Degen emerged from the Farcaster community. In January 2024, the Degen token was first launched on the Base chain and quickly became one of the most talked-about memecoins in the Base ecosystem, thanks to its unique incentive mechanism and meme culture. Subsequently, DAO infrastructure service provider Syndicate announced the launch of Degen Chain, based on Base’s Layer3, using the technology of Arbitrum Orbit and AnyTrust, with Degen as the native token of the system. Upon this announcement, the price of DEGEN skyrocketed, with an increase of up to 1400 times in the past three months.

The Rise of Memecoin

The popularity of Memecoins, cryptocurrencies inspired by internet memes, jokes or viral trends, began in 2013 with the creation of Dogecoin. Dogecoin uses the dog meme “Doge” as its theme, which has attracted widespread attention and favor. Although initially used as a symbol of humor and entertainment, Dogecoin has gradually demonstrated deeper value and uses, such as its application in online transactions, tips, and charitable donations. Dogecoin’s popularity and diverse uses highlight Memecoin’s ability to transcend mere entertainment and become a force to be reckoned with in the cryptocurrency world.

Memecoins have taken off largely due to their community-based nature, interesting content, and low-level threshold for beginner investors. Following the success of Dogecoin, numerous other Memecoins emerged on the market, borrowing from various internet trends and jokes. These include currencies themed after different animal memes, pop culture references, and more abstract concepts. These Memecoins are often listed at extremely low starting prices and have the potential to quickly increase in value due to buzz on social media and community engagement. Their popularity has also been driven by cryptocurrency trends, such as the rise of DeFi and NFTs, which have opened up new avenues for innovative uses of Memecoins.

However, the very nature of Memecoins also brings considerable risks. Because their value can fluctuate wildly, price movements are mostly based more on social media trends than intrinsic value. Many Memecoins lack solid technical support or clear use cases, turning them into highly speculative assets. In addition, there have also been some “pump and dump” scams in this field, where the value of a certain Memecoin is artificially increased through collective actions, and then early holders sell it when the price is high, causing losses to latecomers. The anonymous nature of the Memecoin project further increases the difficulty of assessing its legitimacy and continued viability.

In summary, while Memecoins offer unique opportunities for community building and participation in the crypto space, they also come with high risks. Investors should exercise caution when venturing into the Memecoins market, do adequate research, and recognize the inherently speculative nature of these assets.

The origin and development of Degen and its L3

The emergence and development of Degen need to start with Farcaster. As a decentralized social application, Farcaster has attracted attention in the cryptocurrency community for its unique way of social interaction and emphasis on privacy protection. On Farcaster, users can share, discuss and interact, while using blockchain technology to ensure the authenticity and non-tamperability of content.

In the Farcaster community, the /degen channel, one of the earliest channels, was launched by the Warpcast team and quickly became a popular place to discuss cryptocurrency prices and share investment experiences. In January 2024, with the launch of Degen on the Base chain, and through the airdrop activity to /degen channel community members, Degen took this opportunity to demonstrate its unique incentive mechanism and meme culture, promoting a new social network in the community interactive way. These include innovative reward and airdrop mechanisms, which encourage community members to obtain Degen by participating and providing high-quality content. This not only stimulates the creation of high-quality content in the community but also lays the foundation for the initial circulation and value growth of Degen.

DEGEN token economics 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, of which 70% is allocated to the community to promote broad participation, 15% is allocated to the liquidity pool to enhance transaction smoothness and market value stability, and the other 15% is used for the development team, early investors and the ecosystem continue to improve.

Subsequently, Degen completed an angel round financing of 490.5 ETH and cooperated with multiple projects on the Base chain, significantly expanding its application scenarios and ecosystem. These cooperation projects use Degen as a transaction medium and further affirm its feasibility and value as a native token.

Most importantly, Degen’s development team cooperated with Syndicate to launch L3 based on the Base chain - Degen Chain. This move provides Degen with strong technical support and scalability, while pushing its market valuation to new highs, realizing the transformation from a community memecoin to a crypto asset with practical application value and market competitiveness. Degen Chain was established by the Degen community, built using Arbitrum Orbit. It uses the Base chain as the settlement layer and AnyTrust to provide support for data availability. Its native gas token is DEGEN, becoming one of the first community tokens to have its own L3.

The launch of Degen Chain not only provides support for new experiments in payment, games and other fields, but also provides free gas to developers on Degen Chain through the developer tools provided by Syndicate, such as Transaction Cloud APIs, thereby promoting the community Development of innovative experience and application mechanisms between tokens and L3 technology. On this platform, developers quickly launched multiple applications including DegenSwap, a major decentralized trading platform on Degen Chain that attracted numerous memecoin launches. In just four days since the platform launched, it has achieved nearly $100 million in trading volume, completed over 272,000 unique trades, and hosted over 7,500 contracts and 2,300 tokens. All this demonstrates the great potential of Degen Chain in promoting blockchain innovation and accelerating community token applications.

Memecoin Representatives: On-chain development of Dogecoin and Shiba Inu

Memecoins that also have their own public chains include Doge and Shib.

Unlike Degen, Dogecoin was officially launched on December 6, 2013, as a light-hearted and humorous version of existing cryptocurrency technology. Dogecoin’s protocol is based on Luckycoin and Litecoin, both of which use Scrypt as part of their PoW algorithms. This means that Dogecoin has had its own blockchain since its launch, allowing it to operate independently of other major cryptocurrencies.

Shiba Inu was created in August 2020 by an anonymous person or team “Ryoshi”. It was inspired by the Japanese Shiba Inu, the dog that is also the mascot of Dogecoin, another cryptocurrency with meme-based origins. Shiba Inu was initially positioned as a potential “Dogecoin competitor.” In May 2021, Vitalik Buterin donated over 50 trillion SHIB worth over $1 billion to the India COVID-19 Relief Fund.

Shibarium is the long-awaited Layer2 solution of the Shiba Inu community, aiming to transform Shiba Inu from a mere memecoin into a complete blockchain ecosystem. By adopting the new consensus mechanism “Proof-of-Participation” and supporting EVM compatibility, it can achieve efficient and cost-effective transactions. This innovative framework facilitates the seamless migration of Shib tokens and the development of decentralized applications, setting the stage for expanded applications within the Shiba Inu ecosystem.

Looking back at the development history of the two public chains, compared with Degen, although other meme coins such as Dogecoin and Shiba Inu have achieved significant success in the market, their technology development and ecological construction are relatively conservative, and their ecology has no brilliant performance. The value and popularity of these two Meme Chains rely more on community support and cultural phenomenon than on technological innovation or ecosystem expansion.

Conclusion

The Degen case marks the transformation of memecoins from being a mere cultural phenomenon to becoming a force to be reckoned with in the cryptocurrency ecosystem, demonstrating the long-term value and market potential of this new generation of memecoins. Together with traditional memecoins such as Dogecoin and Shiba Inu, it enriches the diversity of the crypto market. However, it still takes time to verify whether Degen can break the dilemma of the single ecosystem of the meme chain and open up a rich application ecosystem.

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