Notum logo

Blog

All

DeFi

Blockchain

How-to Guide

Tokens & Coins

Product Updates

Announcements

Lending

Trading

Staking

Crypto

Degen Chain

By Kate

May 23, 20247 min read

image

Every year, the cryptocurrency space continues to grow and develop, offering users new opportunities and investment solutions. Along with this, new surprising projects such as meme coins are emerging, which have been particularly popular in the crypto world for several years.

In 2024, its spreading has gained new dimensions, as new scaling solutions with low-cost transactions appear, giving users more options and opportunities. However, meme coins as such have little value and most often do not have any benefit other than developing communities for projects. This is where DEGEN came into the picture - the first meme coin that has value, becoming the native token of the Degen Chain.

Degen Chain is the Layer 3 blockchain, built on DEGEN crypto and offering very cheap transactions and community oriented approach. Today’s article from Notum will tell you more about Degen Chain and its ecosystem, pay attention to its operating principles, and also highlights its advantages. We will also shred light on the DEGEN token and how it affects the Degen Chain and the ecosystem as a whole.

Degen Chain: the Essentials

Degen Chain is a Layer 3 blockchain that is designed for the Degen community on Warpcast. It was created using Arbitrum Orbit and is built on the DEGEN token, which is used to pay gas fees on the Degen Chain. Degen is not the first Layer 3 scaling solution. However, its uniqueness lies in the fact that this is the first layer dedicated to DEGEN.

Important! Degen Chain was founded by Jacek Trociński, former architect and data engineer at Hedgehog Technologies. In 2023, he decided to quit his job and start his own business.

Since the token is quite popular, the project community continues to grow every day. That is why the total number of smart contracts deployed on Degen reached 28,000, which shows the proper level of convenience. Degen Chain also continues to grow and develop through new partnerships, such as collaborations with Decent and Syndicate.

Interesting fact! Degen awarded the best L3 bridgers on Decent with significant prizes in the form of DEGEN tokens to increase adoption.

Using its community-oriented approach, Degen Chain has been able to achieve success in various areas. Besides DeFi, it now also covers NFTs and even GambleFi. Let's take a look at some parts of the Degen Chain ecosystem:

  • DegenSwap is a cross-chain aggregator platform that provides users with the ability to stake and swap tokens. Also, this platform, built on the Degen Chain, allows you to provide assets there for a fee in the form of pool tokens.
  • Degen Cet or CET is a cat meme coin which is also based on the Degen Chain and is constantly expanding, increasing community involvement.
  • NFTdegen.lol is considered the first NFT launchpad on the Degen Chain. Here, users and investors can use an inbuilt NFT pool to sell their NFTs.

Other parts of the ecosystem include DINU meme coin, FrogSwap and others.

Degen Chain: Operating Principles

To understand how Degen Chain works, it is important to know what components it consists of. At the moment it has three main parts:

  • Arbitrum Orbit. This new permissionless product was created using Arbitrum technology with the goal of launching L2 or L3 chains that can be customized. In this project, the Orbit Chains are Layer 2 or 3 chains that are located on the layer 1 Ethereum blockchain. Based on the needs of the community, Degen Chain created its products and dApps.
  • AnyTrust. This protocol uses Arbitrum Nitro technology, thereby reducing data availability costs. This way all users have access to transaction data to verify blocks. Since AnyTrust manages data off-chain to reduce the load on the layer 1 network, transactions are also more efficient. It is thanks to this that Degen Chain provides its users with fairly low fees.
  • Base. Degen Chain utilizes Base as a settlement layer necessary to ensure secure and efficient transactions. In addition, Base is fully EVM compatible with the Degen Chain and ensures that its functions do not harm the integrity of Degen.
Source: docs.arbitrum.io

Why Use Degen Chain Network?

Currently, the Degen Chain offers users the following features that set it apart from its competitors:

  • Layer 3 blockchain. The Degen Chain is the first Layer 3 scaling solution in the DeFi space, which is dedicated to DEGEN and the memecoin system associated with it.
  • Community oriented approach. The main focus of the project is to meet the needs of the community as it is the basis of the entire Degen Chain ecosystem.
  • Low transaction costs. Compared to other layer-2 blockchain transactions, the cost of Degen is quite low, which continues to attract users and investors.
  • DEGEN token. The project has its own cryptocurrency, which stimulates the community to be active on Degen Chain.
  • Collaborations. As Degen Chain is constantly on the lookout for new and exciting partnerships such as Syndicate and Decent, its popularity and demand continues to grow.
  • Featured DApp. Degen Chain also has AlfaFrens, a decentralized application offering private alpha chats for everyone. This way users can use $DEGEN to subscribe and stake subscriptions to their favorite influencers.

DEGEN Token and Its Tokenomics

DEGEN is a cryptocurrency that is part of the meme coin category. However, its uniqueness lies in the fact that, unlike other meme coins, it has utility since it is the native token of Degen Chain. This ERC-20 token was also created by Jacek Trociński, the founder of Degen Chain.

