2024-04-02
Launch just a week ago, the emergence of the Degen Chain network has attracted a considerable number of speculators, leading to both praise and criticism.
Degen Chain, created using Arbitrum Orbit, was introduced to the market on March 28th by Syndicate, an infrastructure provider.
It serves as a specialized ultra-low-cost network designed specifically for the Degen token ($DEGEN), which has rapidly become the community's token of choice for users of the Farcaster Web3 social media platform.
As Farcaster operates on Base, an Ethereum Layer 2 network, Degen Chain functions as a Layer 3 network, also known as L3.
The success of Farcaster and its parent company's pursuit of a unicorn valuation have contributed to the rapid growth of Degen Chain.
Early adopters of the Degen token have witnessed their small investments turn into significant fortunes. For example, one trader who invested less than $7,000 in the token managed to earn over $2 million in profits.
This success story is not uncommon in the cryptocurrency world, where meme-based cryptocurrencies often yield substantial returns. However, what sets Degen Chain apart is its growing user base, making it one of the first L3 networks to gain substantial adoption.
On Degen Chain, an ecosystem of additional meme-based coins, all denominated in $DEGEN, has seen trading volumes reach tens of millions of dollars.
Despite the excitement and success surrounding L3 networks like Degen Chain, there are critics who question their value and impact on the Ethereum ecosystem.
Polygon Labs CEO, Marc Boiron, recently expressed his dissatisfaction with the focus on L3s in a post, stating that L3s exist solely to divert value from Ethereum and onto the L2s they are built upon.
Boiron argues that scaling does not necessarily require L3 networks and believes that they drain security and value away from the Ethereum base layer. He further explained that if all L3s settled onto a single L2, Ethereum would essentially lose all its value and compromise its security.
However, Boiron's viewpoint has not been without controversy, and there are differing opinions on the role and importance of L3 networks in the broader Ethereum ecosystem.
It is worth noting that Polygon Labs, led by Marc Boiron, is renowned for its array of Ethereum Layer 2 scaling solutions, including the Polygon and Polygon zkEVM chains, as well as other services.
While Polygon zkEVM experienced a brief period of downtime last weekend, it has since resumed normal operations.
This incident highlights the challenges and complexities involved in developing and maintaining Layer 2 and Layer 3 networks.
