Degen Tips Ultimate FAQ: V8 (June 2024)

Did you know:

• Only a few hundred people control most of the daily allowance? We show you how to find them.

• You can't over-tip anymore, you can't delete tips, and over-tipping by accident can't be reversed?

• The future of Degen Tips will be changing dramatically in the next few weeks.

• Full details down below 👇

I'm not a Degen team member. Nothing I write is financial advice, or a recommendation to take action. This is a collection of my personal notes, documenting facts and observations. Always do your own research. 🫡

If you just want to know what's changed, read the latest update post - but know that there's so much that's changed you'll need to come back here anyway!

If you've missed more than one update, there's a full list of updates you can read through.

New or updated material is marked with a 🌟 emoji. You can search for that emoji to easily find this material.

$DEGEN is a blockchain token that can be exchanged for other tokens or cash, or used to purchase products and pay for services on Base Chain or the recently created Degen Chain.

Degen Tips are a way for members of the Farcaster community to indicate who they believe should receive $DEGEN during Airdrops.

Tips are a way to reward others with $DEGEN for posting quality content, thereby incentivizing the authentic growth of the Farcaster social network. The Degen project is not affiliated with Farcaster.

Degen Tips are not the same thing as $DEGEN tokens

👉 If you've received $DEGEN tokens, you hold actual cryptocurrency tokens in your wallet that you can send to others, or swap for some other token.

👉 If you've received $DEGEN Tips, you actually only have airdrop points that you'll still need to exchange for $DEGEN tokens at the end of the season. Tips are not always guaranteed to be converted into tokens. See Receiving Tips for details.

Raindrops are a new feature provided by the Degen Tips team to distribute $DEGEN tokens among specific replies to a raindrop cast. This FAQ has a separate section on Raindrops.

Q: Why would I want tips? 🌟

Because you're presumably on Farcaster to do something interesting, so why not receive donations that you can turn into $DEGEN tokens while you are at it?

Any Farcaster user can receive a tip, with some minor caveats. You will need to get the attention of somebody with a tip allowance by casting content which they want to tip. Everybody has their own ideas of what is tip-worthy, so start off by finding people who share your values and interests. See Receiving Tips for further discussion.

Farcaster users with a Degen Tip Allowance get to tip. See Tip Allowances for details.

✅ Good reasons:

• you want to actively support high quality content on Farcaster

• you're good at identifying high quality people and want to support their growth and development

• you're a natural social connector, bringing people, places, and things together in productive ways

❌ Bad reasons:

• you want a marketing budget to promote yourself

• you want to steal tips from the airdrops for yourself

• you want to trick people into tipping you

The process for calculating tip allowances is machine automated, and based on Farcaster activity (casts, reactions, etc.). @jacek is the principal developer.

The formula for calculating tip allowances is partially based on engagement with other users. The people running these giveaways are using you to increase their engagement score, and thereby increase their tip allowance. This allows them to run even bigger giveaways, and increase their engagement score even more. They do this over and over, day after day.

Not all giveaways are necessarily a problem, but the ones that are on a loop and don't involve creative input/output are most likely bad for the community. Following their instructions encourages them to do more of the same. See Roadmap for a discussion about why this is problematic and what is being done about it.

There's no guarantee the tipper even has an allowance to tip you with (fake tips!), or that they won't invalidate their tips later!

Fake tipping is basically the same thing as over-tipping, therefore you can use the same tools to check tip validity as for over-tipping (see above). Don't blindly trust tips people claim to give you, e.g. don't sell anything for tips unless you are willing to take the risk of not receiving the tips.

There is also a different form of fake tipping where people write something like 123 $DEGEN but it's not actually a Roman "D", or the space is actually a special non-breaking space character. Sometimes this is an accident, sometimes it is on purpose to fool you. To detect this you can use the Degen Tips frames in the Useful Links section.

Yes; in summary, based on the various details throughout this FAQ, tips won't count if the donor:

1. exceeds their tip allowance

2. deletes the tipping cast

3. does something to reduce their allowance retroactively (e.g. deletes a very popular cast that contributed significantly to their allowance)

4. removes all their verified wallets

5. no longer has 10K $DEGEN in their wallet

6. is disqualified

7. runs out of storage and their tipping cast is removed (highly unlikely)

Don't ever use tips as a means of value transfer with somebody you don't trust! That's what tokens are for!

