Of the millions of tokens on Matcha, one meme coin in particular has been going viral on decentralized social media protocol Farcaster: Degen. While Web2 platforms like Twitter are being overwhelmed by bots shilling the latest premined airdrop, Warpcast threads are lovingly spammed with Degen tips from other users. 

“What’s the difference? Spam is spam!”, you might say. Yes, if you pick a trending cast on Farcaster you’ll probably see a dozen or more replies saying the same thing, “420 $Degen”, but these comments are rewarding the original caster for their content. Degen is an eyesore for some, but behind it is one of the fastest growing communities in Web3, and it’s beginning to become more than just a meme. Let’s dive in!

What is Degen?

Degen is an ERC-20 token originally launched on Base Layer-2 (L2) that was distributed to Farcaster users through airdrops, according to engagement within the ecosystem. Degen token’s official contract address is 0x4ed4e862860bed51a9570b96d89af5e1b0efefed.

Trade Degen on Matcha now!

Although originally designed as a meme coin awarded to active content creators, Degen has gained utility over time and has started to be adopted in other ways and on other platforms, as even centralized exchanges have now listed it.

Degen chain, a Layer-3 network built on top of Base was also launched after this article was first posted, and Degen token is the native token used to pay for transaction fees. A new token, Wrapped Degen (WDEGEN) also launched with the L3 network.

Degen airdrop eligibility

Degen token airdrops are distributed as a virtual daily balance you can use to tip other users on Farcaster. Your tipping allowance is simply the amount you can give to others, not the amount you get to claim. You can only claim tips and withdraw Degen to your wallet if they have been gifted to you by other users. Any unused tips are lost when the daily allowance resets, and tips you receive can be claimed until the end of the season (usually at the end of the month).

At first, eligible users had to subscribe to the Degen channel and hold a minimum amount of Degen in their Farcaster-connected wallet. Once you were eligible, you would be awarded a daily tip balance according to how many points you have, and could gift those tips to other Farcaster users by commenting a number followed by $DEGEN under their posts. Tokens would then be distributed and made claimable at the end of the month. This has since changed.

In the latest airdrop season, Degen has adopted a staking model. You must deposit a minimum of 10,000 DEGEN to the Degen Vault for a minimum period of 3 months to be eligible for your daily tip allowance. Your tipping allocation would then be determined by the size of your locked token amount compared to the overall size of the pool.

You can check your allowance, deposit Degen to the Vault, and claim Degen from tips you have received by visiting degen.tips and connecting your wallet. Your Degen tip allowance is not spent from your wallet and gets refilled at the end of each day, so there's no need to hold back - there's a maximum allowance of 10,000 DEGEN per day so make sure to use it all, and produce good content that others will want to gift you their Degen in return, which you can then claim! 

With the new Degen Vault staking model, you only need to stake Degen to receive your tipping allowance. You do not need to keep 10,000 Degen in your wallet, as was the case in previous Degen airdrop seasons. Note that if you are already staking Degen and later add more to the Vault, the 90 day lockup period will be reset, meaning you will not be able to withdraw the original amount until 90 days from the latest deposit.

History of Degen token

Degen started as a Farcaster channel where users congregated to discuss the future of another memecoin, Points token, which had seen some controversy at the end of 2023. Degen is a term used by self-identified crypto degenerates who acknowledge their often irrational actions, such as investing money into a project like 'Points' just for fun, and who embody ‘up-only’ culture by keeping positive vibes flowing even when they’re down bad.

Degen token was introduced as a series of airdrops for the channel, starting in January 2024. Launching on the Base L2 network, it tapped directly into Farcaster engagement metrics, allocating points to channel participants as a reward for creating engaging casts. Those points translated into a share of the first token airdrop.

The second Degen airdrop put more control in the hands of Farcaster users, who were given a daily points location which they could use to tip other casters simply by commenting a Degen amount. This created a feedback loop where allocations increased based on the previous day’s engagement and tips received. At the end of the first season of Airdrop 2, points were again converted into a share of Degen tokens. 

