Degen Chain, a layer-3 blockchain built on top of the Base network, has captured the interest of investors and traders due to its impressive transactional volumes, totaling close to $100 million in just a single day. Within four days of its launch, the network has processed over 272,000 unique transactions, establishing over 7,500 contracts and 2,300 tokens. However, it is crucial to note that a significant portion of these tokens are linked to rug pulls and scams, underscoring the speculative and risky nature of the cryptocurrency space.
Designed specifically for the DEGEN token, Degen Chain operates as a layer-3 blockchain, offering a specialized and customizable platform for various activities such as payments, gaming transactions, and more. The network utilizes the DEGEN token as its native gas token for fee payments, enabling a range of experiments including tipping, community rewards, and gaming. Notable tokens within the Degen Chain ecosystem include Degen Swap (DSWAP) and Degen Easter Eggs (DEE), with valuations exceeding millions of dollars.
The value of the DEGEN token has witnessed a significant surge, spiking from 1 cent to 6 cents within a short period, representing a more than 500% increase. As of the latest update, DEGEN is trading at 4 cents. Despite its rapid growth and substantial user adoption, some critics argue that layer-3 networks like Degen Chain may not be essential for scaling Ethereum and could potentially divert value from the mainnet.
The discussion surrounding the necessity of layer-3 networks (L3s) in scaling Ethereum was triggered by comments from Polygon CEO Marc Boiron. Boiron contends that L3s are unnecessary for scaling existing networks like Ethereum and may detract value from the mainnet. While some argue that Layer 2s (L2s) on Ethereum represent value on the mainnet, Boiron emphasizes that an over-reliance on L3s settling on one L2 could diminish Ethereum’s value and security.
Despite the criticism from Boiron, others in the crypto community see potential benefits in layer-3 networks that are independent of Ethereum’s value. These advantages include cost-effective native bridging from L2s, efficient on-chain proofing, custom gas tokens, and specialized state transition functions. Ethereum co-founder Vitalik Buterin has also expressed a more open perspective on L3s, suggesting that they could offer unique functionalities that complement L2s rather than compete directly with them.
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