No. Adjustments to the formulas and algorithms for both donations and receipts can be made up until the last minute of the season if necessary (e.g. disqualifying a bot farm from receiving tips).

There is only a single snapshot taken at the end of the season, and it looks back over all the data for the month. This is also why you shouldn't worry about technical issues mid-month, as the season snapshot is only taken when all issues are resolved and there is valid data for every day of the season, looking back.

There's no official support.

Community support: try mentioning @jacek on Farcaster, otherwise ask questions on /degen (the most popular $DEGEN channel) or /degentokenbase (the official channel).

Note you are not guaranteed an answer. Tag me or send me a DC if you're stumped.

Sure, it comes in light and dark flavor.

You must simply have at least 1 verified address on your Farcaster profile (see Airdrop 2 Leaderboard: line 95).

In the past there was a disqualified users check, and a profile display name check; these have both been disabled (lines 96 and 97).

At the end of each Airdrop season you will go to the Degen Tips website, and click the "Connect" button on the menu. After you've connected your wallet, visit the page for the Airdrop & Season you're participating in. Then click the Claim button to get your $DEGEN.

No exact date has been announced, but usually the season ends around the 28th of each month. Follow @jacek and enable notifications for his account to be alerted.

You're currently in Airdrop 2 Season 5. A season is currently 1 month in duration. I have an analysis of all the airdrops on Dune.

See the Tokenomics page for the official breakdown of supply distribution:

You have until the start of the next season, so typically about 4 weeks.

If you don't claim within the claims period then you will lose your points permanently.

Tips are what Farcaster users give you. Airdrop points are what the system calculates you have received in $DEGEN tokens.

There used to be a 50% points boost for tips received in certain channels. This was removed in Season 5.

You can see your overall points using the same frames in the Useful Links section, and on the Degen.tips website.

There are also bots like @degentipbot and @edit's that will sometimes tell you in near real-time whether a particular tip was valid. Unfortunately there are so many people tipping now that the bots can't reply to everybody.

There is also a query on Dune you can run that will indicate if a tip is valid, but it hasn't been updated for Season 5.

Forking and fixing this query is a great opportunity for a developer out there to start making a name for themselves! Tag me or DC me on Warpcast and I'll share your work.

It's possible there is a technical issue. You can try using the Data Status page in the Useful Links section to monitor data freshness, otherwise tag me or send me a Direct Cast on Farcaster and if I'm not busy I'll see if I can help. Don't worry, if the tips are legitimate, they will eventually accrue to you.

50% of tip allowances are distributed to the top ranked 171 people.

If you are looking for tips, it would be logical to study the Most Engaging Users list, figure out what behavior or content they like to tip, and then interact with those whose tipping preferences align with what you enjoy doing anyway. In other words: be yourself, but don't act in a vacuum.

Make sure you also read the section on Being Seen, because this has become a very complex topic that deserves a dedicated discussion. There are also more anti-social strategies for receiving tips, but I will not share them here.

1. You must have a verified wallet address on Farcaster (Airdrop 2 Tip Allocations Exponential Decay line 75). You can verify an address using your Farcaster client, e.g. on Warpcast go to Settings -> Verified Addresses. Make sure to complete all the steps: many people forget to do the final step!

2. You must hold at least 10K $DEGEN tokens in total across these verified Farcaster address(es) on Base Chain. This can be in any combination e.g. all 10K in a single address, 5K in 2 addresses, etc. (Airdrop 2 Most Engaging Farcaster FIDs line 36).

3. Your allowance will be significantly nerfed (reduced) if you haven't tipped at least 5 times in the preceding 7 days (Airdrop 2 Most Engaging Farcaster FIDs line 17). Effectively, you need to signal your intention to participate by taking explicit action and thereby opt-into the tip allowance system.

Only $DEGEN tokens, not tips/points counts towards the 10K minimum.

Only $DEGEN tokens on Base Chain count, not those held on the Degen Chain.

In previous seasons there were more stringent criteria e.g. minimum number of casts, avatar picture, non-disqualification, etc.

It's my understanding that query 3488807 calculates wallet balances and query 3471566 aggregates balances per FID. These are the queries used for Airdrop 2 Most Engaging Farcaster FIDs. That being said, this seems quite implementation specific and at risk of changing. It's probably wiser to keep everything in one address.

