Degen Chain and DEGEN Overview: The Community-Driven Layer 3

What Is Degen Chain and the DEGEN Token?

Degen Chain is a Layer 3 blockchain built with Arbitrum Orbit dedicated to the Degen community on Warpcast. Degen Chain is built around the DEGEN token, which was previously airdropped to the Degen community on Warpcast and is used for gas fees on the Degen Chain.

Key Takeaways

• Degen Chain is a Layer 3 blockchain built on Base, an Ethereum Layer 2 solution, for developing crypto projects for its community.

• The main features of the Degen Chain include low transaction fees, a community-centric approach, and its native token, DEGEN.

• DEGEN token started as a meme coin but is now a community token of the Warpcast decentralized social media platform built on Farcaster.

• DEGEN tokenomics allocates 70% of the total token supply to its community.

With the bull market, come the “degenerates” (a.k.a. degens) – the high-stakes, thrill-seeking investors who thrive on the volatile edges of the cryptocurrency landscape, particularly meme coins.

In 2024, the meme coin frenzy is reaching new heights because of scaling solutions that offer cheaper transactions, along with platforms like Pump.fun that makes it easy for users to deploy tokens. Recently, the popular Ethereum scaling solution Base, developed by Coinbase, has become the hub for meme coin sniping (alongside others like Solana and TON).

While most meme coins are created for fun with no practical utility beyond building and growing a community, DEGEN, on Base, seems to offer more than a typical DOGE-knockoff crypto.

Degen Chain is the chain supporting the DEGEN token. The highlight of this Layer 3 is the ultra-cheap transactions that it offers to its community.

At the time of writing, Degen Chain has accrued nearly 2 million accounts, with the total number of transactions crossing 20 million. Within ten days after  launch, over 3.2 million blocks were created. 

This article covers the Degen Chain, DEGEN token, and the Degen Chain ecosystem.

What Is DEGEN and Degen Chain?

DEGEN is a meme coin that was airdropped by Farcaster, a decentralized web3 social protocol. Unlike most other meme coins, however, DEGEN comes with some utility — the main one being that it is the native token of Degen Chain.

While Degen Chain is not the first Layer 3 scaling solution, it is a first of its kind — a layer dedicated to DEGEN and the associated meme coin ecosystem.

The major features of the Degen Chain include:

• Low-cost Transactions: The transaction cost on the Degen Chain is low compared to that of other layer-2 blockchain transactions.

• Community Centric: The Community is the backbone of the Degen Chain ecosystem, and its utmost priority is to address the requirements of its community members.

• Native Token DEGEN: The DEGEN token energizes Degen Chain-based activities and incentivizes the community. 

Following the popularity of the token and its community, the total smart contracts deployed on the Degen Chain crossed 28,000. At the time of peak activity, on April 3 (when over 2 million transactions were submitted), the average transaction fee was below 0.015 DEGEN (less than 1c). This is a strong sign of the chain’s practicality for consumer use.

Degen Chain is actively expanding its reach through strategic partnerships, like the recent collaboration with Decent, a cross-chain transaction platform. To incentivize adoption, Degen Chain rewarded top L3 bridgers on Decent with a 500,000 DEGEN token prize pool.

Introducing Decent Partner Points - a way to recognize our most active users. Users earn points (powered by @stackdotso) based on their interactions with Decent products.

We’re partnering w @degentokenbase to issue 500k DEGEN to the top users who bridged to Degen Chain 🎩👉 pic.twitter.com/C1y0tAc1dg

— Decent (@decentxyz) April 5, 2024

Degen Chain also has an infrastructure partnership with Syndicate that allows developers on the Degen Chain to receive free gas for utilizing Syndicate's tools, such as Transaction Cloud APIs. 

Who Founded the Degen Chain?

Jacek Trociński, a former architect and data engineer at Hedgehog Technologies, is the founder of Degen Chain. Trociński left his job towards the end of 2023, looking to set up his business.

Trociński told Blockworks that he was also active on a decentralized social network Warpcast, which is built on Farcaster. On this platform, he was active in the Degen channel when the channel was new.

Users started joining the Degen channel in December 2023 when someone developed a points token. The community's demand inspired Trociński to work on a new token — DEGEN. However, before we do into the details of the DEGEN token, let's look at the Degen Chain first.

How Degen Chain Works: Major Components

Degen Chain consists of three main components:

Arbitrum Orbit

Arbitrum Orbit is a permissionless path developed using Arbitrum technology to launch customizable L2 or L3 chains. Here, the Orbit Chains are Layer 2/3 chains that settle on the Ethereum Layer 1 blockchain.  

