Degen Chain, a recently developed layer-3 network on the Ethereum blockchain, has achieved the highest transaction per second (TPS) count within the Ethereum ecosystem in the past 24 hours. According to L2BEAT, Degen’s TPS count has increased by 62% over the last day, reaching 35.7 TPS, surpassing its underlying blockchain, Base, which recorded 29.7 TPS. The other top five networks in terms of TPS were Arbitrum One, Ethereum, and zkSync Era.
Degen Chain’s 35.7 TPS translates to approximately 3.08 million transactions processed within a 24-hour period, considering there are 86,400 seconds in a day. However, despite this high number of transactions, Degen Chain has only generated $819,600 in trading volume, ranking it 35th out of 44 blockchains tracked by CoinGecko. This indicates that the average value per transaction on Degen Chain is only $0.27, significantly lower than Ethereum’s $1,867 and Base’s $170.
Although TPS is a commonly used metric to measure a blockchain’s scalability, industry leaders argue that it is a flawed measure as it fails to consider the computational size of each transaction. Steven Goldfeder, a founder at Offchain Labs, compared it to counting the number of bills in a wallet without considering their denominations.
Degen Chain operates on the Degen (DEGEN) token, which initially served as a tipping token on Degen’s channel on Farcaster, a decentralized social media platform. This example demonstrates how a memecoin can accumulate social value. Thomas Tang, a vice president at Ryze Labs, a cryptocurrency venture capital firm, explained that the DEGEN token gained popularity through its use for tipping and widespread holding, leading to the development of a layer 3 blockchain.
Degen Chain currently has a total value locked of $4.1 million, while the DEGEN token, which is three months old, boasts a market capitalization of $326 million, according to CoinGecko. It is considered an ultra-low-cost, application-specific layer 3 blockchain that utilizes Arbitrum Orbit and leverages Base’s settlement layer, a layer-2 scaling solution for Ethereum.
In conclusion, while Degen Chain has achieved a high TPS count within the Ethereum ecosystem, its trading volume and average transaction value indicate that there are limitations to solely relying on TPS as a measure of blockchain scalability. However, the success of the DEGEN token and the development of Degen Chain highlight the potential for social value accumulation and the emergence of layer 3 applications.