The past and present of DOGE and its economic model: Is there still an investment opportunity for this Meme leader?

Once Meme coin pursues practicality, it's like the clown taking off the GRIN mask.

Written by: Lao Bai

In a deep night in December 2013, IBM programmer Billy Markus and Adobe marketing director Jackson Palmer, under the influence of alcohol, spent less than three hours coding a string of code. They used the popular internet Shiba Inu meme "Doge" as the icon and gave this coin a humorous name "Dogecoin." No one expected that this joke, intended to mock the Bitcoin community for its pretentiousness, would become a financial monster worth tens of billions of dollars a decade later, nor could they have anticipated that it would stage the most absurd comeback in cryptocurrency history under the manipulation of Musk's Twitter.

From Mockery to Legend: The Magical Decade of Dogecoin

The birth of Dogecoin is soaked in black humor from head to toe. The two founders scoffed at the elitism of the Bitcoin community—while Bitcoin believers shouted "digital gold" and "disrupting fiat currency," they intentionally designed Dogecoin to be anti-mainstream: Bitcoin has a total supply of 21 million coins emphasizing scarcity, Dogecoin issued 100 billion coins in its first year, and subsequently increased by 5% each year; Bitcoin miners require specialized mining machines, while Dogecoin directly adopted the Litecoin algorithm, allowing ordinary computers to mine; in Bitcoin forums, discussions revolve around profound cryptography, while the Dogecoin community deconstructs financial attributes with brainwashing memes.

This spirit of mockery unexpectedly struck a chord with the collective sentiment of the internet. In 2014, the Dogecoin community launched the "Doge4Water" crowdfunding campaign, using $30,000 to drill a well in Kenya. The New York Times remarked on this, exclaiming: "A group of internet users communicating with dog head memes turned out to be more efficient than United Nations agencies." In the same year, American NASCAR driver Josh Wise's car was covered in Dogecoin logos, and millions of netizens supported the race by tipping DOGE, transforming this third-rate team into a traffic star.

However, until this time, Dogecoin was merely "interesting", with almost no wealth effect.

The real turning point happened in 2021. When Musk posted the image "Doge Barking at the Moon" on Twitter, Dogecoin surged 900% in a single day. The world's richest man then transformed into Dogecoin's chief salesman: first saying "SpaceX will send Dogecoin to the moon next year," then announcing "Tesla merchandise will support DOGE payments," and even intentionally slipping during Saturday Night Live by saying "Dogecoin is a hustle," which led to a price crash before he posted to save it. In this carefully orchestrated roller coaster, Dogecoin's market value once surpassed $88 billion, overtaking old giants like Ford and GM, becoming the most dangerous financial toy in the crypto world. Only after Dogecoin did people realize that the wealth effect has nothing to do with actual application.

Four Main Types of Cryptocurrency: The Status of Dogecoin in the Community

To understand the essence of Dogecoin, one must first clarify the landscape of the cryptocurrency world. This market may seem chaotic, but it is actually divided into four main categories, each following entirely different survival logic.

The first category only includes Bitcoin itself, which is the eternal value guarantee of the crypto world. Bitcoin, with a fixed total supply of 21 million coins and a decentralized architecture, has established a belief system of "digital gold." Followers see it as the ultimate weapon against the excessive issuance of fiat currency. As of today in 2025, with the development of the market, people increasingly believe that there is an essential difference between Bitcoin and other cryptocurrencies.

The second type of altcoin is the "stock market" of the crypto world. "Shanzhai" is not a derogatory term, but refers to other cryptocurrencies designed in imitation of Bitcoin after its emergence, hence the term "shanzhai". The characteristic of these coins is that they are like stocks in traditional financial markets, but there are no entry barriers for listing; anyone can issue a coin, but it depends on whether anyone buys it. Each altcoin can be understood as having a web3 company behind it; if you believe in this company, you can buy its coin. Major altcoins include ETH, SOL, etc. The main characteristics of altcoins are:

• Technical iteration (such as Ethereum smart contracts, Solana high TPS);
• Ecological narrative supports valuation (e.g., ETH = global settlement layer, SOL = high-speed blockchain);
• Market value depends on "team strength + user base + application scenarios."
• In investment terms, whether to buy altcoins depends on the "fundamentals."

