8 Degen Investments to Watch

Our analysts pick their favorite risky investment plays across memecoins, DeFi, and NFTs.
May 9, 20249 min read

On the hunt for massive returns on the frontier of crypto? You, too, may be afflicted with degenitis…

The battleground in which the common crypto degen operates is fraught with risks waiting to eviscerate their capital, but fear not, for it is also flush with opportunity; all it takes is a little knowledge for the shrewd degen to find the right play.

Today, we’re guiding you through our Top 8 Degen Crypto Opportunities, providing you with the basic information and an objective assessment on the hottest opportunities that have Crypto Twitter buzzing with excitement!

This analysis is for Citizens Only! 👇

🐰 friend.tech

Fully Diluted Valuation: $190M
Ticker: FRIEND
Sector: SocialFi

Website | Twitter

What is it?

friend.tech is an invite-only Web3 social dApp built on Base that pioneered a marketplace for "keys," which grant owners access to semi-private chat rooms that include the users behind the accounts they purchased keys for and other key holders. Transactions involving these keys incur a flat 10% fee, split equally between the account owner and the platform.

Recently, friend.tech launched V2, which introduced a native platform utility token (FRIEND), private onchain infrastructure to trade it, and a more community-centric version of their preexisting chat rooms called “clubs,” access to which can only be purchased using FRIEND.

Why it’s a degen play:

Holders of FRIEND can provide liquidity to the in-app friend.tech DEX to earn a pro rata share of the 1.5% fee taken on all FRIEND-ETH and club key swaps, in addition to 12M FRIEND in inflationary token rewards.

At the time of analysis, liquidity providers for FRIEND were generating an annualized return of over 500% APR off the $716k in income generated over the past 24 hours, the majority of which has been generated from speculative FRIEND swaps and inflationary token rewards instead of club key trading.

While the income being generated by LPs is no doubt substantial and could attract more buyers to purchase FRIEND, the data looks a little bleak: platform usage has fallen immensely off the highs from last year, users fire-sold their keys post-airdrop, and club activity is trending downwards.

As fantastic as a high triple-digit return can feel, the FRIEND token is liable to experience a sharp drop should whale influencers with massive bags forsake it. However, the presence of direct financial incentives aligning interests between friend.tech and its largest users could allow the platform to stage a resurgence!

🤖 Botto

Fully Diluted Valuation: $69M
Ticker: BOTTO
Sector: AI Agent

Website | Twitter

What is it?

Botto is a decentralized, autonomous artist that creates NFTs through the collective input of the Botto DAO. The Botto art engine is a combination of multiple models and has ingested millions of pieces of artwork. It creates 4k unique pieces of artwork and presents 350 pieces to the DAO for consideration each week.

At this stage, the artwork is still considered unfinished and is subject to community feedback, which the model implements and can be trained on.

The most popular fragment from each week is minted as a final piece of artwork on the Ethereum network and sold at auction, with the proceeds going towards the Botto DAO to pay for its management, its servers, and to reward the creative labor of the community.

Why it’s a degen play:

Buyers have consistently shelled out multiple ETH every week to purchase Botto’s artwork for two years, indicating the staying power of the Project; one sale that occurred two months ago saw Botto net $40k!

While broad swaths of the NFT sector seem to have fallen into a perpetual bear market, Botto is well positioned to capitalize on hype surrounding AI and derives novelty from the fact that its generative artwork is DAO-inspired. Additionally, as opposed to many AI x Crypto projects with limited fundamentals, Botto is a cash-flowing project that produces real income.

No investment is devoid of risks, however, and whether you are purchasing artwork from Botto or the BOTTO token itself, there is always the possibility that its shiny allure wears off and value diminishes.

⚡️ Zeus Network

Fully Diluted Valuation: $400M
Ticker: ZEUS
Sector: Solana/Bitcoin

Website | Twitter

What is it?

Zeus Network connects the Bitcoin and Solana ecosystems without traditional bridging mechanisms. Backed by notable industry figures like  Solana's co-founder, Anatoly Yakovenko, and Muneeb Ali, Stacks's co-founder — Zeus aims to import Bitcoin liquidity into Solana with a suite of products.