Degen Chain created tailored products based on the required needs of the DEGEN community. Moreover, running dApps on Orbit Chains enhance performance without compromising security as its security is derived from the main chain (Ethereum). 

AnyTrust

AnyTrust is a protocol developed by Arbitrum Nitro technology to lower the costs around data availability, which ensures that all participants have access to transaction data needed to verify blocks. To do so, AnyTrust is operated with the help of a committee of nodes based on trust assumption.

The transactions are more efficient as AnyTrust manages the data off-chain to reduce the load on the Layer 1 network. For this reason, Degen Chain can offer lower fees for its users. 

Base

Powered by Coinbase, Base is used by Degen Chain as a settlement layer to facilitate secure and efficient transactions. Base also ensures that its features are provided without compromising the integrity of the Degen Chain network.

Furthermore, Base offers full EVM compatibility to Degen Chain for a fraction of the cost. Moreover, developers get access to Coinbase's tools and APIs to build or modify their products based on the community's needs. 

Degen Chain Ecosystem

Degen Chain is expanding due to its community-centric approach and the implementation of Layer 3 blockchain. As a result, the Degen Chain ecosystem stretches across different areas, such as DeFi, GambleFi, and NFTs.

Some of the examples of the Degen Chain ecosystem are as follows:

1. DegenSwap: DegenSwap, built on the Degen Chain, allows you to swap and stake tokens. In addition, you can add liquidity to the platform and earn fees in the form of pool tokens. 

2. FrogSwap: Built on top of the Degen Chain, FrogSwap facilitates users to stake, farm, and swap tokens. Moreover, FrogSwap Launchpad lists newly issued Degen Chain tokens for sale.

3. DINU (DINU): DINU is a meme coin founded by the developer of DegenSwap with a maximum supply of one billion tokens.

4. NFTdegen.lol: Claimed to be the first NFT launchpad on the Degen Chain, NFTdegen.lol has an inbuilt NFT pool, where users can sell NFTs to the pool at any point in time. 

5. Degen Cet (CET): Degen Cet (CET) is a cat-themed meme coin built on Degen Chain, which is in the process of expanding its community base. 

Degen Chain Liquidity Mining 

Liquidity mining allows users to earn points to provide liquidity to the DEGEN pool. You can contribute to this pool by visiting Uniswap v3, which features DEGEN/WETH token pairs with a 0.3% fee tier.

Users don't need to lock LP NFTs to participate in the liquid mining, and the reward points earned will vary based on the amount of liquidity provided to the pool.

In addition to Uniswap v3, Degen has also established a liquidity pool with the Aerodrome platform. However, this platform offers independent incentives rather than liquidity mining points. You can choose any of these platforms to contribute to the liquidity and earn incentives or points. 

Degen Chain Bridges

Degen Chain bridges consists of two types, Bridge and Relay Bridge: 

Bridge 

Degen Bridge facilitates the bridging of tokens to the native DEGEN using the Degen Chain. You can bridge your tokens to DEGEN token by following these simple steps:

• Step 1: Visit the Degen Bridge platform. 

• Step 2: Select the network of your token.

• Step 3: Select your token in the “From” section

• Step 4: Choose the DEGEN token in the “To” section. 

• Step 5: Connect your wallet with the platform.

• Step 6: Complete the bridging process by paying the gas fee.

Relay Bridge

Relay Bridge claims to be the cheapest and fastest way to transact and bridge across chains. Moreover, this bridge connects users with relayers, who act on the user's behalf across various chains while charging a small fee.

In addition, the Relay bridge offers instant bridging through low-latency cross-chain transactions.  

DEGEN Token and Its Utility

DEGEN is an ERC-20 token created by the founder of Degen Chain, Jacek Trociński. He ended up creating a DEGEN token with tokenomics similar to Uniswap's token, UNI, and Blur's token, BLUR. 

After launching this token on January 8, 2024, Trociński created a point system to reward the users of the Degen channel. These reward points were awarded to holders of certain NFTs and to users based on the likes and comments they received on their channel posts.

$DEGEN token claims are officially live on https://t.co/x3IpFkxakT! After connecting your wallet, you should see a claim button where the countdown timer to launch once was. Thanks to everyone who has made this possible; really appreciate all you degens! 🎉🚀

— Degen 🎩 (@degentokenbase) January 8, 2024

One point was equal to one DEGEN token, which the users received through airdrops. There are projects on Degen that use the DEGEN token as part of their app, such as the prediction game Perl that lets users bet with DEGEN.

The main use cases for DEGEN consist of the following:

1. Native Gas Token: To make DEGEN the native gas token was one of the main objectives of Degen Chain's founder, Trociński. As a result, the projects built on the Degen Chain can now use DEGEN to pay for the gas fees.  

