Degen Meaning in Crypto | Degen Web3 Glossary (2024)

Degen is a crypto slang term derived from the word “degenerate“; it is used as a meme in a funny manner in the cryptocurrency space. Degen meaning or slag refers to individual crypto traders who frequently engage in highly risky and speculative trading strategies in crypto. Degen traders are ready to take extreme risks while chasing exponentially high returns. Such strategies may work during a crypto bull market.

Key Takeaway: ‘Degen’ is a web3 slang derived from the english word ‘degenerate’, it is used in the crypto space to refer to traders who engage in highly speculative and risky trading.

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Example sentence: Being a degen is a risky way of life 🫡

What is a Degen meaning in web3?

In decentralized finance (DeFi), a degen does not have a practical end goal. They are mostly after more and more capital.What makes a degen different from the other class of crypto investors is that they make rash investment decisions, buy into Ponzi schemes, can be quite greedy at times, and are targetted by FOMO every now and then.

In order to quench their thirst for more, Degen end up making the riskiest of the deals, seeking out the highest yields, and even going on to the extent of using ‘pump-and-dump’ schemes.

This term gained popularity as the hype around crypto and NFTs went up. Increasingly, as the crypto industry expands, it attracts more people seeing crypto as a shortcut to getting rich overnight.

Here are some examples of Degen making returns and of loosing their investments:

Ghozali Ghozalu, a 22-year student minted his selfies of four straight years as NFTs on Opensea. Since it was an unusual thing for NFT degens, they jumped and started investing, resulting in Ghozali earning around 1.1 million dollars. So, degens made him rich in just a matter of days.

Another degen example can be found in famous YouTuber Logan Paul who jumped on a trend without much knowledge and bought an NFT for $623k. That NFT is now worth only $10. He later admitted his mistake.

A year ago, I spent $623,000 on an NFT. Today, it’s worth essentially nothing. I’ve immortalized this mistake in 99 Originals with an exact replica helmet & outfit.

Logan Paul

Both examples are perfect representations of degen meaning. They take a high-value risk that can go both ways. Either you can make a lot of money or lose a lot of money hence it is always better to DYOR before investing.

Origins of the term ‘degen’

But how did the term become popular? Mostly used in a lighthearted banter for self-deprecating humor the term was first coined as slang in the betting industry.

Gamblers who lacked the experience and knowledge ended up risking all their chips and hard-earned money in betting and gambling. They are referred to as Degens and are looked down upon by the experienced gamblers. They take irrational risks to earn more returns but rarely succeed. But conversely in crypto industry, the crypto traders wear it on their sleeves as a badge of honor and pride.

This is perhaps because when crypto came off as the big new thing in the market, people were a little apprehensive about it. But those who truly did believe in it, had the guts to try something new thus they invested big chunks of their money.

Today, there are crypto communities that have been shaped by the very term and they seem to be quite happy with it.In simpler terms, a DeFi degen in crypto is someone who without properly doing your own research (DYOR) identifies a classy project such as the Bored Ape Yacht Club and invests in it.

How do you identify as a Degen?

Degen in crypto are also referred to as believers who believe that their investment will yield great returns. They share some resemblance with a particular class of investors known as bulls who generally have a positive attitude toward the overall coin prices, and are full of self-confidence.

But, how do you recognize a degen? Some of the pointers have already been mentioned but don’t worry, we’ll reiterate them. Following are the characteristics of Degen.

1. Rarely DYOR

Do your own research (DYOR) is a concept mostly alien to degens in crypto. A decentralized market happens to be more volatile than a centralized one and investing in projects without prior research and study is like digging your own grave.

Thus, by the behavior, the existing knowledge, and the way of making decisions, you can tell whether a person is a degen.

2. Dull portfolio

A portfolio is the most important and significant thing that an investor owns. There is little difference between investors in DeFi and centralized finance. A lot can be inferred about an investor just by looking at their portfolio.

However, if the portfolio is not diverse as if the investor has invested all the money in just a single currency, it may have an impact on the investor’s overall credibility and reputation. Thus, this is another way to recognize a crypto DeFi degen.

3. FOMO and overtrading

As mentioned, degens always have a fear of missing out. This leads to them making impulsive decisions and uncalculated judgments. Degens can also go on to the extent of taking out hefty amounts as loans and investing them in a cryptocurrency.

Moreover, they are very much into buying and selling cryptocurrencies within short spans of time primarily because of the thrill they get in doing so. If you notice such behavior and find it odd, don’t worry, it is just a degen.

Should you be a degen?

Hmm. Now that is an interesting question. While it totally depends on the taste, patience level, work ethic, and end goal of an investor, here are some quotes by some crypto founders that can help you decide whether you should be a degen.

“The best way to make money in crypto is to do the opposite of what degens do.”

– Balaji Srinivasan, former CTO of Coinbase.

“In crypto, there are many ways to make money, but there are even more ways to lose it. Don’t be a degen.”

– Changpeng Zhao, CEO of Binance.

So, degen or no degen? That’s up to you, fren.

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