What Is Degen (DEGEN) and How to Buy DEGEN

Discover how Degen, a cryptocurrency developed to bridge the gap between online contributions and real-world value, is transcending its meme coin origins.

Key Takeaways:

• DEGEN was developed as a simple reward mechanism to facilitate community engagement on the decentralised social platform Farcaster.

• The DEGEN project is decentralised, with 70% of tokens earmarked for the community, 15% for a liquidity pool, and 15% to support the team, early adopters, and the broader ecosystem.

• DEGEN gained utility with the release of DEGEN Layer-3 Chain, a blockchain using DEGEN for gas fees instead of ETH, and reached an all-time peak value of $0.06287 on 31 March 2024.

• DEGEN has secured partnerships to raise awareness and build utility.

What Is DEGEN?

DEGEN, an ERC-20 token launched on 8 January 2024, aims to reshape the Farcaster ecosystem. Farcaster, a decentralised social platform operating on blockchain technology, minimises data breaches and censorship while promoting transparency and security. 

DEGEN’s creator, Jacek Trociński, has no formal ties to Farcaster and developed DEGEN as a community meme coin airdropped to ‘Casters’. The token rapidly gained popularity, and Trociński began developing a dedicated DEGEN blockchain. 

The meme coin enables Farcaster users to reward others for quality content through a point system that recognises unique posts and comments. This system bridges the gap between online contributions and real-world value, with one point equating to one DEGEN token.

DEGEN’s appeal now extends beyond Farcaster, with availability on major platforms like Crypto.com having increased community interest. Additionally, the project has partnerships in the decentralised finance (DeFi) space to improve its visibility, including with Decent.

How Does DEGEN Work?

DEGEN operates similarly to other decentralised digital currencies and, as an ERC-20 token, is easily accessible on the well-established Ethereum blockchain, which records transactions on a public ledger and verifies them by Proof of Stake consensus. DEGEN also supports smart contracts and has its own blockchain in development that’s expected to reduce transaction fees and processing times. However, it lacks a formal white paper and roadmap, instead using its website and official X account to update followers.

DEGEN is currently in ‘Airdrop 2’ to distribute tokens. Users with at least 10,000 tokens receive a ‘daily tip allowance’ to distribute to Farcaster creators however they see fit. Tips are left in a Caster’s comment section. For example, commenting ‘100 $DEGEN’ gives 100 tokens to the post creator. Tip allowances disappear if unused, encouraging the community to interact every day. Safeguards are also in place to prevent token farming. 

The model is working, as DEGEN’s price reached an all-time high (ATH) of $0.06454 on 31 March 2024. Wider adoption on crypto exchanges has given DEGEN more visibility and perceived legitimacy. Farcaster has embraced DEGEN as its de facto token, and interest began soaring as crypto X users migrated to the platform. DEGEN received $1 million from the VC firm 1confirmation and closed a $1.5 million angel round, providing the project with a tremendous infusion of capital. 

DEGEN’s value declined from its ATH thereafter, but demand for the token remains high. As of this writing, DEGEN has 465,000 holders and six million processed transactions, with a market cap of almost $102 million and nearly $18 million of trading volume per day. 

The Tokenomics of DEGEN

Initial Supply

DEGEN launched with an initial supply of 37 billion tokens. Of these, 70% is in circulation for the community, 15% in a liquidity pool, and the remaining 15% supports the creators, early adopters, and the broader community. The DEGEN project plans to maintain an annual inflation rate of 1% beginning in 2028. 

Airdrops

DEGEN distribution takes place via airdrops. ‘Airdrop 1’ distributed 15% of the total supply and is officially closed. ‘Airdrop 2’ happened in July 2024 and distributed 20% of the total supply. ‘Airdrop 3’ will happen at an undetermined point and distribute 25% of the total supply. To date, DEGEN has a circulating supply of approximately 14.2 billion tokens. 

Meanwhile, the developers have an ambitious plan to raise awareness while boosting the token’s utility — a dedicated Layer-3 (L3) blockchain. 

The DEGEN L3 Chain

When DEGEN launched, many experts classified it as a meme coin, but that perception is changing. The DEGEN L3 Chain is currently in beta testing and will transform DEGEN from a token tied to a specific social platform to the foundational element of a new decentralised ecosystem. 

The DEGEN L3 Chain is a Layer-3 blockchain built on Arbitrum Orbit that integrates with the Base ecosystem, an Ethereum Layer-2, allowing developers to create decentralised applications (dapps) around DEGEN. It settles transactions using Base, while relying on the Arbitrum AnyTrust protocol for data availability functions. DEGEN is the native token, allowing traders to pay gas fees instead of Ether.

Most important, the DEGEN L3 Chain has low transaction fees to encourage widespread use. It is still in the experimental stages but offers a utility most meme coins cannot. This could increase interest in DEGEN and drive its price up. However, the DEGEN blockchain is not guaranteed to advance beyond beta testing. 

Where Will DEGEN Be in 2024?

Cryptocurrencies are volatile assets, and DEGEN may be more volatile than other coins, as smaller cryptocurrencies may be more susceptible to price fluctuations based on macroeconomic factors. Traders also cannot examine long-term price trends since DEGEN launched in early 2024, and at least some of DEGEN’s value depends on Farcaster’s success as a social platform. 

The DEGEN L3 Chain is an ambitious project with potential — but no guarantee. DEGEN also lacks a white paper.

However, since many crypto traders chase volatility for the price upside it creates, DEGEN offers the potential for price upside in 2024 and beyond. Nobody can say for sure whether it will appreciate in value, though. Traders should never put more money into a crypto asset than they can afford to lose. 

How to Buy DEGEN

The Crypto.com App makes purchasing DEGEN easy. Below is a convenient step-by-step process to get started:

1. Download the free Crypto.com App from the Apple App Store or Google Play.

2. Complete a straightforward sign-up process.

3. Fund the account. Bank transfers support numerous fiat currencies, including USD, EUR, and GBP, and may take 1–3 days to clear. Alternatively, users can instantly fund their account using a debit card, credit card, or Apple Pay.

4. Users can start buying DEGEN and 250-plus other tokens as soon as their account is funded. 

Conclusion

DEGEN is an interesting token because it combines meme coin origins with a plan to become something more. It serves a useful purpose in helping content creators monetise their work on Farcaster and may become the native currency of a large decentralised network. However, DEGEN also has a limited track record, and much of its utility is tied to a blockchain that’s still undergoing testing. The lack of a formal white paper could also be a concern. 

Purchasing DEGEN is a decision requiring an examination of risk tolerance and goals. The potential is there for price appreciation, but multiple pitfalls could lead to substantial losses.

Due Diligence and Do Your Own Research

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