The third type of stablecoin plays the role of "crypto dollars". USDT and USDC are anchored to the US dollar at a 1:1 ratio, becoming universal settlement tools in exchanges. They have no investment value but serve as the lubricant for the entire market—when you want to escape the plummeting Bitcoin or lock in DeFi mining profits, stablecoins are the best safe haven.

The fourth type of Meme coin is like a "lottery ticket" in this realm. They lack technology, teams, and applications, meaning they have no "fundamentals", with prices driven solely by memes, jokes, and celebrity endorsements on social media. Dogecoin (DOGE), Pepe Coin (PEPE), and more recently AI Agent and Trump, have seen a constant influx of newcomers, with 90% of them going to zero within half a day. Dogecoin is the founding ancestor of this faction and the only survivor that has withstood three bull-bear cycles, peaking at a market cap of over $100 billion and still holding $30 billion today. Recently, Dogecoin has seen a significant rise, drawing renewed attention from the market.

Absurd Economic Model: The "Anti-Logic" Survival Technique of Dogecoin

If judged by traditional financial standards, Dogecoin's economic model is nothing short of a disaster. Its mechanism of unlimited issuance directly contradicts Bitcoin's tenet of scarcity—Dogecoin was created to oppose Bitcoin; since you Bitcoin have a fixed total supply and scarcity, I will implement unlimited issuance. The issuance of 100 billion coins in the first year of Dogecoin was already an astronomical figure, and thereafter, 5 billion coins are added each year, with the current inflation rate at about 3.5%. Dogecoin's technical architecture is a complete copy of Litecoin, and the core development team is down to just two part-time maintainers, with 90% of the hash power concentrated in two mining pools. Even the two founders have long since cashed out, and in 2015, they tweeted in anger: "The cryptocurrency market has been devoured by greed."

But it is precisely this "three-no mode" (no technology, no team, no application) that allowed Dogecoin to carve a bloody path in the jungle law. Unlimited issuance has led to a price of less than 1 cent, making it psychologically burdensome for newcomers; Doge memes inherently carry viral transmission attributes, appealing to all ages and tastes, spreading from Reddit forums to TikTok challenges; Musk's tweets have also torn a hole in the traditional financial circle, forming a strange alliance between hedge funds and retail investors. During the 2021 "Doge to $1" movement, American college students gambled with their meal money on Dogecoin, while Wall Street institutions quietly laid out their options market, ultimately pushing its market value above that of Wells Fargo, the largest bank stock in the U.S.

This paradoxical success exposes the deeper truth of the cryptocurrency market: when the technological narrative fails, emotional consensus becomes the strongest value carrier. Bitcoin requires mining machines, computing power, and developer conferences to maintain its faith, while Dogecoin only needs a GIF of a dog.

How should we view Dogecoin

Identify the right time for speculation. The fluctuation cycle of Dogecoin highly correlates with the popularity on social media. Since the calls started in 2021, Elon Musk has formed an inseparable bond with Dogecoin, and after assisting Trump in his second term, he established a department named "D.O.G.E" that shares the same name as Dogecoin. By now, Musk has basically developed a deep connection with Dogecoin. Therefore, when Musk posts related tweets, it is generally the best time to buy Dogecoin.

Be wary of ecological traps. In recent years, Dogecoin has tried to "launder" its transformation, launching Dogechain, a content platform for tipping, and a payment function for Visa cards, but these efforts have instead diluted its core advantages. When SHIB tried to wrap itself in a "decentralized exchange" and "metaverse real estate", the market capitalization had evaporated 90% from its high. Once the meme coin pursues utility, it's like a clown taking off his smiley mask - people love that absurd symbol.

Understand the market signals. The surge of Dogecoin often serves as a warning that the market is peaking. In April 2021, when its market cap broke into the top ten, Bitcoin immediately began a six-month correction; at the beginning of 2024, DOGE led the rally again, and two months later, altcoins collectively halved in value. The logic behind this phenomenon is that when institutional funds complete their positioning, they need to create a profit effect to attract retail investors to take over, and there is no better bait than Dogecoin.

The Metaphor Behind the Carnival

The ten-year magical history of Dogecoin is essentially an extreme experiment in the democratization of finance in the internet age. It proves one thing: when traditional financial systems build high walls, ordinary people will dissolve authority with mockery and deconstruct order with memes. Musk may be able to manipulate short-term prices, but what truly gives Dogecoin its vitality is the collective black fable written by millions of netizens—about greed, about resistance, about the eternal impulse to find a sense of belonging in this absurd world.