Airdrop 2 is now wrapping up its sixth season, and Degen tips remains much the same - comment on a post with a message in the format <amount> $DEGEN, e.g. '10 $DEGEN' - though there are some differences.

First, the Degen Vault staking mechanic mentioned above was introduced to better manage user allowances and keep participation in the ecosystem healthy, following several seasons in which users saw smaller allowances for being less active on Warpcast.

Next, a new Degen Raindrops feature was introduced, in which you can 'make it rain' and give a share of a set amount of Degen to anyone that replies to your cast, by including the message rain <amount> $degen in your text. Any replies which you click Like on will receive an even share of the total Raindrop reward.

Degen usage has also begun to bleed into other communities both within Farcaster and elsewhere, including crypto-native apps such as Drakula, Perl, and even Zora, where you can now mint NFTs with Degen!

Liquidity providers are also eligible for airdrops by adding DEGEN and WETH to the Degen pool on Aerodrome or Uniswap v3.

Degen L3 on Base

The next phase of Degen is the launch of the Degen Layer-3 (L3) chain on Base. This promises to offer lower fees than Base itself, which saw a sudden spike to around $8 per transaction despite the massive gas fee reductions achieved by ERC-4844 in the Ethereum Dencun upgrade. These fees have since been reduced by several orders of magnitude thanks to efforts from the Base engineering team.

Degen Layer-3 launched soon after this article was first published, powered by Syndicate, using other providers including Conduit, Decent and Airstack. Airstack was originally included in this article following the announcement of their strategic partnership, providing APIs for developers building on the Degen L3, for which they received a $3 million Degen grant. Despite a strong start, usage of Degen L3 has dwindled according to the Dune Analytics dashboard.

Bridging to Degen L3 chain

You can bridge Degen token to Degen chain using the official bridge at bridge.degen.tips. While deposits will take only a few minutes, withdrawing your tokens back to Base are subject to a delay of 7 days. This is a security measure related to optimistic rollups, a feature of the Arbitrum Orbit bridge that Degen L3 has been built on, ensuring there is ample time to validate transactions. Learn more in our blog on Layer 3 networks which includes a look at how Degen chain came to be.

Deploy on Degen hackathon

In April, a virtual hackathon called Deploy on Degen week was held in order to increase the amount of applications and utility of Degen chain.

Farcaster frames and Degen

Farcaster Frames are interactive applications that can be embedded directly in Farcaster posts. They have played a major role in the massive surge in Warpcast activity since early 2024 and introduced a range of new use cases to the platform. 

Frames and Degen have a mutually beneficial effect on one another. Since Degen is awarded to engaging posts, it has incentivized builders to create Frames which captivate the community and push the boundaries of what is possible.

In return, Degen has also benefited from being a preferred currency for interacting with Frames and claiming rewards. Matcha has already gifted millions of Degen to users through Frames.

While both Frames and Degen token operate independently of each other, together they have created a circular economy native to Farcaster, and this continues to be strengthened as usage increases both within the ecosystem and outside of it. 

Why is Degen trending?

Degen is frequently seen in the Matcha trending token list for weeks, even outside of significant price changes. Farcaster itself has seen sustained momentum as Frames and other features are being built out, and Degen may benefit from being closely associated with Farcaster as a whole, as well as speculation over future utility. 

Although the value of Degen has now increased and decreased several times over, the rate of tipping has been fairly sustained, indicating that it still retains its meme status and lightheartedness, which may be attributed to the fact that tip allocations are reset each day and do not come out of the tipper’s own Degen balance.

More than a meme coin?

While Degen has all the hallmarks of a meme coin, it was designed to foster an engaging community and incentivize quality content, something which was made possible by the Farcaster protocol. Degen is still very much a meme in terms of its cultural position, but it has also found wider utility that resonates with the emerging Farcaster community and Web3 users in general. 

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As Farcaster goes from strength to strength, Degen and Frames have caught the attention of a wider audience and may be the catalyst for growth that decentralized social media has long needed. Try it for yourself and get Warpcast today!