BASE

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7 Feb 2024

Base is a Layer 2 project that aims to include users in the chain by running Dapps on Ethereum with an improved user interface, using the OP infrastructure of Optimism by Coinbase .

Base's testnet went live in February 2023, and it made the mainnet available to the general public on August 9.

Base's Highlights:

Secured by Ethereum: Base is built with the security and scalability you need to power your decentralized applications.

Powered by Coinbase: Basemakes it easy to build decentralized applications that provide access to Coinbase products, users, and tools.

Big features, small fees: Base offers full EVM compatibility at a fraction of the cost and is committed to pushing the developer platform forward.

Open source: Base aims to be open to anyone with the vision of buildinga standard, modular, aggregator-agnostic Superchain that is decentralized, permissionless, and powered by Optimism .

BASE ECOSYSTEM

The Different Side of Base

1. Centrally Coinbase

First of all, it is the intersection between Coinbase and Base as it is the first aggregation created by a CEX . To put this in perspective, while Coinbase has a fairly large user base of over 100 million , the total number of Defi users is under 5 million; This,

It means that if 10% of Base's users enter the chain, the number of users in Base will double.

Another important advantage comes from Coinbase's prominent position as one of the leading Centralized Exchanges ( CEX ) in the market with a market capitalization of over 17 billion. This significant capital provides Coinbase with the financial resources to support Base's R&D efforts.

2. Built Using OP Stack

Base is the first major project to use Optimism's OP Stack in its infrastructure.

OP Stack is essentially a framework for building aggregations, it is open source and offers modularity where developers can use its modules to create L2 chains customized to fit their use cases .

By building with OP Stack, it lays a foundation for future flexibility and upgradeability, allowing components to be swapped out and added like a lego system.

As Coinbase and Optimism are leading forces in their respective fields, the synergy derived from both is likely to pave the way for a new generation of Dapps and users.

3. It Doesn't Have a Native Token

Base stated that there are no plans to issue tokens in the road map, which is quite different from conventional practices. Instead, it will use ETH as gas and part of the transaction fee will be transferred to the OP Collective to further develop the OP Stack .

Increase in TVL

1. The Rise and Fall of BALD

BALD is a memecoin launched on Base on July 29th, whose market cap went from 0 million to 50 million in a single day and had a staggering 400,000% price increase in 48 hours . This exponential growth has led to huge profits for some investors; According to one report, a modest $500 investment makes $1 million. Just like other memecoins, it has no core use case or intrinsic value; The hype around BALD is mostly due to getting the right mix at the right time, such as the coin's logo and naming being associated with the ecosystem when there are very few other coins. Subsequently, BALD's value dropped by 90% after the dealer suddenly withdrew millions of dollars of liquidity on July 30.

Memecoins are a dead investment. They can be reset at any time. The healthiest way is to stay away and not invest.

2. Onchain Summer

Onchain Summer is a multi-week campaign that brings together 50+ collaborators like Coca Cola, Opensea , Atari, Zora, etc. with daily NFT drops and incentives , encouraging users to participate in Defi events on Base.

3. Partnerships

Uniswap , Layer Zero , Axelar etc. Integrated with 100+ dapp Base including.

One of the important integrations is the integration with Chainlink . Chainlink is one of the leading oracle networks; By implementing price feeds into Base, Defi Protocols looking to build on Base will have access to industry standard data feeds, simplifying the integration process.

Base Ecosystem Fund and Grants

Base has its own Ecosystem Fund, financially backed by Coinbase , and they invest to advance early pre-seed and seed projects built on Base, focusing primarily on four areas:

price coins
On-chain reputation
On-Chain Limit Order Book (LOB)
Safer Defi

Alongside its own ecosystem fund, Base has also partnered with Prop House to distribute a grant of over 100 ETH .

The Path to Decentralization

Coming from a background of a centralized entity, Base has challenges in becoming a decentralized network; one of them is that L2 technology is still developing and improving. The development of aggregation often has a centralized control phase, which means having

" training wheels ". While it is inevitable to initially have centralized control assistance to fix bugs and update the system, the goal is to eventually remove these training wheels and allow aggregation to be fully controlled by smart contracts.
According to the framework for assessing collection maturity, there are 3 stages based on the confidence of training wheels :

Stage 0 – Full training wheels
Stage 1 - Limited training wheels
Stage 2 — No training wheels

According to L2beat , Arbitrum is categorized as a Stage 1 roundup, while Optimism , zkSync Era , Linea , and Base are all in the Stage 0 category. Currently , Coinbase is the sole exchanger of the Base network; This means that it is the only person who can verify and execute transactions and charge transaction fees. However, other sorters are expected to join the network at a later stage. Base is built around a " Neutrality Framework " , which encompasses several things, including consistent state transitions, maintaining the liveness of the network's security uptime, and approving upgrades through the governance process . Additionally , Base will also fund public goods like Optimism Collective, which is on-chain where you can see a portion of transaction fees going to the coffers . Base also developed Pessimism , a toolset that allows anyone to monitor any OP Stack, which is useful for optimistic rollups because they assume transactions are valid unless proven otherwise .

What is the Connection Between Base and Coinbase?

Base is seen as an important step in bringing Coinbase 's products, users and assets into the decentralized crypto economy. To do this in a decentralized way, they are developing Ethereum on the open-source, MIT- licensed OP Stack , in partnership with Optimism .

Does Coinbase have future plans for a native token on Base?

There are currently no plans to issue a new network token. ETH is used as the gas fee.

Where can Base be used?

It is used as open source according to the same values as Ethereum. This means the documents will be publicly available.

Conclusion...

With Base's unwavering mission to connect the next million and billions of builders and users on-chain, Base and other L2 aggregations have the potential to reshape the Defi landscape in the near future, driving the growth and mass adoption of Dapps .

To summarize...

Base is a promising Layer-2 blockchain project that has the potential to increase the scalability and efficiency of the Ethereum network.

2024 will be a year where layer 2 projects will be discussed. zk-Rollups have emerged as a powerful solution to address the scalability and high fees that plague blockchain networks.

My thoughts...

Layer 2 ; Led by Base , Scroll , zkSync , Linea , Polygon zkEVM and StarkNet , developers and projects have a variety of options to choose from based on their specific needs.