Degen's market cap exceeds $1.5 billion—how did it become the top memecoin on Base?
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Degen's market cap exceeds $1.5 billion—how did it become the top memecoin on Base?
Without the Farcaster community, Degen wouldn't have emerged.
Navigating Web3 tides with focused insightsText: XIN
Translation: TechFlow
If you've recently used the Base chain, you've likely heard of its hottest token, $Degen, now with a market cap exceeding 1.5 billion USD. Since the Degen channel launched on Farcaster in January 2024, users have been rewarding high-quality content creators using $Degen. To date, there are over 83,000 holders—and growing rapidly. So how did $Degen evolve into a multi-billion dollar “golden dog”? Let’s explore.
New Airdrop Mechanics (Rewards)
Since January this year, $Degen has rapidly gained popularity within the Farcaster community, where members reward quality content using the format "comment + DEGEN." Users receive daily allowances of Degen based on their activity and engagement levels on Farcaster. Airdrop allocations are calculated according to the total rewards received from others each season, incentivizing users to create valuable content. Many active users have even reached daily reward caps worth thousands of dollars.
Unique Community
The price of $Degen rose alongside growing community enthusiasm, pushing its market cap from $10 million to around $50 million. In turn, Degen also drove a wave of new user growth for Farcaster.
Pingfeng offered a fitting description of the Degen reward system:
"The mutual rewarding mechanism of Degen makes me feel like a group of people standing around a big bowl. Everyone holds a spoon of roughly the same size and can feed others but not themselves. How much they can eat depends entirely on how much others choose to feed them. The more they interact and reply to one another, the more rewards they receive."
Angel Funding Round
In February, Degen announced it had raised 490.5 ETH (approximately $14.7 million) in an angel round led by 1confirmation, with participation from Farcaster OGs and other institutions. These funds will be used to grow the Degen ecosystem and community. Notably, equity stakes were allocated to several community projects such as Drakula, laying early groundwork for Degen's utility.
Utility
Dracula, a decentralized TikTok built on the Base chain, launched on March 14. Created by Alex Masmej, issuer of fan token $ALEX, Dracula is backed by Paradigm.
Having previously received a grant of 10 million DEGEN (worth about $500,000 at current prices) from the Degen community, Dracula uses degen as its native token. Users can buy shares in their favorite influencers, similar to Friend.tech mechanics. They can also earn points by posting and watching short videos, sharing links, and purchasing creator tokens, with rewards distributed in BLOOD. Additionally, community projects like Bracket.Game and Rounds.wtf, akin to NFT marketplace Zora, use degen as their local currency. At this point, Degen’s market cap had grown to approximately $70–100 million. DegenCast will also use Degen to purchase creators’ Keys.
Degen L3
Degen began its remarkable journey on March 20. First, on March 29, Degen announced a collaboration with Syndicate to build a Layer 3 blockchain on Base. The gas token for Degen Chain is DEGEN itself. To date, Degen Chain has processed over 4 million transactions and hosts more than 100,000 wallets.
The second major development was Merkle Manufactory—the parent company of Farcaster—securing funding at a $1 billion valuation, led by Paradigm’s founder. As Farcaster does not issue a token, the community interpreted this financing round as positive momentum for $Degen.
Since launching its L3, Degen’s valuation potential has been compared directly to major public blockchains. Some now view $Degen as de facto Base’s native token. Its market cap skyrocketed, surging to $2 billion within days.
Lessons from Degen
Originating from the Farcaster community and rooted in the Base chain, Degen and Farcaster/Base have mutually propelled each other’s success. Degen’s rising price attracted users, yet without the Farcaster community, Degen would never have emerged. Meanwhile, Farcaster-based projects provided real-world use cases for Degen.
Degen’s narrative evolved from a playful community token to a socially useful asset, and ultimately to a gas token for a full-fledged blockchain. From $10 million to $100 million to $1 billion, each phase marked a significant leap in valuation.
Degen’s rise also charts a viable path forward for future Farcaster community projects. Follow-on initiatives like Drakula and DegenCast are highly anticipated.
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