My degus are in a 55 gallon aquarium and a cage I built that is the size of an 80gallon tank. They have wooden platforms and hide outs within the cage. I am in the process of building a second and third story which will be constructed to fit on top of the lid with a little hole which they can jump in and out of. It will have more platforms (they like heights) and another nest/hideout box. Should be fun to watch them in it!

The cage should be so that they can get plenty of air circulation through it.

WARNING:

Degus suffer from high temperatures. Don't put the cage to direct sun, even not behind the window and don't take them to the car when there's too hot (at least for not too long). On the other side they are quite ok with lower temperatures. But draft also isn't good for them, they can catch cold which can lead to pneumonia and this is hardly possible to cure with degus.

They like to climb, so you can put some platforms and branches in there for them to climb and gnaw on. You can use branches from a pear tree, maple tree, ash-tree, beech or oak. DO NOT USE YEW, CEDAR, LAUREL, CHESNUT, or RHODENDRIAN for they are poisonous to them.

For bedding I use pine shavings or carefresh NOT cedar. Cedar is not only poisonous to them, cedar shavings contain oils and odors that small rodents lungs can not handle it and they can die from it. I also put alfalfa hay in there for them to nibble on, toliet paper rolls (they love to chew them up!) and just some nesting fluff so they can play with it.

TOYS

Like I said before, I give them toliet paper rolls to play with, rocks (they like to move them around), and platforms so they can jump on. Balls work sometimes, but they love wheels. Also, little wooden houses are good too. They like to sleep in them or hide their goodies.

Also, they like dust baths too. That is how they bathe themselves, like chinchillas. I give mine twice a week. Just put a dish big enough they can get into and some dust (you can buy from a pet store).