Understand the Layer3 network narrative through the explosive rise of DEGEN chain

Author: TendX

Data on April 1 shows that in the past 24 hours alone, more than 27,200 independent transactions have occurred on the L3 chain DegenChain in just four days since it went online, with a transaction volume of nearly 100 million US dollars. The highest quotation exceeded US$0.06, and DEGEN has increased by more than 40 times in the past half month. The market value of the Degen project has also exceeded 1 billion US dollars in just three months. Its platform Farcaster is breaking user activity records, which shows its rapid growth momentum. The market has also released increasing excitement about L3 networks such as DEGENChain. signal of.

However, while the market is excited about the L3 network, this phenomenon has caused constant controversy in the community. PolygonLabs CEO Marc Boiron expressed his dissatisfaction with third-layer (L3) networks, saying that their existence is taking away the value of Ethereum, a view also echoed by HelusLabs CEO Mert Mumtaz, who believes that L3 will be Characterized as a centralized server in nature and positioned behind other centralized servers controlled by multisigs (L2).

With the popularity and influence of DegenChain, L3 network narrative has stood on the stage and gained enough attention. This article will focus on the Layer 3 network, from the popularization of underlying concepts to the successful analysis of DEGEN, and then share several excellent and well-known Layer 3 projects to discuss this blue ocean full of opportunities.

History of Development of Blockchain Network Solutions

Before understanding the Layer3 network, it is very important to understand the Layer 1 and Layer 2 blockchain.

Layer 1 refers to the basic layer of the blockchain network. Some common examples of Layer1 include Bitcoin chain, BSC chain, Ethereum chain, etc. Layer 1 blockchain networks provide the basic infrastructure for developing dApps, and developers can create layers for transaction settlement and verification for smart contracts, dApps, and other blockchain layers. Another important highlight of layer 1 blockchains is that they do not rely on any other network. As projects on Layer 1 sprout up like mushrooms after a rain, the network cannot bear the increasing amount of execution and calculation brought by the rapid development of the ecosystem. In order to complete transactions in the congested environment of the public chain, we have to pay high transaction costs. As a result, Layer 2 was born under the banner of fee reduction and capacity expansion.

Layer 2 networks are a key component in the development of the blockchain and Web3 landscape. Some common examples of Layer2 include Arbitrum, Optimism, Polygon, etc. The basic optimization logic of Layer 2 is to peel off and layer the functions of the public chain, leaving the consensus mechanism that provides security guarantees in Layer 1, delegating calculation and execution to Layer 2, and promoting the public chain to become the settlement layer of Layer 2. Compared with cross-chain and distributed Mechanisms such as slices are easier to implement and operate. While maintaining the decentralized model, Layer 2 maximizes operational efficiency, but is still insufficient in highly customized application scenarios and inter-protocol interoperability. This is an opportunity for the emergence of Layer 3.

The Layer 3 expansion solution is the next upgrade and improvement of Layer 2. Vitalik, the founder of Ethereum, also summarized when talking about the real-life application of Layer 3: "L2 is for expansion, L3 is for customization This kind of customization accurately matches the special scenarios used by users and the application directions preferred by developers. At the same time, L3 has weak trust expansion features, leaving data availability to a trusted third party or committee, further ensuring user privacy and usage security. ". Beyond that, layer 2 solutions fail to facilitate communication between different protocols. Users seek interoperable protocols and cross-chain dApps that allow them to move seamlessly throughout the decentralized service environment. The application scenarios for layer 3 solutions are clear and the demand has become a top priority.

The Rise of L3 Chain DEGEN

Launched on the Degen channel on Farcaster in January 2024, Degen has grown among builders, content creators and users. Allocate tokens among them. It reinvents the Farcaster ecosystem, allowing Casters to reward quality content creators using DEGEN tokens. As of April 1, there are 83,000 DEGEN token holders, with more than 553,000 transactions, and it is still growing rapidly.

