A ciliated protozoa undergoes programmed genome rearrangements during nuclear development, forming a transcriptionally active somatic macronucleus from a copy of its germline micronucleus. In O. trifallax, this nuclear transition involves an RNA-mediated excision of 90% of the germline genome, after which, the remaining 225,000 DNA fragments are amplified and reorganized into gene-sized nanochromosomes via RNA templates. Early analysis of the sequenced O. trifallax genomes revealed instances of alternative fragmentation of longer chromosomes into shorter ones, and alternative processing of a single loci of conserved micronuclear material to form a variety of macronuclear genes. In this study we observe that the micronuclear genome of O. trifallax contains an abundance of paralogous macronuclear segments -- at varying levels of degeneration -- that contribute to the genetic variation of the micronuclear genome, promote the evolution of new macronuclear genes, and provide the means for a gene to become scrambled in the germline genome.