Meme Coins on Degen Chain Flourish as New Layer 3 Racks up Millions in Volumes
Degen Chain was released last week as a specialized network that sits atop Base, which itself is an Ethereum layer 2.
Apr 1, 2024 at 8:38 a.m. UTC
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- Degen Chain, a new layer-3 blockchain, has attracted significant attention and transactional volume since its introduction on Thursday. Its native DEGEN token has zoomed 500% since its release.
- The network does not have a supported stablecoin and primarily housed speculative tokens as of Monday, but that hasn't stopped speculators from trading millions of dollars in volumes.
The hot ball of money chasing meme coins from Solana to Base networks has found its way to Degen Chain, a so-termed layer-3 blockchain built on top of Base that began operations last Thursday.
The four-day-old network has recorded nearly $100 million in transactional volumes in the past 24 hours alone over 272,00 unique transactions, data show. On-chain analysts say over 7,500 contracts and 2,300 tokens have been floated on the network since Thursday—albeit mostly rug pulls or scams.
The biggest token by capitalization is that of Degen Swap (DSWAP), an exchange built on Degen Chain, which was valued at just over $14 million as of Monday morning. Non-serious token Degen Pepe (DPEPE) has a higher valuation at $23 million, but is a meme coin with no use beyond speculation.
Scores of tokens have a market capitalization of under $1 million, and are mainly serving as speculative bets.
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The network had no supported stablecoins as of Monday, and users can transact or trade only with the native DEGEN tokens. DEGEN changed hands at 6 cents as of European morning hours, up more than 500% from Thursday’s 1 cent levels, data shows.
What is a Layer 3?
Degen Chain is a layer 3 network built specifically for the DEGEN token. A relatively new development, a layer-3 blockchain is a customizable and application-specific blockchain built on top of layer-2 protocols. Layer 2s are networks built on a layer-1 blockchain such as Ethereum or Solana that can settle transactions faster and more cheaply than the underlying system.
The general idea behind a layer-3 network is to have a blockchain that can quickly and verifiably complete a very specific set of tasks. These tasks can range from payments to gaming transactions, and a layer-3 network will handle only those specific types of transactions.
The DEGEN token will be used as the native gas, or fee payment, token of the chain. Its developers say the chain enables new experiments with tipping, community rewards, payments, gaming and more.
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Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.