How did $Degen grow on Farcaster and what can be learned from it? First to know Degen came before Frames were a thing so it didn’t bootstrap users with a Frame launch, but now the community has built many useful frames.

Initially Farcaster users felt that as the network was growing the speculation and coin conversation should be moved to it’s own corner of Farcaster. It’s own channel, where channels behave like subreddits on reddit or hashtags on Twitter. This was the birth of the degen channel which is named “degen” as short form of degenerate to mark that coin speculation can be seen as degenerate gambling and one should make their own decisions.

Why was this move even a thing people wanted? To understand one needs to know how Farcaster got it’s earliest users which is by invite. In October 2023 Farcaster onboarding opened to anyone, but before that you had to be invited by someone on Farcaster which created a heavily curated user group that mostly did highly serious information exchange and responses.

The thoughtfulness of Farcaster replies, interactions and engagement is what makes Farcaster special and the vibe is dear to the hearts of any early Farcaster community member and so when more and more users came in the vibe of course starts to shift which led to the idea of having a channel for the more speculative discussions.

The speculative community channel /degen of course took off as speculation is a large part of any hyper financial industry and crypto is no exception.

The takeoff was moaned by many, though since permission less onboarding /degen is the most active channel for new users and also overall on the social network revealing many users do like it even if a few may not.

Then an idea came around in January 2024 to award people that contributed to discussions on Farcaster and the degen community with a token airdrop. $Degen was born and the webpage degen.tips created to have a TLDR resource for anyone wanting to claim the airdrop, learn about Degen and see what is next.

Source: https://warpcast.com/jacek/0xa4b9f644

What came next is that the second airdrop was done via tipping. By replying to content with “100 $degen” you tipped 100 degen to a user to be claimed in the next airdrop. The idea is to have a native way to reward outstanding resources and content being shared. The distribution here is simple as replying will make the original content creator and the followers of the one replying see the comment $degen can be seen around all of Farcaster. Viral marketing dynamics built into the way to earn.

The $Degen tipping rounds ensured that everyone on Farcaster knows what $Degen is and people sign up so they can earn $Degen. Degen escaped the Farcaster network and made it around the whole crypto community which speculators, airdrop hunters and generally curious people coming together in the Degen community.

Today $Degen is seen as a general Farcaster community coin that is a fun way to interact with others and have discussions. Tips are used to pay people to engage with content, reply their thoughts or pay simple bounties like “Show me the best 3 food places in NYC. 500 $Degen to anyone who replies with recommendations!” which encourages people to recommend their favourite food places and costs you nothing as you can simply tip the $Degen which are then allocated in the next airdrop (though you have a limit of how much you can tip each day).

Building on top of the simple $Degen coin and the existing community are developers who build Frames that allow you to see how much $Degen you will get in the next airdrop, how much you can tip and other statistics. App like Drakula (a Farcaster Video client in TikTok style) where $Degen besides ETH are the only currencies available to tip content creators.

Integrations like Frames being build, Drakula and the general community growing further strengthened the network effects of $Degen being the “community coin of Farcaster”.

The initial user base so to say was bought with the first airdrop and the perfect coin to community fit in the /degen channel where coin lovers gathered.

Additionally Jacek (the originator of $Degen) has made an amazing effort in the community to foster adoption from Developers, OG Farcaster’s with followings big or small and players in the ecosystem like the Base team.

What did Jacek do? Looking at the Tokenomics one can clearly see how more laid out and thought thought the $Degen launch is then just putting up a Smart Contract on a Blockchain to call it a token.

The allocation is clearly developed to have liquidity for trades which allows $Degen to be actually used and traded by people without any issue and sparing it from any negative PR of people not being able to sell their Airdrops or those without an Airdrop buying into $Degen not being able to get enough liquidity on the coin side of the equation.

Tokenomics

But how did the actual Aidrops perpetuate $Degen to be THE social currency of Farcaster on the serious and meme side? How come that it is a coin that is now respected by everyone even those that hate the speculation and forced the /degen channel creation in the first place?

The underlying mechanic is what is so unique and resonated so well with even the speculation haters which is the tipping. To use @syed’s words “Basically, every caster is awarded a daily allowance based on their cast/reaction ratio (quality of their casts.)”

Quality of casts is all that Farcaster people care about. Becoming a so called qDAU (quality daily active user) is the end goal of anyone active on Farcaster. The meaning here is being a valuable addition to the network, fitting in.

Additionally tip me and I tip you back is filtered out of the final Airdrop allocations after tipping so you are actively in need of quality contribution to earn. Quality to earn is what $Degen innovated and brought to a heavily quality focused group of early adopters and techno enthusiasts that also speculate a lot.

From just that sentence alone you can see how well of a fit it really is and it’s simple to understand for everyone.

Jacek at the time of the launch was sitting at less than a thousand followers which didn’t give an edge in terms of followers to hype the token and position it. So there must be something else right?

That something else is Farcaster and it being a Social Network. Every single post about Degen and in the /degen community shows up on the feed of every single follower that the one posting has.

So if an account with 20.000 followers posts about getting the airdrop or asking what to do with $Degen then all of their followers potentially see it and ask themselves which perpetuates the conversation around $Degen. How prevalent Degen is can be seen by how often it’s mentioned: Source

Add on top the initial allocation of tokens being used for bounties that 1) create Memes in /degen, 2) build Frames aka Tooling that uses $Degen and crowdsourcing the logo.

Each of these focuses builders attention on earning tokens and spending time with the ecosystem. Additionally to enable developers there are APIs available for the tipping mechanism used so you can integrate that statistics and show them in your own applications.

And you don’t even need permission to do so as there is no signup required for the API and the $Degen token itself is also permission less. It is simply a currency (ERC20) on an open Layer2 (Base) anyone can use, which is exactly what bracket.game a Sports Fantasy application has done.

For the College Basketball March Madness they integrated $Degen as the only token you can place bets with. Why?

Bracket.game leveraging the $Degen community makes so much sense as degenerates and speculators like to bet and it also is good for $Degen as it creates buying pressure and brings sports fans that didn’t know $Degen to that community as well.

https://warpcast.com/bracketgame/0xb5fcddb4

If you want to track $Degen adoption in Farcaster you can also look at Bounties posted on bounty caster.xyz that use $degen as the currency to be paid out on completion.

Also there are now salaries being paid in $Degen with the first being a continuous development job for a smart contract. https://warpcast.com/proxystudio.eth/0x6c21c7e9

There will be more integrations and fun things coming out of the community as $Degen has emerged as the social currency and perpetuates along with Farcaster.

Note: I was Airdropped $DEGEN tokens when they launched and may or may not be holding $DEGEN tokens. This is not an endorsement. This is a factual writeup of events.