Your tip allowance for every day in the season will be verified at season snapshot time i.e. at the end of the season. If your aggregate $DEGEN balances on your verified wallets is below 10K at the time of the season snapshot, all your tips for the entire season will be invalidated (see Airdrop 2 Most Engaging Farcaster FIDs line 37, which does not consider daily balances, only the current balance).

During the season, if your balance falls below 10K then none of the allowance checking sites or frames or Dune queries will give you an allowance. Provided you restore your balance to 10K before the end of the season, you will nevertheless have a balance for the days due to the fact that the algorithm only cares about your final balance at snapshot time, not on individual days.

You will only make things needlessly complicated by running your balance below 10K $DEGEN.

It's complicated, but basically Degen Tips uses something called OpenRank to figure out what your reputation in the social network is and gives users with a higher reputation a bigger chunk of the daily global tipping allowance, which is currently 5 million DEGEN/day.

This is done because a tip allowance is seen as a privilege earned within the community and not a right that everybody automatically gets. See the Roadmap and Deep Dive sections at the end of the FAQ for more detail about why this is the case and what the exact mechanics look like.

Yes, the minimum allowance is 5. This allows you to opt-into the tipping program by performing the minimum tipping behavior (remember you must tip a minimum of 5x every 7 days or your rank will be significantly nerfed).

No, this is a misreading of a comment @jacek made: the "10K min" part was incorrectly interpreted as implying something happens when balances exceed 10K. There is nothing in the Dune code that looks at $DEGEN balances other than the 10K qualifying balance check.

Try the Eligibility Checker found in the Useful Links section. If you're still struggling, tag me or DC me and I'll help where I can.

It's most likely that your rank has fallen. Either other people are receiving more engagement than you from higher ranked users, or you're receiving less engagement, or both. You can check your rank using frames or on Dune; see Useful Links.

Make sure you've tipped at least 5 times in the preceding 7 days, otherwise your rank will fall dramatically!

There were also multiple changes up until around 4 June that would have affected your rank.

Most people aren't consistently popular every single day. For example, I get a ton of engagement when I release a Degen Tips FAQ update, but then my engagement drops off significantly. My OpenRank score will grow quickly on the day I publish an update, but then over the next few days more popular users will catch up and eliminate my gains just through natural growth.

There is also one other phenomenon to be aware of: 'sleeper' users who are not currently participating in tipping can wake up and do the minimum of 5 tips in a week to activate their allowance. For example, currently Vitalik Buterin is not participating in Degen Tips, but if he were to tip 5 tips in a week then he would end up with a very high rank due to his high reputation, and everybody underneath his new rank would drop down 1 rank.

Reply to the person you want to tip with a message containing text like this:

123 $DEGEN

1. This will donate 123 points of your allowance to the person you're replying to, if you have sufficient allowance. Your allowance will reduce by 123 points, and the recipient's points will increase by 123 points.

2. You can only donate whole amounts e.g. 420.69 $DEGEN will accomplish nothing.

3. Case doesn't matter e.g. $DEGEN, $degen, $deGeN are all equivalent.

4. The space is important: writing 123$DEGEN will tip nothing.

5. You can write anything you like before and after e.g. awesome! 123 $degen or 123 $degen this made me lol will work fine.

Think of these messages like IOUs. Nothing exchanges hands until the end of the month, when all the IOUs are collected and validated by @jacek in a season snapshot.

It is implemented using a case-insensitive regular expression (Airdrop 2 Leaderboard: line 16): ([0-9]+) \$DEGEN.

Note that this specific format has been exploited by some people who use non-breaking spaces, or non-Roman D/E/G/N letters to present what looks like a real tip but isn't picked up by the regex.

If you're building a tip-monitoring bot, consider detecting these fake tips to alert users specifically that they've been fake tipped. If you do go this route, be careful about making accusations: e.g. non-breaking spaces are often inserted accidentally by innocent users.

The tip will still stand (Airdrop 2 Leaderboard line 19).

In previous seasons, you could delete a tipping cast and the tip would be ignored. As of 26 May, tips will still stand even if deleted.

Tips are accepted wholly, never partially. For example, if your allowance is 100 and you tip 150, the system will reject your tip - it will not partially tip the 100 you can afford.

