Degen's market value exceeds 1.5 billion dollars. How did it become the largest meme coin on Base?

Original Title: 《What makes $DEGEN a $1B project in three months》

Author: XIN

Compiled by: Deep Tide TechFlow

If you have recently used the Base chain, you must know that the hottest token on it is $Degen, which now has a market cap of over $1.5 billion. The Degen channel on Farcaster launched in January 2024, allowing users to reward quality content creators with $Degen. So far, there are over 83,000 holders, and it is still growing rapidly. So, how did $Degen develop into a multi-billion dollar "golden dog"? This article explores it together.

New Airdrop Mechanism (Rewards)

Since January this year, $Degen has rapidly gained popularity in the Farcaster community, with community members rewarding their favorite high-quality content in the form of comments +DEGEN. Degen will receive daily rewards based on user activity and engagement on Farcaster. The airdrop amount is calculated based on the total rewards obtained from others each season, so users need to post quality content on Farcaster to earn rewards. Many active users have even reached a daily reward cap of several thousand dollars.

Unique Community

The price of $Degen has risen with the community's enthusiasm, during which Degen's market cap increased from $10 million to around $50 million, and conversely, Degen also brought a wave of user growth to Farcaster.

Pingfeng's description of Degen rewards is very apt:

The mutual rewards of Degen make me feel like a group of people standing around a big bowl. Everyone can take a spoon of similar length and diameter to feed others, but cannot feed themselves. How much they can eat depends on their own rewards. The more they interact and reply to each other, the more rewards they earn.

Angel Round Financing

In February, Degen announced the completion of an angel round financing of 490.5 ETH (approximately $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 a portion of the shares has already been given to some community projects, such as Drakula, which also lays the foundation for Degen's utility.

Utility

The decentralized TikTok on the Base chain, Dracula, launched on March 14. Dracula was created by Alex Masmej, the issuer of the fan token $ALEX, and received investment from Paradigm.

Having previously received a subsidy of 10 million DEGEN from the Degen community (currently worth about $500,000), the Dracula application uses degen as its 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 use BLOOD for rewards. Additionally, community projects like Bracket.Game and Rounds.wtf use degen as their native token, similar to the NFT chip platform zora. At this point, Degen's market cap has grown to around $70 million to $100 million. DegenCast will also use Degen to purchase creators' Keys.

Degen L3

Degen began its impressive journey on March 20. First, on March 29, Degen announced a partnership with Syndicate to develop a Base-based L3. The Gas token for Degen Chain is also DEGEN, and as of now, Degen Chain has conducted over 4 million transactions, with more than 100,000 wallets.

The second piece of news is that Merkle Manufactory, the parent company of Farcaster, raised funds at a valuation of $1 billion, led by the founder of Paradigm. Since Farcaster has not issued a token, the community began to view this financing as a positive development for $Degen.

Since the launch of L3, Degen's entire valuation space has been compared with major public chains, and it can even be said that $Degen has become the token of Base. The market cap skyrocketed like a rocket, soaring to $2 billion within days.

Inspiration for Degen

Degen originated from the Farcaster community and is rooted in the Base chain, which can be said to mutually achieve success with Farcaster/Base. The price of Degen attracts users; without the Farcaster community, Degen would not exist. The Farcaster community projects also provide an application scenario for Degen.

The narrative of Degen has evolved from a self-entertaining token of a community project to a social utility token of a core project, and then to a Gas token of a public chain. From $10 million to $100 million to $1 billion, each advancement represents a growth in valuation scale.

The rise of Degen also provides a path for the development of Farcaster community projects. Subsequent projects like Drakula, DegenCast, etc., are worth looking forward to.