The Base Ecosystem and Coinbase: Your Ultimate Guide to the Ethereum Layer-2

Date:

  • About the Base Ecosystem: The Vibe
  • About Base Ecosystem: The Numbers
  • About Base: The Tech
  • How to Use Base
  • Most Popular Base Projects
  • Final Thoughts: From Coinbase to Base

The Base ecosystem, incubated within Coinbase, is a Layer-2 solution designed to make the Ethereum blockchain more scalable, reduce transaction costs, and improve dApp user experiences. 

Despite ties to a centralized exchange, the project aims for progressive decentralization, which is critical for an open cryptoeconomy. Built on the OP Stack, Base ensures security, stability, and scalability for on-chain apps.

Launched in August 2023, Base has become one of the fastest-growing Layer-2 networks with nearly $2 billion in total value locked. 

Note: Base currently has no plans to introduce a new token; it uses ETH as its gas token. Be wary of potential scams offering fake Base tokens.

The following Base guide explores the ecosystem’s growth metrics & potential, leading projects, and a step-by-step guide to use it. 

About the Base Ecosystem: The Vibe

Base significantly benefits from its integration with Coinbase’s large user base, which has helped usher in rapid user adoption and project integration. 

Coinbase is the largest centralized crypto exchange in North America with nearly 100 million users. The integration with Base has enabled seamless fiat onramps and access to a large user base. 

Base operates as a decentralized network, and Coinbase does not intervene in its daily operations. While Coinbase supports the ecosystem, Base maintains its decentralized nature by operating independently, utilizing the OP Stack for scalability and security.

The benefits of the Base blockchain for developers are numerous. Beyond financial investments, the Base ecosystem fund frequently offers developer grants and organizes hackathons. So far, it has invested in projects like: 

  • Avanti, an oracle-based synthetic derivatives protocol, that allows users to trade crypto and real-world assets with up to 100x leverage and earn yield as a market-maker by providing USDC liquidity.
  • BSX, a decentralized limit order book, that combines the best of CeFi and DeFi trading experiences, offering features like cross-collateralization, powerful cross-margining, and self-custody.
  • Onboard, a project that provides an onchain, self-custodial path for users to onramp and offramp crypto in a peer-to-peer manner through their own MPC wallet and smart contracts, focusing on developing markets.
  • OpenCover, the first Layer 2 insurance aggregator that works with underwriters to protect DeFi users against onchain risks such as smart contract hacks and oracle failures.
  • Paragraph, an onchain creator platform that helps creators publish, share, and monetize their content using permissionless protocols, enabling novel onchain mechanisms like turning posts into collectibles.
  • Truflation, an onchain financial oracle providing automated, independent daily inflation reporting by compiling data from millions of points and sources, offering a higher fidelity picture of inflation.

Base’s Coinbase link gets its foot in the door with potential partnerships with institutional investors, enterprises, and developer communities. These partnerships could lead to larger-scale projects and collaborations that drive substantial value for the ecosystem. 

About Base Ecosystem: The Numbers

Base saw its first notable spurt of activity and TVL in September 2023, but its most significant in Q2 2024. 

Base’s blockchain total value locked in 2024 is nearly $2 billion as of writing. 

Base saw its daily transactions jump from 500,000 in March 2024 to over 3 million in April 2024.

Around the same time, Base broke the $1 billion in total value bridged and currently has about $2.1 trillion of total value bridged, with ETH taking the lion’s share. 

By April 2024, Base had over 400,000 sign-ups and a cumulative trading volume surpassing $1 billion, driven by a memecoin frenzy.

Base Explorer is the recommended chain explorer. 

Source: https://dune.com/tk-research/base

About Base: The Tech

Base, like other “optimistic rollups,” assumes transactions are valid initially, reducing computational overhead. Suspicious transactions undergo fraud-proof verification, maintaining low costs.