The first product, Apollo, is a Bitcoin liquidity bridge, offering yield opportunities through liquidity staking and using zBTC in Solana DeFi. Currently, Bitcoin only hosts a handful of DeFi protocols, even as Ordinals, Stamps, BRC-20s, and Runes extend its functionality with fungible and non-fungible tokens.

Moving forward, Zeus Network plans to launch a Bitcoin-backed stablecoin, develop cross-chain NFT tools, and establish decentralized lending and borrowing platforms. Apollo is gearing up for the Muses upgrade, the next testnet phase that integrates Bitcoin wallets, enhances security, and broadens ZEUS's use cases.

Why it’s a degen play:

The early stage of Zeus Network, supported by prominent backers and the market attention on Bitcoin and Solana, positions it as a promising degen play.

The potential of SVM to enhance Bitcoin — expanding utility and reducing friction in transaction fees and speed, particularly with the growing popularity of Ordinals and Runes — proves significant. Should Zeus achieve its goals, both networks would benefit significantly: Solana with a substantial capital infusion and Bitcoiners with new ways to leverage their dormant liquidity.

Despite its potential, Zeus’s native token, ZEUS, has only declined since its April launch. While the whole market did experience a downturn, Zeus has not shown strength as it recovered, potentially due to the nascency of its own ecosystem.

🃏 Fantasy Top

Fully Diluted Valuation: N/A
Ticker: FAN
Sector: SocialFi

Website | Twitter

What is it?

fantasy.top is the first onchain social trading card game that enables users to speculate on the value of their favorite influencers, enabling cardholders to compete and earn rewards based on influencers’ real-time Twitter performance!

Cards include information about their influencer’s Twitter performance and are assigned various rarity levels; the higher the influencer’s performance and the rarer the card, the more rewards you will receive.

Users can purchase packs of cards – priced as a function of demand – from fantasy.top to randomly generate cards or can opt to purchase them directly from existing cardholders on the marketplace.

Why it’s a degen play:

Fantasy top users can generate returns from minting rare cards from top influencers utilizing packs or trading cards on the market place based on which influencers they believe will have the best future performance.

Cards themselves are not solely for price speculation, and can be used in combination with skill (or bot farms) to assemble teams of high performing influencers, which can be entered into ranked tournaments to compete for ETH, Blast Gold, FAN points (which will likely position recipients for a future airdrop), and Stars (which can be used to participate in lotteries).

Influencers are directly incentivized to promote the success of fantasy.top, earning half of the 3% fee taken on all individual card sales by.top and sharing 10% of the revenue generated from card park sales.

Alignment between a project and its influencers results in their public support and can cause users to FOMO in, resulting in short-term pops in activity. As demonstrated with friend.tech, however, it can be difficult to sustain this momentum over the longer term if payouts wane.

🔷 Grayscale Ethereum Trust

Fully Diluted Valuation: $6.7B
Ticker: ETHE
Sector: ETF

Website | Twitter

What is it?

The Grayscale Ethereum Trust (ETHE) is a publicly traded investment vehicle offering exposure to Ether. Since shares of the Trust are publicly traded, investors can purchase ETHE through traditional stock brokerage accounts, eliminating the need to purchase the asset through unfamiliar crypto exchanges and the complexities of self-custody.

Due to regulatory restrictions from the Trust’s close-ended nature, shares of ETHE can only be created by accredited investors and are subject to a 6-month lockup before they can become tradable. Additionally, investors cannot currently redeem their shares for the underlying Ether.

While the price of ETHE typically mirrors fluctuations in the price of ETH, the Trust has failed to meet its investment objective of tracking the ETH market price, as shares have traded at substantial premiums and discounts to net asset value (NAV) throughout the product’s existence because of the restrictions on creates and redeems.

Why it’s a degen play:

The Grayscale Bitcoin Trust (GBTC) previously faced difficulties tracking NAV, however, its conversion into a spot ETF this January enabled unrestricted creates and redeems, eliminating the discount that had plagued holders and allowing the market price of GBTC to closely reflect NAV ever since!

The first final decision deadline for the United States Securities and Exchange Commission (SEC) to approve or reject an active spot ETH ETF application is May 23 – two weeks from now – and the agency’s decision on this application will be binding for all others.

Currently, ETHE is trading at a 25% discount to NAV, falling significantly throughout March as the odds of approval tumbled on news that the SEC had yet to meaningfully engage with issuers. Sentiment has positioned overwhelmingly for denial on the news, with Polymarket odds suggesting there is only a 7% chance of ETH ETF approval by the key May 23 deadline.

