Original title: "What makes $DEGEN a $1B project in three months"
Author: XIN
Compiled by: TechFlow TechFlow
If you have used the Base chain recently, you must know that the most popular token on it is called $Degen, which today has a market cap of over $1.5 billion. When the Degen channel on Farcaster goes live in January 2024, it will allow users to use $Degen to reward high-quality content creators. So far, there are over 83,000 holders and still growing rapidly. So, how did $Degen develop into a "golden dog" worth billions of dollars? This article will take you to explore together.
New airdrop gameplay (rewards)
Since January this year, $Degen has quickly become popular in the Farcaster community, with community members rewarding their favorite high-quality content in the form of comments + DEGEN. Degen will receive daily stipends based on user activity and engagement on Farcaster. The airdrop amount is calculated based on the total rewards received from others each season, so users need to publish high-quality content on Farcaster to receive rewards. Many active users have even reached the daily reward cap of thousands of dollars.
unique community
The price of $Degen increased with the popularity of the community. At this time, Degen's market value increased from 10 million to about 50 million. In turn, Degen also brought a wave of user growth to Farcaster.
Pingfeng’s description of Degen’s rewards is very apt:
The mutual rewards of Degen make me feel like a bunch of people standing around a big bowl. Everyone can pick up a spoon of similar length and diameter and feed it to others, but not to themselves. How much they can eat depends on their own reward. The more they interact and reply to each other, the more rewards they receive.
Angel round financing
In February, Degen announced the completion of an angel round of financing of 490.5 ETH (approximately US$14.7 million), led by 1confirmation, with participation from Farcaster OG and other institutions. These funds will be used to develop the Degen ecosystem and community. It can be seen that part of the shares have been given to some community projects, such as Drakula, which also laid the foundation for Degen's practicality.
Practicality
The decentralized TikTok Dracula on the Base chain was launched on March 14. Dracula was created by Alex Masmej, the issuer of fan token $ALEX, and received investment from Paradigm.
Due to a previous stipend of 10 million DEGEN received from the Degen community (currently worth approximately $500,000), the Dracula application uses degen as the token. Users can use degen to purchase their favorite bloggers, similar to the gameplay of Friend tech. Users can also earn points by posting and watching short videos, sharing links, and purchasing creator tokens, and are rewarded with BLOOD. In addition, similar to the NFT chip platform zora, community projects Bracket.Game and Rounds.wtf use degen as local tokens. By this time, Degen's market capitalization had grown to approximately $70 million to $100 million. DegenCast will also use Degen to purchase creator keys.
Degen L3
Degen begins its impressive journey on March 20th. First, on March 29, Degen announced a partnership with Syndicate to develop Base-based L3. The Gas token of Degen Chain is also DEGEN. As of now, Degen Chain has conducted more than 4 million transactions and has more than 100,000 wallets.
The second piece of news is that Farcaster's parent company, Merkle Manufactory, raised capital at a valuation of US$1 billion, led by the founders of Paradigm. Since Farcaster did not issue tokens, the community began to view this financing as a positive development for $Degen.
Since Degen launched L3, its entire valuation space has been compared with major public chains, and it can even be said that $Degen has become Base's token. The market capitalization soared like a rocket, reaching $2 billion in a matter of days.
Inspired by Degen
Degen originated from the Farcaster community and is rooted in the Base chain. It can be said that it and Farcaster/Base achieve each other. Degen's price attracts users, and without the Farcaster community, Degen wouldn't be created. The Farcaster community project also provides an application scenario for Degen.
The narrative of Degen has evolved from a community project’s self-entertainment token to a core project’s social utility token, and then to the public chain’s Gas token. From 10 million to 100 million to 1 billion, every advancement represents an increase in valuation scale.
The rise of Degen also provides a path for the development of Farcaster community projects. Follow-up projects such as Drakula, DegenCast, etc. are worth looking forward to.
