it soared to $0.74. But it's down 89% since then (as of Oct. 23), and it's not seen as a serious crypto investment.

A new venture, Dogecoin Labs, aims to change that by giving DOGE holders more ways to use their coins. Here are the details and an assessment of whether this could drive real growth for Dogecoin.

Image source: Getty Images.

What is Dogecoin Labs?

Dogecoin Labs is an independent organization formed by teams behind a Dogecoin wallet, an application network, and merchant payment tools. It's partnered with the Dogecoin Foundation, a not-for-profit organization that supports and guides the cryptocurrency.

The Dogecoin Foundation continues in its role, including open-source development. Dogecoin Labs focuses on commercial opportunities. The foundation also has a corporate and commercial arm, House of Doge, that's contributing select intellectual property (IP) and development operations to Dogecoin Labs in exchange for an equity stake.

How the economic ecosystem works

The aim of Dogecoin Labs is to build economic infrastructure and help achieve the Dogecoin community's long-standing goal of $1. It has three core products:

• MyDoge: A crypto wallet and app. Dogecoin Labs says this has grown to more than 500,000 users without paid acquisition.
• DogeOS: An Ethereum Virtual Machine (EVM)-compatible application layer built on top of Dogecoin.
• Such App: A merchant point-of-sale (POS) and invoicing tool, currently still in beta.

DogeOS opened its public testnet on Sept. 30. Developers can use it to build the types of decentralized apps (dApps) found on other smart-contract blockchains, including crypto lending protocols, decentralized exchanges, and blockchain games. MyDoge recently rolled out its V3 update, which connects wallets to apps built on DogeOS.

Such App is expected to connect to DogeOS in the future, providing a link between the application layer and merchants. For now, Such App supports in-person QR payments and invoices.

DogeOS essentially expands what developers can do with Dogecoin by adding an application layer with smart-contract capabilities. Such App makes it easier for merchants to accept Dogecoin. MyDoge helps DOGE holders find apps through DogeOS and provides a quick, convenient payment process when using coins.

What it means for Dogecoin's price

Dogecoin Labs is welcome news for a cryptocurrency in dire need of change. It expands Dogecoin's utility with smart contracts and, ideally, increased merchant acceptance.

However, ambitious plans are par for the course in the crypto market. The challenging part is the execution. MyDoge's base of more than 500,000 users is a nice start, but there have been no disclosures about the number of active wallet users or how many users have tried DogeOS's apps.

Dogecoin also faces stiff competition from other types of cryptocurrency in the spaces it's trying to enter. Other smart-contract blockchains, including Ethereum and Solana, already have thriving app ecosystems. Digital dollar stablecoins like USDC and Tether are a more natural fit for payment because they're designed to maintain a value of $1.

Dogecoin trades at $0.08, a long way from the community's goal of $1. Until Dogecoin Labs delivers tangible results, I'm skeptical it will have much impact on the cryptocurrency's price. This has always been a meme coin trading off hype, not fundamentals. You may want to wait and see what Dogecoin Labs accomplishes before deciding whether to buy any DOGE.

Lyle Daly has positions in Ethereum, Solana, Tether, and USDC. The Motley Fool has positions in and recommends Ethereum and Solana. The Motley Fool has a disclosure policy.