Should spot ETH ETFs receive surprise approval, a move potentially indicated by the SEC’s approval of Ether commodity future ETFs last October, ETHE purchasers will enjoy gains from price increases in ETH and the elimination of ETHE’s discount! Unfortunately, buyers should be prepared to withstand an even steeper discount in the denial scenario, considering that ETHE traded with a nearly 60% discount at multiple points last year.

😺 Catcoins

Fully Diluted Valuation: $450M, $103M
Sector: Memecoins
Website | Twitter
MICHI: Website | Twitter

What is it?

While memecoins have traditionally been dominated by canines such as DOGE, SHIB, BONK, and WIF, catcoins like POPCAT and MICHI have emerged as strong competitors this cycle. Despite cats' deep-rooted presence in internet culture, the market has long lacked heavyweight cat-themed tokens.

POPCAT, the leading cat coin, originated from a 2020 meme and its related clicking game. During the recent market downturn, POPCAT surged >100% at its peak this past month, outperforming Bitcoin’s 20% drop. MICHI, the younger of the two, showed similar strength — appreciating 5x at its peak over the last 30 days despite Bitcoin’s decline. Consequently, POPCAT and MICHI form a 'feline barbell,' comparable to the canine duo of DOGE and WIF. 

Why it’s a degen play:

With today’s meme-driven markets, both POPCAT and MICHI could hold potential if memecoin tastes evolve. 

Amid downturns, popular memecoins have shown some of, if not the most, strength of any token class, potentially due to their social nature, letting people meme when they can’t participate in DeFi or other more capital-dependent activities.

🦾 Morpheus Network

Fully Diluted Valuation: $3B  
Ticker: MOR
Sector: AI

Website | Twitter

What is it?

Morpheus is developing a low-cost, decentralized network of personal smart agents to make AI tech accessible to all without central oversight.

Central to Morpheus’s strategy is its "AgentStore," a marketplace for developers to create and deploy AI agents for tasks from financial transactions to daily chores. This variety meets diverse user needs, boosting the platform’s accessibility and utility.

Its token launched this week on Arbitrum, available for claims and swaps on platforms like Uniswap. Despite numerous AI coin launches, Morpheus stands out with its functional offerings, but using Morpheus has a steep learning curve, which could dissuade people from participating in or approaching the network. In crypto, simple always wins.

Further, it does have a large FDV since the majority of its token have been reserved for network rewards, lining up the potential for heavy dilution.

Why it’s a degen play:

Despite its complexity, Morpheus stands out as an intriguing degen play. Besides being an operational, decentralized AI, Morpheus built a strong community and executed a launch without token pre-mining or private sales skewing the distribution.

Morpheus offers a merit-based reward system for developers, compensating them based on their AI agents’ popularity and usage, which stimulates quality creation and long-term growth. Rewards are paid in MOR, the network's native token. MOR serves as a medium of exchange and grants holders access to the network’s computational resources, reducing ongoing costs and enhancing operational efficiency. For example, if I hold 1% of total MOR, I can use 1% of the network’s compute.

Overall, Morpheus Network offers a thoughtful approach to decentralized AI, with a vibrant community and economy — all secured by a valuable, fairly distributed token.

🌎 Country Coins

Total Market Cap: $102M
Ticker: Varies
Sector: Memecoins  

What is it?

Country Coins are aiming to be the next flavor of memecoin fever.

NationFi, as it's being called, has a total market cap of about ~$100M — tiny compared to larger memecoins like WIF or POPCAT. As previously said, meme coin trends change rapidly — today it’s NationFi, tomorrow it’s something else.

The vast majority of the coins are less that a few weeks old with the top dog among them, America Coin, currently supporting an $80M market cap.

Why it’s a degen play:

Aiming to position themselves as unofficial social tokens for the countries they represent, there are plenty of play to be made with the backdrop of global affairs. 

These are memecoins, so forget fundamentals, but as tokens named after US political candidates start losing and gaining based on the actions of the real-life candidates, there might be a geopolitical play.

The streets of crypto are littered with small market cap tokens that seemed poised for greatness, but hey, small cap memecoins are often the ultimate degen play.

Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.

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