Tesla CEO and the world’s second-richest person Elon Musk is backing a proposal that seeks to introduce a new fee structure and policy for Dogecoin (DOGE).
The billionaire tells his 57.5 million Twitter followers that it is “important to support” the proposal put forth by core Dogecoin developer Patrick Lodder.
The proposal titled “Fee Policy change proposal #2347” notes that the current Dogecoin transaction fees exceed those of Bitcoin (BTC) and Litecoin (LTC), relatively speaking, and recommends they be cut by at least 50 times.
“Since inception, the goal of Dogecoin has been to be accessible to everyone, but with current exchange rates, transacting DOGE is kept artificially higher than instated on Bitcoin’s and Litecoin’s chains, disregarding their fee economies.
Where transacting DOGE used to be 10x cheaper than transacting LTC, it is, as of writing, nearly 5x more expensive. Therefore, it makes sense to reduce fees by at least 50x to stay competitive.”
Additionally, the proposal notes that the prevailing high fees are discouraging on-chain transactions with one of the consequences being holders of the meme coin keeping their Dogecoin in exchanges for extended periods.
“In the first 6 months of 2021, multiple new all-time high exchange rates against both USD and BTC have caused the recommended fee of 1 DOGE to become steep for the perceived value of transacting Dogecoin on-chain, and is, together with the dust limit (also 1 DOGE), disincentivizing on-chain transactions unnecessarily.
This situation causes people to keep their DOGE in custody of centralized platforms longer, because the perceived value loss of transferring DOGE to a secure wallet is (too) high.”
Overall, Lodder says the proposal offers four critical changes to the Dogecoin network.
“This proposal to all Dogecoin stakeholders suggests to reduce average fees 100x for standard transactions on the Dogecoin chain, split full control over all aspects of fees between miners and node operators, rely less on core development, and bring back a functional (small) free transaction space that incentivizes keeping the network healthy.”
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Featured Image: Shutterstock/Tithi Luadthong