2. Token Trading and Swapping: The DEGEN token is a tradable crypto token that is available on Uniswap v3, Gate.io, Bybit, and more. Moreover, users can easily swap DEGEN with other crypto tokens supported by the exchanges. 

3. Gas and Fee Reimbursement: DegenSwap, a multi-chain and cross-chain aggregator platform, provides 100% gas and swap fee reimbursement to DEGEN token users. To avail of these reimbursed tokens, users must stake the same amount of DEGEN tokens for one year.

4. Grants: Degen Chain provides grants to projects and developers that enhance its community by creating Degen-powered apps. For example, Drakula, a short video social application that functions with DEGEN as its primary token, received 20 million DEGEN tokens as grants.

Tokenomics of DEGEN

The Degen Chain project has created approximately 36.97 billion DEGEN tokens at the time of launch. At present, the circulating supply of these tokens is over 12 billion.

According to the tokenomics, out of the total DEGEN tokens, 70% is dedicated to the community. Here, 60% of tokens are distributed through three phases of airdrops, with the remaining 10% distributed through liquidity mining.

This project provided 15% of the total tokens in Airdrop 1. The 20% token allocation for Airdrop 2 is in the process of being distributed. Finally, Airdrop 3 will supply the remaining 25% of allocations for the community members. 

The other 15% of tokens are allocated to liquidity pools to provide smooth trading and market stability. The remaining 15% is assigned to the investors, team, and the broader ecosystem. Finally, a 1% annual inflation rate starts from 2028.

Degen Chain and Airdrops

As mentioned above, according to the DEGEN’s tokenomics, 60% of the total token supply is distributed to the community via airdrops (and another 10% through liquidity mining). Additionally, airdrops are scheduled in three phases, which are communicated to Degen's online community through their official accounts on X and Warpcast.

At time of writing, there is no new information available around DEGEN’s third airdrop. 

Airdrop 1

The first airdrop, aka Airdrop 1, was announced by Degen's founder and lead developer, Jacek Trociński, through his official Warpcast handle, Jacek, in December 2023. 

During the announcement of the first DEGEN airdrop, the number of community members in Warpcast's Degen channel was low. At present, this number has grown close to 65,000.

Airdrop 1 offered 15% of the total supply of 36.97 billion DEGEN tokens, which was almost 5.5 billion tokens, ready to be airdropped. The followers of the Degen channel received the tokens based on the engagement they received on their posts. 

At the time of writing, 96.83% of users claimed the DEGEN tokens from the first airdrop, which constitutes 1,481 users in total.

Airdrop 2

After the successful Airdrop 1, Jacek came up with the second airdrop, Airdrop 2, in February 2024. This airdrop offered daily DEGEN tokens to tip other Farcaster users.

After Jacek's post, community members flooded the post, and spammers were also involved. To solve the issue, Jacek introduced an update allowing users with 10,000+ DEGEN tokens in their wallets to receive tip allowances. Airdrop 2 has supplied 3.95% of its total available 20% DEGEN token supply.

Degen Bounties Explained

Degen Chain previously offered three types of bounties to its community. We’ll explore these previous bounties:

1. Memes Bounty

Memes Bounty was involved in creating a Degen meme on the Farcaster platform and posting its original cast on the official Degen Channel on Warpcast with the hashtag #DegenMeme. 

The winners were selected based on the number of upvotes for the memes. The most upvoted person won 100K DEGEN, and four runner-ups won 25K DEGEN each. 

2. Frames Bounty

Frames Bounty  assigned participants to create a Degen frame on the Farcaster platform. Selected judges, along with community votes, selected the finalists.

The winner received 1.5 million DEGEN and 600M FRAME tokens, and the two runners-up received 500K DEGEN and 400M FRAME tokens each.

3. Logo Bounty

Logo Bounty asked the Degen Chain community to design a new logo for the DEGEN token. The organizers instructed participants to submit their logos on the Farcaster platform.

Each user was limited to submitting only one logo for the bounty. The winner received 5 million DEGEN tokens, and four runner-ups won 1 million DEGEN tokens.

Conclusion

The community around the Degen Chain witnessed massive growth after its launch. In addition, new projects have started to develop around its ecosystem, with DEGEN as its native token.

The Degen Chain's community-focused approach played a crucial role in the wider acceptance of this Layer 3 blockchain.

Yet, the question remains: is Degen Chain a cautionary tale about the dangers of unchecked speculation, or a stepping stone towards more meaningful decentralized applications made possible by L3 technology? Perhaps it's both.

Learn about more coins and tokens on CoinGecko.