Degen's Market Cap Exceeds 1.5 Billion, Reviewing the Rise of Degen

Recently, the token $Degen on the Base chain has become extremely popular, with its market cap surpassing 1.5 billion US dollars. So, how did $Degen develop into a hot project with a market cap exceeding 1.5 billion US dollars？

After the Degen channel was launched on Farcaster in January 2024, it allowed users to reward high-quality content creators with $Degen. So far, there are already over 83,000 holders, and the number is still growing rapidly. This article analyzes the situation from four perspectives.

Innovative Token Distribution Rules

Since January this year, $Degen has rapidly gained popularity in the Farcaster community. Community members reward their favorite high-quality content by commenting +DEGEN. Degen rewards users daily based on their activity and engagement on Farcaster. The airdrop quota is calculated based on the total rewards received from others each season, so users need to post high-quality content on Farcaster to earn rewards. Many active users have even reached the daily reward cap of several thousand dollars.

Capital Support

In February, Degen announced the completion of a seed round financing of 490.5 ETH (approximately 14.7 million US dollars), 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 been allocated to some community projects, such as Drakula, which has also laid the foundation for the utility of Degen.

Token Empowerment

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

Due to previously receiving a subsidy of 10 million DEGEN from the Degen community (currently worth approximately 500,000 US dollars), 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 buying creator tokens, and use BLOOD for rewards. Additionally, similar to the NFT chip platform Zora, community projects Bracket.Game and Rounds.wtf use $degen as their native token.

Positive Development Status

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

Additionally, Farcaster's parent company, Merkle Manufactory, raised financing at a valuation of 1 billion US dollars, led by the founder of Paradigm. Since Farcaster did not issue tokens, the community began to view this financing as a positive development for $Degen.

Since Degen launched L3, its entire valuation space has been compared with major public chains. Its market cap has skyrocketed, surging by as much as 2 billion US dollars in just a few days.

Summary

Degen originated from the Farcaster community and complements Farcaster. Due to its positive development and token empowerment, Degen's market value has continued to soar. With the rapid rise in token prices, it has attracted more attention to related products, forming a positive feedback loop.