Definition: optimistic rollup (noun)– Transactions are initially assumed to be valid, hence “optimistic,” and are later validated on-chain. A fraud-proof mechanism is triggered to verify its validity if any transaction is suspected to be fraudulent. This allows for significant scalability and efficiency improvements while leveraging the underlying blockchain’s security. Several other blockchain projects also utilize optimistic rollups for scaling, including the pioneering Optimism, Arbitrum, and Boba Network. 

Base is designed to seamlessly integrate with Ethereum L1, Coinbase, and other chains. Base offers cost-effective EVM features, developer-friendly APIs, and smart contract wallets. As the second core dev team on the OP Stack, Base collaborates with OP Labs to build a robust, interoperable web3 ecosystem.

The Base RPC Endpoint is here: https://mainnet.base.org.

Network information can be found here: https://docs.base.org/docs/network-information 

Base is a decentralized Ethereum scaling solution, helping boost transaction speed and reduce costs. 

Unlike traditional Layer-1 blockchains (like Ethereum), which handle transactions individually, Base consolidates them into batches, processing them more efficiently and economically before recording them on Ethereum. 

How to Use Base

Using Base, or any Layer-2, requires jumping through a few hoops. Basically, you’re going to move funds from the Ethereum base layer onto Layer-2. 

Step 1 Choose your Wallet: Use MetaMask or Coinbase Wallet.

Step 2: Change/Add Network (top left corner)

You’ll probably see Base pop up, but just make sure it matches the below criteria: 

RPC Endpoint: https://mainnet.base.org`

Chain ID: 8453

Currency Symbol:  ETH

Step 3 Bridge ETH: Bridge ETH from Ethereum or other EVM chains to Base once connected. 

Definition: Bridge (noun, verb) – transferring assets, like ETH, from one blockchain network to another. This involves moving your cryptocurrency from its original network (e.g., Ethereum) to a new network (e.g., Base) so you can use it within the new ecosystem. The bridge ensures that the value of your assets remains intact while allowing them to be utilized on different blockchain networks.

💩Note: While the gas fees are significantly lower on Base, you still have to pay ETH’s Layer-1 fees to bridge funds. 

Block Explorer: Https://basescan.org

For more details, visit https://www.base.org.

Most Popular Base Projects

DeFi

The most active (based on unique active wallets) dApps in the Base ecosystem are decentralized exchanges like Uniswap V3, Uniswap V2, 1inch Network, SushiSwap V3,  and Compound.

Aerodrome, a next-generation AMM designed to serve as Base’s central liquidity hub, is a stand-out infrastructure in the Base ecosystem. 

Memecoins

Memecoins such as TOSHI, TYBG, NORMIE, and BRETT drive significant trading volumes and transactional activity on Base.

As of writing, the $BRETT memecoin is having its moment in the sun. 

Other Base Ecosystem dApps 

Dmail Network is a social messaging platform offering email and marketing services; Dmail Network is designed to facilitate secure and efficient communication within the decentralized ecosystem.

Parallel is a popular trading card game that integrates social elements.

Frens On Chain is a unique digital pet project featuring dynamic NFTs.

Final Thoughts: From Coinbase to Base

The Base ecosystem, while backed by Coinbase, is designed to be a cornerstone for the decentralized future of blockchain technology. 

Coinbase is already credited with advancing and advocating cryptocurrency adoption to a mainstream audience, and its contributions have undoubtedly helped shape the United States policy toward cryptocurrency.

Base, a decentralized Layer-2, is an exciting move from the organization and one of its first forays with direct entrepreneurship and incubation in the Ethereum ecosystem. It also launched the USDC stablecoin, an ERC-20, through CENTRE, a Coinbase-founded organization, and in collaboration with Circle. 

Much of the Base hype revolves around memecoins– similar to how Solana’s ecosystem received a significant pump in activity and TVL in Q1 2024. However, given its growth within the Coinbase ecosystem and beyond, the project’s potential shouldn’t be overlooked.

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