Farcaster's ups and downs: DEGEN's meme product revival

Original title: "Meme Super Cycle: DEGEN's Road to Meme Product Revival"

Original source: Bob Tech

Two months ago, when I was making the first video, Degen fell to the lowest point of 0.002$, but the number of on-chain addresses became the top 4 meme tokens. Today, two months later, DEGEN spot has landed on Coinbase and the price has risen by nearly 400% in a short period of time. It seems like a lifetime ago.

DEGEN July Fundamentals Analysis

Content Introduction:

Foreword

(1) Farcaster Economy and Degen;

(2) Degen’s “darkest moment” this year;

(3) Founder Jacek’s three transformations;

(4) Meme Supercycle;

Concluding Thoughts

Foreword:

I have been learning and playing at Farcaster for almost a year. FC has attracted qBuilders and qUsers. Although the daily active users have dropped by half from 100,000, the group of users who finally retained FC after this year are those who like original exploration. “Organic content” is still the reason why FC attracts me.

I think the Farcaster community is more like a "casual" product incubator rather than what the industry calls "SocialFi" or "web3 social". Many experimental products are deeply bound to the Far community. For example, the previous client-transformed cultural and creative evaluation https://nook.social/, the client https://kiosk.app/, the acquisition of mirror https://paragraph.xyz/, the transformation of FC fan token project MOXIE https://www.airstack.xyz/, etc. In addition to mature products, there are also groups (https://warpcast.com/~/channel/the-arena) where earlier products are being built-in-public every day.

Looking back at the development in the past six months, most of the early projects of Farcaster 1.0 have died down, and 90% of the projects that started with Party App and channel at that time now seem like a lifetime ago. However, as the most OG reward currency in the Farcaster community, Degen still continues to maintain product updates and community support. Although the transition to L3 was not smooth (there were downtimes in the middle) and there were many overly generous grants. But after several twists and turns, the community still grew together with the founder Jacek.

Conduit's downtime announcement

1. Farcaster economy and Degen

Farcaster is the platform that really made me want to study and output from an ordinary reader. With more than a year of development, FC has become a small on-chain economy. Every day, there are new early small products in internal testing, accompanied by a variety of Tokens and Airdrops.

Recently, the post "Farconomy" has become popular https://warpcast.com/luc/0x04ad2a6e, Farcaster is forming a small economy that is very different from the mainstream web3 community style. Farconomy has counted the on-chain assets that have emerged in this cycle, such as the early Base ecosystem meme $HIGHER, TYBG, and the project $BUILD that started from the Farcaster developer group, the fan token project moxie launched by airstack that has recently begun to gain popularity, and of course the big brother - the earliest community reward currency $DEGEN.

farconomy.com

Although Farconomy maintains the ability to continuously incubate assets, I think only DEGEN can cross the cycle and maintain product stickiness.

From the data, DEGEN still accounts for nearly 90% of the Farconomy economy. Although as the first generation of Farcaster reward currency, there are also many fork versions: such as HAM, but none of them have been able to maintain organic and continuous product iteration.

Snapshot date: October 7 / Source: DUNE

2. Degen’s “darkest moment” this year

After DEGEN officially transformed into a meme-exclusive chain Layer3 in May this year, after a brief correction, the community sentiment is still very high, and there have always been ecological partnerships and project grants. As the only VC institution 1confirmation (opensea, Polymarket investor), Mike publishes DEGEN daily reports every day https://paragraph.xyz/@degennews. It may be the norm for altcoins and memecoins. In the past six months, the market value has fallen by 90%. The community has also questioned the continuous decline. The DEGEN daily report made by 1confirmation also stopped in August.

Compared to the cessation of block production on the DEGEN chain in May, the market decline in the following months has tested the founder's confidence. However, with the strategic transformation of founder Jacek, DEGEN began to cooperate with wintermute market makers, and the community's sentiment has eased. Until last month, many members of https://warpcast.com/~/channel/degentokenbase were still expressing dissatisfaction and disappointment with the development of Degen.

Personally, I think Degen's transformation to Layer3 was a "trick" marketing decision that coincided with BASE Summer in May, but if most of the development resources are put into the transformation of layer3, and grants are still generously issued, it is a wrong decision to ignore the iteration of the product itself. Obviously, Degen's Layer3 through Conduit is a less successful attempt, just like the boring L2s.

DEGEN Weekly

3. Founder Jacek’s 3 transformations

The first: tipping currency transformation to Layer3 (2024-Q1)

The second: ecological grants, increase the number of users (2024-Q2)

The third: upgrade tips pledge function (vaults), cex listing (2024-Q3)

Dune: https://dune.com/bob_tech/farcasterda-shang-xiang-mu-degenshu-ju-fen-xi

This dune dashboard This shows the fundamentals of Degen products very well. $DEGEN, as a reward currency for farcasters, is no longer as popular and discussed as before, but the TVL data of its newly launched vault and layer3 have been setting new highs. It can also be seen that the founder Jacek has shifted his product focus. The demand for tipping products has weakened and turned to connectivity with other farcaster ecosystems and L3. Of course, the new vault staking and locking is also to give more back to core tippers, but I personally think that Degen should perhaps do more feature products around tipping and make "content reward" a product matrix.

DEGEN has developed an independent small ecosystem

Based on the recent tweets of founder Jacek, I think degen will usher in a wave of product adjustments and upgrades, and I hope that the "good article reward" product series can have new attempts.

Video link: https://www.youtube.com/watch?v=rNUVJynMSFk Supply and demand analysis (updated 2 months ago)

4. Meme Supercycle

The coolest speaker at Token2049 is Murad Mahmudov, and his "memecoin supercycle theory" is very worth discussing. He used data to show the ability of meme to cross cycles and the current VC project TGE embarrassment (high FDV and low circulation).

Murad's speech at 2049

Compared with previous cycles, meme also seems to be highlighting the "Lindy effect, and a series of "value projects and tokens" created by VC are losing their community foundation, from the PUA of points and endless Layer2s, making the originally "innovation-driven" industry dead.

Although Murad's point of view is full of emotional value, rationally speaking, the unpredictability of meme and the poor reliability of fundamentals are too poor, and its ups and downs of "short-sighted" style may make the industry more out of touch with future technology. I think relatively good memes have the following characteristics:

(1) Products that can be played with daily;

(2) Platforms and communities for daily discussion;

(3) High-quality memes that can be re-created.

Personally, I prefer meme communities that have products, and I naively hope that "product memes" can replace "emotional memes" to compete with VC projects in the market.

Trinity: Product + Community + Meme

Conclusion

Creating and developing something is difficult, and the success of any business is also difficult. From Farcaster, I have seen the ups and downs of many niche product startups. Degen's development this year is a relatively interesting case. From a simple one-man project to obtaining financing from 1confirmation, it has now developed into a small community with nearly 700,000 addresses. Although there have been many failed attempts at transformation, Jacek, as a former "skateboard boy", is still relatively optimistic and honest in facing problems and solving them.

It is also through this period of learning and output in fc that I have seen the development and failure of many independent products (not only DEGEN). After several precipitations, I also understand the value beyond price talk. Although failure is the norm, don’t rush to deny the exploration steps forward.

(This article does not make any investment-related suggestions or opinions, it is only for personal learning and content creation.)

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