Tips will be accepted first-come-first-served, until a tip would exceed your allowance (Airdrop 2 Leaderboard line 54). Even if subsequent tips don't exceed your allowance, they will still count as over-tips. For example, consider:

1. You have an allowance of 100

2. You tip 90 - this will be accepted because your running total is now 90, which is <= 100

3. You tip 15 - this will be rejected because your running total is now 115, which exceeds 100

4. You tip 5 - this will also be rejected because your running total is now 120, which exceeds 100

This may not be intuitive - you may expect that the 15 will be skipped and the 5 accepted, but this is not the case (Airdrop 2 Leaderboard line 32-35 combined with 54).

Combined with the fact that you can no longer delete your tipping casts, an over-tipping mistake cannot be corrected e.g. if you have a 10 allowance and you tip 100 by accident then you will have no recourse and no tipping allowance until the next tipping day.

In previous seasons, there was an over-tipping safety margin that allowed you to get away with a small amount of over-tipping, due to data integration reliability issues experienced early on in the program. This safety margin has been removed, so do not exceed your allowance.

In previous seasons, users who repeatedly and significantly over-tipped were disqualified. Currently nobody is being disqualified in Season 5, but be aware of the risks of not regularly checking your allowance.

1. Don't panic. Degen Tips is experimental and frequently subject to technical issues.

2. Since the snapshot is only taken at the end of the month after any technical issues resolved, that means it will look back over the entire month with all missing data accounted for. In other words, you should always assume you have a tipping allowance if you previously had one regardless of whatever technical issues may be preventing you from viewing your allowance today. Remember if you don't use it on the day, you lose it.

3. Most people assume they have somewhere between 50-100% of their tipping allowance from the previous day and continue as per normal when there are technical issues.

Sometimes there are technical issues. Check if my account has shared any information, or @tag me so I can ask around. Go with the lower allowance amount until you know for sure - it's better to tip less than make a promise you can't keep.

There is also a problem with @paybot commands overlapping with Degen tipping commands. For example, if you try to send with @paybot 123 $DEGEN, you will simultaneously tip the same amount. Use the alternative send options or command format to avoid this.

It is lost, i.e. it won't carry over to the next day.

It will be topped up to the full amount all at once at 00:00 UTC, every day of the week. Allowances are always topped up fully at the same time each day, never partially. Most Degen Tips frames will show you the relative refresh time (e.g. "4 hours from now"); see Useful Links.

@jacek has previously indicated on AlfaFrens that the new refresh time is 01:05 UTC, however I can't see any indication of this in the Dune source code. Everything I see points to 00:00 UTC. Please tag / DC me if you confirm either 00:00 or 01:05 UTC!

Yes, storage is critical:

• If you run out of storage, your casts and reactions will be removed (oldest first). This means that the OpenRank algorithm will not be able to take engagements with you and engagements from you into account. This means you affect both your own reputation and that of others.

• If you cast frequently enough that your tipping casts from earlier in the season are removed, then those tips will not be processed and the people you tipped will lose the points.

Check your storage regularly to ensure you haven't run out:

The only way to improve your allowance is to improve your OpenRank (and make sure you tip at least 5 times each week). See the dedicated OpenRank section if you want to understand it better.

No, it doesn't work in that direction. Your rank will only increase if big accounts mention you.

They are probably trying to bait those big accounts into engaging with them, which will increase the reputation of the baiter and therefore their rank (credit: @wake). Don't engage with spammers, you will literally send the wrong signal to the system!

The standard advice is to start off by replying to other users in a constructive manner. People will see your value, and begin to tip and/or follow you.

If you're new to Farcaster, the worst mistake you can make is to dive in and start casting on your own profile: if you have no followers, nobody will see anything you write there!

The same thing you do in real-life when you join any new community: contribute meaningfully to existing conversations by replying, giving people an opportunity to see your potential value in the community. Once people see your value, they will start following you. Then you can start posting your own content, because there will actually be people who see it.

This advice will serve you well if you are an established Farcaster user with a solid number of followers (> 100). But if you're a newcomer, there's a catch to this strategy: Warpcast Priority Mode and Power Badges.

Some background:

1. Farcaster is a permission-less decentralized social network i.e. anybody can join if they pay the fee, and they can cast anything. This means there's a lot of spam on the network from scammers, bots, etc.

