Web 3.0 is slated to be the decentralized, open, and autonomous upgrade to Web 2.0, in which the power of production and circulation is more fairly distributed amongst the participants in the overlapping networks that comprise it. Dogecoin, as one of the earliest existing and persistently popular instances of a Web 3.0 network converging with Web 2.0 interfaces (i.e. Twitter), offers a prime case for the transition to the new era of the Internet. To trace these changes, its necessary to tease apart the various “economies” at play and understand how they interact.
Dogecoin is “pure” cryptocurrency – it has no smart contract capabilities or utility outside of its use as an exchange of value between participants in a payment network. This functionality, along with a host of cultural meanings that have formed around it, allows Doge to uniquely straddle two economic worlds. First, it represents a commodity culture because of its focus on economic motive. Even though many folks boast the Doge is the “people’s currency,” it is not exactly a currency. It’s not a medium of exchange in a technical sense because it’s not (yet?) widely accepted, nor is it used as a unit of account, meaning that it is rare to find someone pricing an item in Doge. Instead, Doge continues to function primarily as a commodity – each unit is the valuable item itself (unlike representative money in which one has a claim to a valuable thing or fiat, which has no valuable asset backing it). On one hand, Doge continues to function as a primarily economic vehicle by which investors benefit off of the labor of other in the network who promote it, recruit others into the network, and cultivate its legitimacy. The more legitimate it becomes, the more change it theoretically has to appreciate. This commodity culture of Doge couldn’t function without its tandem gift economy.
The gift economy of Doge puts the emphasis on the social rather than the economic appreciation of the crypto. If “to the moon!” is the catch phrase of the economic side of things, “do only good everyday” is the slogan for the gift economy side. The existing members encourage and acclimate newcomers into the network, establishing social bonds with them and helping guide them in conventions of reciprocating social value. Lewis Hyde, author of , calls this social value “worth” and contrasts it with the exchange value of the economic vantage point. The authors of Spreadable Media, Henry Jenkins, Sam Ford and Joshua Green write that “Worth is variable [amongst transacting participants]… is closely aligned with meaning” and “cannot be reduced to the exchange of value between producers and their audiences” (68). What’s more (and this is the distinctively Web 3.0 aspect of this whole matter) is that the folks transacting in the Doge gift economy are simultaneously the producersand the audience. Value helps derive worth. The types of interactions within the community are inherently incentivized by the potential economic upside or adoption. Worth helps derive value. The social bonds and reciprocal altruism of the community help grow and solidify the relationships between investors in the network.
For Doge, as well as the myriad other crypto communities in the ecosystem, these two economies are necessarily intertwined. To be a valued member of the community, one must believe that the coin will appreciate within a personally determined, yet not necessarily specified timeline. Participating in the discussion of the Doge’s likeliness to reach $1, be accepted by more retailers and service providers, or endorsed by more influential figures is a gift to the entire network. Helping create and amplify the positive narrative around Doge is the altruistic gift that helps keep the K9 crypto’s economic dreams afloat. There’s a sense in which the liveliness, relative coherence, and expanding influence of the community itself is the primary “fundamental” factor of Doge. Without this fundamental network health, the on-chain data, including active address and volume of transactions, would drop and the native asset would be devalued. When meme coins boast that they have the “best community,” they are essentially saying they have the best chance of longevity in storing and appreciating in value in addition to making claims about the community’s worth.
Understanding how these disparate, yet necessarily intertwined economies relate to one another is a starting point for understanding how Web 3.0 will function more generally. As a “pure” cryptocurrency, there are minimal incentives based on technical functionality compared to the utilities of other coins and tokens that serve a variety of utilities on smart contract compatible protocols and the decentralized apps (dApps) built on top of them. Dogecoin is demonstrating how the most basic economic relationships on Web 3.0 are being created and cultivating our imagination around new ways of exchanging value.
