Degen originated from the Farcaster community. In January 2024, the Degen token was first launched on the Base chain and quickly became one of the most attention-grabbing memecoins in the Base ecosystem due to its unique incentive mechanism and meme culture. Subsequently, DAO infrastructure service provider Syndicate announced the launch of Degen Chain, a Layer3 based on Base, utilizing the technology of Arbitrum Orbit and AnyTrust to establish Degen as the native token of the system. Upon this announcement, the price of DEGEN soared, with an increase of up to 1400% in the past 3 months.
The Rise of Memecoins
Memecoins, cryptocurrencies inspired by internet memes, jokes, or viral trends, gained popularity starting from the birth of Dogecoin in 2013. Dogecoin, themed around the "Doge" meme, garnered widespread attention and affection. Initially a symbol of humor and entertainment, Dogecoin gradually demonstrated deeper value and utility, such as its applications in online transactions, tipping, and charitable donations. The popularity and diverse uses of Dogecoin highlighted the significance of Memecoins beyond mere entertainment in the cryptocurrency world.
The rise of Memecoins is mainly attributed to their community-based nature, engaging content, and beginner-friendly accessibility. Following the success of Dogecoin, numerous other Memecoins emerged in the market, drawing inspiration from various internet trends and jokes. These include currencies themed around different animal memes, references to pop culture, and more abstract concepts. These Memecoins typically debut at very low initial prices and may rapidly appreciate due to discussions on social media and community participation. Their popularity is also driven by cryptocurrency trends such as the rise of DeFi and NFTs, which open up new avenues for innovative uses of Memecoins.
However, the nature of Memecoins also brings significant risks. Their value may experience drastic fluctuations, often driven more by social media trends than intrinsic value. Many Memecoins lack solid technical support or clear use cases, making them highly speculative assets. Additionally, the field has seen "pump and dump" scams, artificially inflating the value of a Memecoin through collective action, followed by early holders selling at the peak, resulting in losses for later participants. The anonymous nature of Memecoin projects further complicates the assessment of their legitimacy and sustainability.
In summary, while Memecoins offer unique opportunities for community building and participation in the cryptocurrency space, they also come with high risks. Investors entering the Memecoin market should exercise caution, conduct thorough research, and recognize the speculative nature inherent in these assets.
The Origin and Development of Degen and Its L3
The emergence and development of Degen can be traced back to Farcaster. As a decentralized social application, Farcaster gained attention in the cryptocurrency community for its unique social interaction and emphasis on privacy protection. On Farcaster, users can share, discuss, and interact while utilizing blockchain technology to ensure the authenticity and tamper resistance of content.
Within the Farcaster community, the /degen channel, one of the earliest channels, was launched by the Warpcast team and quickly became a popular venue for discussing cryptocurrency prices and sharing investment experiences. In January 2024, with the launch of Degen on the Base chain and an airdrop activity for community members of the /degen channel, Degen showcased its unique incentive mechanism and meme culture, fostering a new form of social interaction within the community. These included innovative reward and airdrop mechanisms, encouraging community members to acquire Degen through participation and providing high-quality content, thereby stimulating the creation of high-quality content within the community and laying a solid foundation for the initial circulation and value growth of Degen.
The tokenomics of DEGEN are designed to support network operations and encourage community participation through a carefully planned economic model. The total supply is approximately 37 billion DEGEN tokens, with 70% allocated to the community to promote widespread participation, 15% allocated to liquidity pools to enhance trading liquidity and market value stability, and the remaining 15% used for the development team, early investors, and continuous ecosystem improvement.
Subsequently, Degen completed an angel round financing of 490.5 ETH and collaborated with multiple projects on the Base chain, significantly expanding its use cases and ecosystem. These collaborative projects not only adopted Degen as a trading medium but also further affirmed its feasibility and value as a native token.
Most importantly, Degen's development team collaborated with Syndicate to launch Degen Chain based on the Base chain. This provided strong technical support and scalability for Degen, pushing its market valuation to new heights and transforming it from a community memecoin to a cryptocurrency asset with practical application value and market competitiveness. Degen Chain, established by the Degen community, is built on Arbitrum Orbit, settled on the Base chain, and supported by AnyTrust for data availability. Its native gas token is DEGEN, making it one of the first community tokens with its own L3.
The launch of Degen Chain not only provided support for new experiments in payment, gaming, and more, but also, through the developer tools provided by Syndicate, such as Transaction Cloud APIs, offered free gas for developers on Degen Chain, promoting innovative experiences and application mechanisms between community tokens and L3 technology. On this platform, developers quickly launched multiple applications, including DegenSwap, a major decentralized exchange platform on Degen Chain, which attracted numerous memecoin launches. Since its launch, it achieved nearly $100 million in trading volume in just four days, completed over 272,000 unique transactions, and hosted over 7,500 contracts and 2,300 tokens. All of this demonstrates the enormous potential of Degen Chain in driving blockchain innovation and accelerating the application of community tokens.
Representative meme chains: Dogecoin and Shiba Inu's On-Chain Development
Other memecoins with their own public chains include Doge and Shib.
Unlike Degen, Dogecoin was officially launched on December 6, 2013, as a lighthearted version based on existing cryptocurrency technology. Dogecoin's protocol is based on Luckycoin and Litecoin, both of which use Scrypt as part of their PoW algorithm. This means that Dogecoin has had its own blockchain since its launch, allowing it to operate independently from other major cryptocurrencies.
Shiba Inu was created by an anonymous individual or team, "Ryoshi," in August 2020. It draws inspiration from the Japanese Shiba Inu, another mascot-based cryptocurrency originating from the meme Dogecoin. Shiba Inu was initially positioned as a potential "Dogecoin competitor." In May 2021, Vitalik Buterin donated over 50 trillion SHIB, valued at over $1 billion, to the India COVID-19 relief fund.
Shibarium is the long-awaited Layer2 solution for the Shiba Inu community, aiming to transform Shiba Inu from a simple memecoin into a complete blockchain ecosystem. By adopting a new consensus mechanism called "Proof-of-Participation" and supporting EVM compatibility, it can achieve efficient and cost-effective transactions. This innovative framework facilitates seamless migration of the Shib token and the development of decentralized applications, providing a stage for the expansion of applications within the Shiba Inu ecosystem.
Looking back at the development history of their public chains, compared to Degen, other meme coins such as Dogecoin and Shiba Inu have achieved significant success in the market, but their technical development and ecosystem construction have been relatively conservative, with no outstanding performance in the ecosystem. The value and popularity of these two Meme Chains rely more on community support and cultural phenomena rather than technological innovation or ecosystem expansion.
Conclusion
The case of Degen marks the transformation of memecoins from a mere cultural phenomenon to an undeniable force in the cryptocurrency ecosystem, demonstrating the long-term value and market potential of the new generation of memecoins. It, along with traditional memecoins like Dogecoin and Shiba Inu, enriches the diversity of the cryptocurrency market. However, whether Degen can break the single nature of the meme chain ecosystem and open up a rich application ecosystem remains to be verified over time.
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