2. Warpcast is the software most people use to access Farcaster, and Warpcast has some rules about what casts they show to their users. They do this to protect users from scams, spam, etc. and to improve the overall experience on Farcaster.

3. Understanding the Warpcast rules is critical if you want participate productively on Farcaster as a newcomer (even if you don't use Warpcast yourself).

The biggest rule to understand about Warpcast is Priority Mode. Priority Mode is enabled on Warpcast by default, and it means that Warpcast users will only see:

1. Accounts they follow

2. Accounts with a Power Badge

3. Accounts that a cast author replies to or likes

Now, if you're a new user: (1) nobody follows you, (2) you won't have a power badge, and (3) cast authors won't reply or like anything you say because they won't see you unless they have Priority Mode disabled (rare). If this seems like a chicken & egg problem, you're correct.

Read the Priority Mode page extremely carefully, and then read it again, and then read it ten more times:

1. Priority Mode doesn't apply everywhere in Warpcast so you aren't completely invisible.

2. Not everybody and everywhere has Priority Mode enabled, so eventually people will stumble across you e.g. on the Trending tab of a channel.

3. There are recommendations for how to get started e.g. whomever introduced you to Farcaster can follow you and start liking/replying to you on their casts.

Aside from studying the above, there is also one other thing you can try: the /powermonday channel, which is monitored by people who have chosen to disable Priority Model and give random strangers a chance.

Warpcast has recently changed how they order casts show to their users. Study the following:

Farcaster

Varun Srinivasan on Warpcast

Warpcast now uses an ML model to order casts. If you have many unread casts, the model decides which ones go at the very top of your feed. It's main purpose is to learn your preferences and show you the most interesting stuff first. I'll go into some more details on how it works in the thread below.

Raindrops are a new feature introduced in Season 5 that can be used to promote one of your casts.

Raindrops involve the following steps:

1. Fueling Up: sending $DEGEN on Base to the raindrops wallet (a 2% fee applies)

2. Casting: post a cast with rain <amount> $degen anywhere in the text

3. Reply: other users reply to the raindrop cast

4. Rewards: author likes replies to distribute rewards evenly among them

5. Distribution: recipients of the raindrop receive rewards during regular airdrop claims

Check the official Degen Rain Casts list.

Did you factor the 2% fee into account?

No, Raindrops are completely independent from tips.

No, you can only use actual $DEGEN tokens you currently hold.

Correct.

Until the end of the season. But that doesn't mean the caster will continue liking replies.

There's a validity checker in the Useful Links section.

Not currently.

In previous seasons, disqualification was a thing. With the new algorithm, @jacek has indicated on AlfaFrens that he has lifted bans and is considering keeping them lifted as low ranking users will have no significant allowance to abuse anyway.

Source: Disqualified Farcaster Users comments

1. Manual/Auto moderation (e.g. engagement farming, trying to extract tip allowances back to yourself/friends, etc.)

2. Bots doing dumb bot things

3. Regular overspending

4. Triggering the spam rules: to protect the system, I will not elaborate on the rules, but basically just be a normal human who posts original casts and doesn't just quote/follow non-stop like a bot

Yes, see Disqualified Farcaster Users.

Yes, specifically some bot accounts: @degenbot, @degentip, @degentokenbase, and @paybot (Airdrop 2 Leaderboard line 20).

That's how it worked in the past -- if you get disqualified on the last day of the season, you are disqualified from receiving and donating tips for the entire season retroactively.

No, read Dan Romero's comment, but also read the section on Priority Mode, which some argue is effectively shadow banning:

Farcaster

Dan Romero on Warpcast

PSA — there is no more "shadow ban" on Warpcast 1. Everyone has Priority mode turned on by default 2. If you want someone to see your casts: a. Follow you b. They turn off priority mode c. You earn the power badge https://warpcast.notion.site/Priority-mode-7a9bccacc1474ccbba1e58dd2bec2dd3?pvs=25

The Degen Tips website explains that the purpose of Degen is to "reward others with $DEGEN for posting quality content" (emphasis is mine).

In my opinion, Degen Tips has succeeded if its design incentivizes an increase in average post quality, and it has failed if it instead incentivizes a decrease in average post quality.

Much of this section is based on my own interpretation of the various pieces of information I've collected. I strongly suggest you follow @jacek for first-hand information, and @wake for the best takes on everything going on in this space (and in general).

