Dogecoin’s Fee Change Proposal Promises to Reduce Costs


A new fee structure for Dogecoin has been designed to reduce overall transaction fees as well as incentivize node operators to relay low-fee transactions to miners.

Announced Sunday, the proposal, spearheaded by Dogecoin core developer Patrick Lodder and his team, would be implemented gradually over multiple software releases.

Introduced in 2014 and implemented in 2018, the current “meaningful fee” model was intended to prevent on-chain transaction spamming. These fees charge 1 DOGE per kilobyte of transaction data, which translates to about 2.16 DOGE (US$0.24) per average transaction.

With this year’s spike in price for dogecoin, meaningful fees can be costly. Currently, users are keeping their dogecoins on centralized platforms because transferring funds to self-hosted wallets is expensive. On the other hand, transactions with relay fees under 1 DOGE do not provide enough incentive to reach miners and are often left unconfirmed.

Many of the changes proposed cater to a freer system in which miners and nodes drive rates. 

“The purpose of Dogecoin transaction fees is spam prevention,” said Dogecoin developer Ross Nicoll. “We provide suggested values so users can have confidence. If they use those values, their transactions will confirm in a reasonable time.”

He noted that while there are minimum default fees in the proposal, “of course anyone can modify their nodes to use alternative values.”

Elon Musk, followed by countless others across Twitter, r/dogecoindev, and the Dogecoin Github, have already shown their support, though there are still some questions. 

Udi Wertheimer, for example, responded to the proposal on Github, suggesting the development team “should encourage a more robust and dynamic free market, which should have the effect of reducing fees based on current market conditions.” 

Also, Wertheimer, a developer, noted the uncertainty concerning free transaction relay and its ability to “open the door for cheap distributed denial of service (DDoS) attacks on nodes,” to which Lodder responded with “Good point.”



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