social funding mechanism - degen

Benefits

• Non-dilutive tipping
• Enhanced community engagement
• Integration of social and financial activities

Limitations

• Reliance on token distribution methods
• Potential for limited liquidity
• Speculative

TL;DR

PIONNERED BY JACEK TROCIŃSKI

The DEGEN use case is an onchain social funding mechanism within the Farcaster ecosystem, incentivizing user participation through various reward systems like airdrops, liquidity mining, and an active presence on the Degen Chain.

Launched in January 2024 by Jacek Trociński, DEGEN is an ERC- 20 token that gained fast popularity by March 31, 2024 the $DEGEN token surged to a $780 million market cap.

WHO SHOULD USE IT?

This mechanism is ideal for content creators, influencers, and network builders looking to monetize their online presence through community tips and tech-savvy users interested in exploring innovative web3 technologies. It not only supports content creators but also fosters a vibrant community dynamic where members are incentivized to contribute positively to the ecosystem, knowing that their contributions can be directly rewarded by their peers.

FUNDING STRATEGY

DEGEN’s funding strategy leverages community engagement and onchain liquidity mechanisms. It allocates 25% of its token supply to liquidity mining programs and pools on platforms like Uniswap and Aerodrome, incentivizing user participation and liquidity provision. This approach aims to create a sustainable ecosystem that rewards active community members while maintaining DEGEN’s primary function as a social funding mechanism on Farcaster.

HOW DOES IT WORK?

To participate, users must hold at least 10,000 DEGEN tokens and make three casts (posts) on Farcaster. This qualifies them for daily tip allowances, which reset at 8am UTC. Users can tip others for quality content without reducing their DEGEN balance, fostering community engagement. Accumulated tips are distributed through monthly airdrops, rewarding active participants.

To get started, users can bridge ETH to Base using Coinbase Wallet, then swap for DEGEN using thecontract address 0x4ed4E862860beD51a9570b96d89aF5E1B0Efefed. Tipping is as simple as replying to a cast with the desired DEGEN amount. Tips received accumulate for the next airdrop event, where users can claim their rewards.

WHAT SETS IT APART?

Onchain Governance

Unlike traditional funding methods, DEGEN token holders can directly influence funding decisions through onchain voting
mechanisms.

Community-Driven

The success of the token and the funded projects are directly tied to community engagement and growth.

Liquidity Incentives

By being listed on decentralized exchanges like Uniswap, DEGEN creates liquidity incentives for supporters.