Degen Protocol: Experimental DeFi and Community Incentive Platform Based on PulseChain

Degen Protocol Project Introduction

Hello friends! Today, let’s talk about a project that’s been getting quite a bit of attention in the crypto world recently: Degen Protocol. Before we dive in, I need to clarify that there are quite a few projects with similar names in the blockchain space. Today, we’re focusing on the one that’s developed on the Base chain, with the token symbol DEGEN. You might have heard the abbreviation “DGN,” but the most well-documented and active ecosystem is the one with DEGEN as its token. There’s also a “Degen Protocol” on PulseChain with the $GOAT token, and another on CoinMarketCap called “Degen Protocol” with the symbol “DGN,” but the latter has very limited information. So, to provide you with the most comprehensive info, we’re focusing on the DEGEN project on the Base chain.

What is Degen Protocol

Imagine you’re in a very active online community, you share a great idea or create some fun content, and other community members think it’s awesome, so they “tip” you. Degen Protocol (token symbol: DEGEN) was born out of this concept. It started as a “community reward token” on the decentralized social protocol Farcaster, designed to encourage active participation and quality content creation.

You can think of it as a community “points system,” but these points are real, valuable cryptocurrency. It began as a simple meme coin (a crypto themed around internet culture), but quickly grew into a multifunctional ecosystem token with its own independent blockchain (called Degen Chain).

Its main user base includes active Farcaster community members, Web3 developers, crypto content creators, and enthusiasts curious about new things. DEGEN tokens can be used on Degen Chain to pay transaction fees, participate in various decentralized finance (DeFi) activities like staking to earn rewards, or to buy digital goods and support your favorite creators in apps that support DEGEN.

Typical usage flow: For example, you post a great message on Farcaster, and other users might “tip” you with DEGEN. You can also buy DEGEN tokens on crypto exchanges. Then, you can use these DEGEN tokens to trade on Degen Chain or participate in DeFi projects to earn more DEGEN.

Project Vision and Value Proposition

Degen Protocol’s vision is to build a vibrant, community-centric ecosystem. It aims to make decentralized finance (DeFi) features more accessible and engaging through unique incentive mechanisms and meme culture.

It seeks to solve two core problems: first, how to effectively incentivize users to keep creating and participating on Web3 social platforms; second, how to provide a cheap and efficient blockchain environment to support DeFi, GameFi (blockchain gaming), and NFT (non-fungible token) applications.

Differences from similar projects: Many crypto projects launch directly as a functional token or platform, but DEGEN is unique in that it started purely as a meme coin. Through strong community power and innovation, it developed its own Layer 3 blockchain (Degen Chain), and the DEGEN token became the “gas fee” (gas token) for this L3 chain—something very rare in the crypto world.

Technical Features

The DEGEN token was initially issued based on Ethereum’s ERC-20 standard, meaning it can circulate on Ethereum-compatible networks.

Degen Chain can be thought of as a “highway” custom-built for the DEGEN ecosystem. It’s a Layer 3 blockchain, meaning it’s built on top of another blockchain (the Base network), which itself is built on Ethereum. This layered structure is like: Ethereum is the main road, Base network is the provincial road connecting the main road, and Degen Chain is the country lane connecting communities, serving the DEGEN community with faster transactions and lower fees.

Degen Chain is built on Arbitrum Orbit technology, uses the Base network as its final settlement layer, and leverages AnyTrust technology to ensure data availability. This allows it to maintain decentralization while delivering high performance.

Consensus mechanism: As a Layer 3, Degen Chain’s security is largely inherited from the Base chain and Ethereum mainnet. This means it doesn’t need to maintain its own complex consensus mechanism, but relies on the robust security of the underlying chains.

Tokenomics

Basic token information:

• Token symbol: DEGEN. Note, this is slightly different from “DGN,” but usually refers to this project.


• Issuing chain: Mainly issued on the Base network, and is the native gas token of Degen Chain.


• Total supply: DEGEN has a total supply of about 37 billion tokens.


• Inflation/Burn: To encourage active community participation, DEGEN plans to introduce a 1% annual inflation rate starting in 2028. This means new tokens will be added each year, but the rate is relatively low, aimed at promoting ecosystem growth rather than heavily diluting existing token value.