Interesting fact! Despite its affiliation with the Degen Chain, DEGEN was airdropped by web3 social protocol called Farcaster.

The token itself was launched on January 8, 2024, after which Trociński created a points system in order to reward users of the Degen channel. Each point was equivalent to one DEGEN token, which users received through airdrops.

As already mentioned, DEGEN is a token that, unlike other meme coins, has several use cases:

  • Trading. DEGEN is a token that has real value and is traded on popular crypto platforms such as Gate.io, Bybit and others.
  • Swaps. Users and investors can swap DEGEN coins for other tokens supported by the platforms and crypto exchanges where it is listed.
  • Gas fees. DEGEN is also the native gas token. Thus, as Trociński intended, projects built on Degen Chain can use the token to pay gas fees. Moreover, DegenSwap provides a full refund of the gas and swap fee for users of the DEGEN token.

Speaking of tokenomics, Degen Chain initially issued about 37 billion tokens, 70% of which were intended for the community.

«Another 15% has been allocated to form a liquidity pool, and the remaining 15% will support our team, investors, and the broader ecosystem» - Degen Tips.

Source: Degen Tips

Degen Chain and Airdrops

As said, 70% of the total DEGEN supply is intended for the community. 60% of them are distributed through three airdrops, and the remaining 10% through liquidity mining. Thus, 15% of the tokens came from Airdrop 1, 20% of the tokens from Airdrop 2, and the remaining 25% will be distributed during Airdrop 3.

Speaking of the remaining tokens, 15% of them are distributed into liquidity pools to ensure market stability, and another 15% are intended for a wider range of users, as well as investors and the team.

Let's look at each airdrop in a little more detail:

  • Airdrop 1. Jacek Trociński announced the first airdrop in December 2023. 15% of the total supply of tokens was about 5.5 billion DEGEN tokens. Tokens were distributed among followers of the Degen Channel based on audience involvement in their posts.
  • Airdrop 2. Since the first distribution was very successful, in February 2024 Jacek Trociński announced Airdrop 2, offering daily DEGEN tokens to tip other Farcaster users. However, after the post publication, a large number of spammers were involved. Jacek then decided to allow holders of more than 10,000 DEGEN tokens to receive tip allowances. Thus, only 3.7% of tokens were distributed during Airdrop 2. More information about Airdrop 2 can be found here.
Source: Degen Tips Tokenomics

Degen Bridge

Among other things, Degen Chain also has its own bridge, allowing users to bridge tokens to native $DEGEN on the Degen chain. To use it, users need to select one of the networks - Base, Degen OP Mainnet, Zora, Polygon or Arbitrum One. The user can then select any token available on the selected network.

As stated, the Degen chain uses $DEGEN instead of ETH as its native gas token, so to get started you will need a bridge to $DEGEN tokens. In addition, you will need to connect one of the proposed wallets to choose from. More information about using Degen Chain Bridge can be found here.

Notum’s Verdict

Degen Chain is undoubtedly a unique Layer 3 blockchain that has gained significant popularity due to its low transactions and focus on the community needs. Since its very recent launch, Degen Chain has been widely discussed in the crypto community, largely due to its DEGEN having real utility. The DEGEN token can be traded on exchanges, used for swaps and gas fees, making it one of the most unique meme coins in the crypto space.

The Degen Chain ecosystem is quite broad and includes projects such as DegenSwap, DINU meme coin, FrogSwap, Degen Cet, NFTdegen.lol and others. Thus, thanks to its community-oriented approach, Degen Chain continues to succeed and gain popularity not only in the DeFi world, but also in other areas such as NFTs and GambleFi.

Disclaimer: Notum does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Cryptocurrency is subject to market risk. Please do your own research and trade with caution.

FAQ

  1. What is Degen Chain?

    Degen Chain is a Layer 3 blockchain that is built on the DEGEN token, which is used to pay gas fees on the Degen Chain. Degen Chain ecosystem consists of such parts as DegenSwap, Degen Cet, NFTdegen.lol and others.

  2. What is Farcaster and how does it work?

    Farcaster is a decentralized Web3 social protocol that airdropped DEGEN meme coin. Farcaster makes it easy to create social apps where users have full control over their interactions and audience.

  3. How to bridge to Degen Chain?

    Degen Chain also has its own bridge, allowing users to bridge tokens to native $DEGEN on the Degen chain. To bridge, users need to select one of the networks and any token available on the selected network.

  4. How to withdraw from Degen Chain?

    To withdraw $degen from Degen chain, the user needs to select Degen chain in the “From” section, enter the amount, and then click “Swap” to confirm the transaction.

  5. How to get Degen token airdrop?

    To qualify for the future $DEGEN airdrop, users must create an account before the deadline, connect one of the supported wallets, and actively participate in the project’s social networks.