Season 4 tackled the problem of $DEGEN supply inflation. Supply inflation means that as each airdrop mints more $DEGEN, the value of each $DEGEN out there decreases, ceteris paribus (other things equal, i.e. assuming nothing else changes).

While it's true that demand for $DEGEN is also increasing, demand and supply increases must be kept in balance to prevent both inflation and deflation. In the previous seasons, airdrop supply was largely unconstrained.

To this end, the daily maximum allowance was capped to 5 million DEGEN/day in Season 4, which works out to 150 million DEGEN per typical month. This represented a roughly 80% decrease in airdrop size compared to the preceding month. This daily cap could presumably change up or down in the future, depending on what happens to demand.

As per @jacek, Degen Tips has been subject to a tragedy of the commons in two main forms, and the Season 5 changes are just the beginning of an attempt to address these issues:

1. Gaming

2. Sybil clusters

You may have seen something called a "tip giveaway flywheel", which looks like this:

1. A dude announces he'll give away most or all of his allowance to a random person who reacts to his post i.e. likes or recasts it. He promises extra "contest entries" to people who tip him.

2. People engage with his cast and tip him for extra entries, hoping to win the allowance.

3. The algorithm notices the engagement he's getting and increases his reputation.

4. Since reputation is used to determine tip allowance each day, the next day his allowance will be larger.

5. Next day he goes back to step (1), but with a larger allowance to give away, which attracts more people than before.

This flywheel continues day after day. He doesn't even have to really count entries - who can prove it either way. The winner will, of course, sing his praises and promote him to their followers and real-life friends, again growing his follower network.

Let's look at the macroeconomics of this behavior:

• He's taken tip allowances in the thousands of dollars from thousands of users and directed them to a single user.

• This single user does nothing all day but post low quality memes, which are probably sourced from fiverr for $5/day.

• Word spreads as giveaway winners tell their friends to join Farcaster for the mad loot.

• Newcomers begin to think Farcaster giveaways are a "job"; more advanced users start building bots to "compete" in giveaways.

• The network is flooded by an army of desperate people and bots producing low quality or zero value content while taking tips out of the hands of people who are actually productive.

• I've received evidence that some of people are non-technical and are paying others for "access" to Farcaster, and are being told they are "workers" who have to earn the payment back; this results in a highly charged negative atmosphere on the social network when the tipping rules move against them

Clearly this is not sustainable: the number of bots and low quality users will always be able to increase faster than the number of high quality users. This imposes a massive cost on running the network, and for normal people joining Farcaster the place looks like a complete dystopia of bots and "workers". If allowed to continue unchallenged:

1. The network can't scale to handle trillions of bots because it's designed to (ultimately) only handle 1 billion humans; this is an existential threat to Farcaster itself.

2. Before that happens, the high-quality humans will leave because they don't want to stick around watching trillions of bots and low-quality users foraging for tips

3. As the high-quality humans leave, average post quality will fall and therefore Degen tips will have failed its mission.

Based on the definitions above, no. It is entirely possible for a giveaway to result in a net increase in quality posts, or average post quality e.g. a giveaway that calls for some kind of original work of creativity. Quality content can also pertain to outside the social network e.g. performing charitable work such as planting a tree or helping the less fortunate.

My personal view: Let's be real - there's nothing wrong with the occasional frivolous giveaway. It's part of what makes things fun and exciting on Farcaster. We are humans not robots, we don't have to be 100% rational and consistent. Tip giveaways become a problem when they are happening repeatedly as part of a pattern of abuse designed to exploit the tipping system for personal gain at the expense of the broader community.

No. Tip giveaways come from the community airdrop pool, which is a shared resource that mints $DEGEN tokens every month. Raindrops come from the user's own existing $DEGEN holdings and have nothing to do with Degen Tips directly, other than being run as part of the same project.

Tips increase $DEGEN supply; Raindrops don't alter $DEGEN supply. Because Raindrops don't mint new supply, they don't have the same risks of abuse, and therefore the same arguments don't apply to Raindrops.

This is when people create fake accounts they run themselves, with the idea to tip these accounts and then ultimately receive the $DEGEN airdrop into their own account, i.e. taking more than their fair share. There can also be an overlap between Sybil clusters and tip giveaways, e.g. making the giveaway winner one of your fake accounts, or using your fake accounts to hype up the giveaway with "extra entry tips", etc.