• Current and future circulation: As of December 2024, the number of DEGEN holders is close to 800,000, showing a broad community base.

Token utility:

• Community rewards: On social platforms like Farcaster, DEGEN is used as a reward to incentivize user creation and interaction.


• Transaction fees: Any operation on Degen Chain, such as transfers or app usage, requires DEGEN to pay “gas fees.”


• DeFi participation: Users can stake DEGEN tokens or add them to liquidity pools to earn rewards.


• In-app payments: Within decentralized apps in the Degen ecosystem, DEGEN can be used to purchase digital content or support creators.

Token allocation: DEGEN’s allocation plan is: 70% for community participation, 15% for liquidity provision, and 15% for the project development team and early investors. This allocation emphasizes the importance of the community.

Team, Governance, and Funding

Degen Protocol is a typical “community-driven” project, meaning it’s mainly propelled and developed by an anonymous developer team and a broad community of members.

Governance mechanism: Its governance model also emphasizes community participation, encouraging members to propose suggestions and feedback, and to jointly decide the project’s future direction.

Funding: In February 2024, DEGEN successfully raised 490.5 ETH in a seed round, worth about $1.47 million at the time, providing early development funding for the project.

Roadmap

Degen Protocol’s development history and future plans are like a map that keeps unfolding:

Key historical milestones:

• January 2024: DEGEN was officially launched on the Base network as a community reward token for the Farcaster social protocol.


• February 2024: The project successfully completed its seed round, raising about $1.47 million.


• March 14, 2024: A decentralized short video platform, Dracula, went live and supports payments with DEGEN.


• March 29, 2024: Degen Protocol partnered with Web3 infrastructure provider Syndicate to launch its own Layer 3 blockchain—Degen Chain, with DEGEN as the native token.


• April 1, 2024: After DEGEN was listed on Gate.io and other exchanges, its price reached an all-time high, with a market cap close to $735 million.


• June 21, 2024: Launched Degen ENS subdomain service, allowing users to have personalized Degen domain names.

Future key plans:

• Phase 5: Game development and beta testing: Plans to develop a Degen PvP (player vs. player) meme-building game and conduct internal testing to optimize the gaming experience.


• Phase 6: Innovation and evolution: Continually explore new features and opportunities, improve the ecosystem based on community feedback and market trends, and seek listings on more decentralized exchanges (DEX).


• Phase 7: DeFi integration and game synergy: Plans to develop dedicated decentralized finance (DeFi) solutions for the Ton ecosystem and explore direct integration of DeFi features into Degen games, creating synergy between gaming and financial activities.

Common Risk Reminders

Investing in cryptocurrency always comes with risks, and Degen Protocol is no exception. Before participating, please be aware of the following:

• Technical and security risks: Any project based on smart contracts may have code vulnerabilities that could lead to asset loss. Additionally, underlying protocols or token contracts may be subject to hacking risks.


• Economic risks: The cryptocurrency market is highly volatile, and the price of DEGEN tokens may rise or fall rapidly, with the possibility of losing your entire investment.


• Compliance and operational risks: Global regulatory policies for cryptocurrencies are still evolving, and future compliance requirements may impact project operations.

Remember, the above information is not investment advice. Please do your own research (DYOR).

Verification Checklist

If you want to research Degen Protocol further, pay attention to the following:

• Block explorer contract address: You can view the DEGEN token’s contract address and on-chain activity via Degen Chain’s block explorer (explorer.degen.tips).


• GitHub activity: Check the project’s GitHub repository to see the development team’s code update frequency and activity, which often reflects project progress.

Project Summary

Degen Protocol (token symbol DEGEN) started as a meme coin on the Farcaster social protocol and, through strong community drive and ongoing innovation, has successfully developed into a unique ecosystem with its own Layer 3 blockchain (Degen Chain). It is committed to providing Web3 users with rich decentralized finance and gaming experiences through incentive mechanisms and low-cost transaction environments. The DEGEN token plays multiple roles in the ecosystem, including community rewards, transaction fees on Degen Chain, and participation credentials for DeFi activities.

However, like all crypto projects, DEGEN comes with various risks—technical, economic, and compliance. Before participating, be sure to conduct thorough personal research and make decisions based on your own risk tolerance. The cryptocurrency market is highly volatile; remember, this is not investment advice.

For more details, please conduct your own research.