DEGENChain is L3 tailor-made for the Degen community, which can make new attempts in tipping, community rewards, payments, games, etc. The team behind it is Syndicate, who have worked with multiple vendors such as Conduit, Decent and Airstack to perfect the convolution, bridging and data APIs. It is L3 built using ArbitrumOrbit, uses Base for settlement, and uses ArbitrumAnyTrust to provide data availability, thus ensuring low cost and scalability. This effort marks an important step towards EVM-compatible layer 3 solutions designed to expand the reach of community rewards, tips and payments. It is worth mentioning that what is unique about DEGENChain is that the DEGEN token is also the native Gas token of the chain, making it a pioneer in community tokens with its own L3.

Unique factors for rise:

1. Innovative airdrop and reward mechanism: DEGENChain introduces a unique airdrop gameplay to allocate reward amounts based on user activity and participation. This mechanism encourages users to create and share high-quality content, while also Promotes the circulation and value growth of DEGEN tokens. Since January, Degen has quickly become popular in the Farcaster community through high-quality reward activities. Community members can reward their favorite high-quality content in the form of DEGEN in terms of the number of comments. The airdrop amount is calculated each quarter based on the total amount of rewards users receive from others, so users need to post good content on Farcaster to receive rewards. Many active users’ daily reward amount even reaches thousands of dollars.

2. Community-driven development: DEGENChain originated from the Farcaster community, and the active participation of this community provides a solid foundation for DEGENChain. Community members use DEGEN tokens to reward high-quality content creators. This interactive model greatly enhances the cohesion and activity of the community.

3. Diversified application scenarios: DEGENChain is not limited to a single application, but has expanded the application scenarios of its tokens through cooperation with multiple projects and DApps, such as Drakula, DegenCast, etc. This diversification strategy makes the DEGEN token useful in different platforms and applications, thereby increasing its utility and appeal.

The decentralized Douyin Dracula on the Base chain was launched on March 14th. Dracula’s app uses DEGEN tokens as tokens. Users can use DEGEN tokens to purchase favorite bloggers, which is the application of DEGEN tokens. Added scenes and value.

4. Angel round financing brings financial support: In February, Degen announced the completion of 490.5 ETH (approximately US$1.47 million) angel round financing, and the funds will be used to develop the Degen ecosystem and community. Part of the share was given to some community projects, such as Drakula, etc., which also laid the foundation for Degen's utility.

5. Unique market positioning: DEGEN Chain is positioned as a paradise for meme coins and experimental projects. This unique market positioning makes it stand out in the field of cryptocurrency. It not only provides a testing ground for emerging projects, but also provides investors with high-risk, high-return investment opportunities.

DEGEN Chain Ecosystem:

DEGENChain has quickly distinguished itself as the Farcaster Ecosystem with its community-first approach and innovative third-layer blockchain technology A dynamic and rapidly expanding platform. In the first week of launch alone, developers have launched multiple applications on DEGENChain, the most notable of which are:

1. DegenSwap: DegenSwap is the most dominant on DEGENChain ’s decentralized exchange, which facilitates the trading and exchange of various cryptocurrencies, plays a vital role in the ecosystem’s liquidity and user participation.

2. Commemorative Coins: The popularity of various Memecoins such as $CET, $DINU, $PURP, etc. has soared. These tokens not only attract people's attention, but also encourage more users to connect with Degen Chain, promoting its active market activities.

DegenChain is rapidly evolving into an on-chain Las Vegas, providing a sandbox for cryptocurrency developers to explore community participation through tips, rewards, and games.

Sharing of well-known Layer3 projects

1.StarkWareAppchains:

It is StarkWare’s Layer3 solution, and StarkWare is one of the pioneers of Layer2 solutions.

StarkWare Appchains provides a high degree of customization. Developers can choose different consensus mechanisms, data availability models, network configurations, fee mechanisms, and even issue their own tokens to collect fees according to their own needs. By using Appchains, dApps can achieve better performance and cost-effectiveness on top of Starknet. Appchains allows optimizing performance, increasing throughput, and providing powerful custom solutions for decentralized applications. They also enable lower transaction costs and greater scale, providing users with a better user experience.

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