Similar to tip giveaway flywheels, the capacity to create fake accounts is virtually unlimited. If allowed to continue unchallenged, the share of the $DEGEN pie incentivizing high-quality users will decrease and therefore it's likely average post quality will fall.

As per @jacek's comments on AlfaFrens, Degen Tips will be shifting away from "using engagement as a metric to leveraging the social graph". The social graph refers to the activity between Farcaster participants. Specifically, something called OpenRank will start with a small group of top tier users that are entrusted to embody the Degen Tips values. The algorithm will then follow the activity of those top tier users with other users on the network and distribute reputation downstream to them, and then do the same for those users' activity. This repeats until the global reputation changes stabilize.

By leveraging the social graph, the rules around how reputation is calculated have become much more difficult to manipulate via gaming and Sybil clusters. This is because creating engagement with bots is easy, but it won't mean anything if those bots don't have a high reputation in the system. See the OpenRank section for details.

These changes don't affect your ability to receive tips. They are a "quality gate" on who is trusted to distribute tips from the community pool. I strongly recommend you read the design considerations for the EigenTrust algorithm, which is what OpenRank (and therefore Degen Tips) uses to establish reputation (trustworthiness).

It's simply not feasible for everybody to have a tipping allowance - it has been tried in the past, and it will end up being abused and reduce the value of the token.

You should ask yourself why you believe you should have an allowance when few other people have on. Refer back to Section 1 "Why would I want a tip allowance" to verify your motives are in alignment with the project. There is no tipping allowance on Facebook, Instagram, X, etc. and people can build an audience there so why not on Farcaster?

@jacek has discussed two major changes publicly:

1. Late June (still season 5): tip airdrops & raindrops on the Degen L3 Chain; if this happens, then season 5 will presumably be claimed natively on the Degen L3 Chain.

2. In July (season 6): switch to Degen native rankings based on channel activity and tipping behavior; in other words, the definition of engagement will extend to include tips themselves. It's unclear which channels are being referenced, presumably it is /degentokenbase.

In alphabetical order by creator name.

1. First we define the following constants:

$$\begin{aligned} k &= 0.004 && \quad \text{Rate of decay} \\ P_{\text{total}} &= 5,000,000 && \quad \text{Daily DEGEN allowance cap} \\ P_{\text{min}} &= 5 && \quad \text{Minimum allowance} \\ \end{aligned}$$

2. Every day we pull in the OpenRank reputation value of all users, penalizing for inactive tippers. The reputation value for user i is defined as:

$$\text{reputation}_i = \begin{cases} \frac{\text{OpenRank reputation of user } i}{10000} & \text{if number of tips in the past 7 days} < 5 \\ \text{OpenRank reputation of user } i & \text{otherwise} \end{cases}$$

3. Users are then ordered from highest to lowest reputation:

$$\text{rank}_i = \text{Ordered list of } \text{reputation}_i$$

4. For each user on a specific day we take their OpenRank reputation and apply an exponential decay function:

$$P_{\text{initial},i} = e^{-k \cdot \text{rank}_i}$$

5. Sum of initial points across all qualifying users for each day:

$$S_{\text{initial},d} = \sum_{i} P_{\text{initial},i}$$

6. Scaling factor for each day is based on the target daily allowance:

$$\text{scale}_d = \frac{P_{\text{total}} - (P_{\text{min}} \cdot 100)}{S_{\text{initial},d}}$$

7. Final points distribution applies the scaling factor and the minimum allowance:

$$P_{\text{final},i,d} = \max\left(\left\lfloor P_{\text{initial},i} \cdot \text{scale}_d \right\rfloor, P_{\text{min}}\right)$$

8. Which is then the tip allowance for user i on day d:

$$\text{tip\_allowance}_{i,d} = P_{\text{final},i,d}$$

• Your OpenRank reputation is used to determine your initial points.

  • You won't be considered at all if you don't have a 10K $DEGEN balance

  • Your reputation value will be shrunk 10,000x down if you haven't tipped at least 5 times in the past 7 days.

  • Everybody's reputation value is put into a list, and then ordered from highest reputation to lowest

  • Your position in this list is your Degen Tips Rank, and so will likely not be the same as your OpenRank Rank

  • Your initial points are equal to an exponential decay function applies to your rank

• Everybody's points will be added together. If this amount exceeds 5 million, everybody's points will be scaled down to make them add up to 5 million. If the amount is less than 5 million, everybody's points will be scaled up to make them add up to 5 million.

• Final allowance has a minimum of 5 DEGEN/day constraint i.e. if you have 10K $DEGEN in your wallet, you will always have at least 5 DEGEN/day as an allowance.

The only thing you can control is whether you tipped at least 5 times in the past 7 days. You can also try to influence your OpenRank. See that section for details.

I created a Desmos simulation you can play with. The X-axis is the user rank, and the Y-axis is the initial points value.

I built a query to analyze user rank vs. total percentage of DEGEN allocated.

At the time of writing, 50% of the daily 5 million DEGEN is allocated by the time you get to rank 171, and 99% is allocated by the time you get to rank 1000.

In other words, the top 171 users decide where 50% of the daily tip allowance goes to, and the remaining 829 decide where the other 50% goes to.

OpenRank is a decentralized reputation protocol built by Karma3Labs. OpenRank replaces the use of median reactions that was used in season 1-4 for measuring engagement, which was the basis for tip allowance allocation in those seasons.

Engagement by itself can easily be gamed. OpenRank is based on the EigenTrust algorithm, which is robust in a mutually adverserial environment like Farcaster. See the Roadmap section for a full discussion of the problems that Degen Tips is attempting to address with this update.

You can read more in the original paper, but I'll summarize here:

1. Self-policing: the ethics of the user population are defined and enforced by peers themselves and not some central authority. In other words, @jacek doesn't unilaterally decide who is trustworthy, everybody collectively does. There is not 1 line of code where @jacek gives himself a boost in the Degen Tips algorithm, nor 1 line of code where his personal preference influences who is a top tier user.

2. The system should maintain anonymity and not require users to identify or de-anonymize themselves. For example, it shouldn't consider IP addresses or passports. Anonymous users should be welcome.

3. The system should not assign profit to newcomers. Reputation should be obtained by consistent good behavior through several transactions, and it should not be advantageous for malicious peers with poor reputations.

4. Should have minimal overhead so that anybody can run the algorithm and prove to themselves it is not rigged.

5. Should be robust to malicious collectives of peers who know one another and attempt to collectively subvert the system.

As you can see, these are all desirable properties for a reputation system in the Degen Tips environment.

There are a number of strategies that are implemented by OpenRank, and the users of OpenRank data must select a particular strategy. In the case of Degen Tips, the "engagement" strategy was selected (see Airdrop 2 Most Engaging Farcaster FIDs line 10).

The exact way the ranking strategy is implemented is complex, but you can read about it here. I will provide a brief summary:

1. The algorithm, EigenTrust, requires seeding the rankings. In the case of the "engagement" strategy, reputation is seeded using a curated list of profiles based on the Dune Farcaster Explorer dashboard.

2. Specifically, at most 100 profiles are pulled from that dashboard where they are in the "influencer" or "vip" tiers. Currently 73 profiles have been identified as "top tier", or seed-level users.

3. This list of users is stored as pre-trust values in the form (user, pre-trust value)

4. The algorithm is also provided with a list of local trust values. This is a list of (from user, to user, value) pairs, that expresses how much the from user trusts the to user. Specifically in the "engagement" strategy, this is based on Farcaster activity, where value is the sum of all the following scores:

Likes = 1, Replies = 6, Recasts = 3, Mentions = 12, Follows = 1

Remember this only works in one direction! You will not get reputation by liking, replying, recasting, etc. a big account! You only get reputation if a big account engages with you. So please don't spam.

5. The algorithm then takes these inputs, and starting from the pre-trust values, it starts to spread reputation from the pre-trust users to other users using the local-trust values. The local-trust values of those users in turn is applied, with the impact to the to user being constrained at each step by the reputation of the from user. Note that this can and will go around in a circle back to the top tier users. Eventually the reputations of everybody doesn't change much, though, and that's when the calculation stops.

6. The final reputation values of everybody are then expressed as percentages, i.e. the reputation of everybody in the system will add up to 1 at the end of the calculation. Large values represent a larger reputation and values can be compared for two users to determine who has a greater reputation.

The implementation is here.

Sure, it comes in light and dark flavor.