Base: The New Layer 2 Blockchain That’s Changing the Game

Base, a layer 2 blockchain protocol made by Coinbase, has caught the attention of crypto players. One of the reasons is due to Friend.tech, a dApps built on the Base network. Despite being a newcomer, Base has demonstrated its competitive prowess against other layer 2 networks. Find out more about what Base is and its ecosystem through the following article.

Article Summary

• ⚡ Base is a layer-2 blockchain protocol developed by Coinbase. It offers low transaction fees with the same level of security and decentralization as Ethereum.
• 🚧 Development teams can make Base an option to create dApps easily because it uses a modular OP Stack.
• 💸 Since its launch on August 9, 2023, Base has attracted significant funds and users, even outperforming some of its competitors like Starknet and Immutable X in the L2 ecosystem.
• 📱 Friend.tech is the latest dApps application on Base to catch the attention of crypto players. Various new and existing protocols are starting to make their protocol available on the Base network ecosystem.
• 📈 Thanks to Friend.tech, the daily transaction count on Base surpassed 1.37 million transactions. That number even exceeded Ethereum transactions on the same day.

What is Base?

Base is a Coinbase-built Ethereum layer-2 (L2) blockchain that allows development teams to create a secure, low-cost, and developer-friendly dapps onchain. The project is built using Optimism’s OP Stack and launched with marked on-chain activities on August 9, 2023.

Before further discussing the Base, you can read the explanation of layer 2 and OP Stack through Pintu Academy's article.

As L2, Base inherits Ethereum’s level of security and decentralization while having better performance and scalability. At the time of writing, Base’s total value locked (TVL) stands at US$248 million, outperforming the TVL of Starknet and Immutable X.

Coinbase said that Base aims to make blockchain interactions more seamless and accessible to all developers. In addition, Base is expected to be the gateway for retail crypto investors to access broader crypto ecosystems like Web3 more easily.

So far, Base has received a positive response from both the development team and users. The data above shows that since the bridge was officially launched on August 9, Base has recorded an inflow of 95,000 ETH. The inflow of funds correlates with the number of Base users, which shows an upward trend.

If you look at the data, the increase in Base users is driven by two main reasons: trading microcap tokens and Friend.tech. A more detailed explanation on the latter will be discussed in the next section. However, even though Base is still in its early stages, the data shows that Base can gain users amid intense competition in the L2 ecosystem.

How Does Base Works?

Base is built using Optimism’s OP Stack and uses Optimistic roll-up technology for transaction processing. The Base mainnet functions separately from the Optimism network. However, by using OP Stack, which has a high level of interoperability, the Base network will be able to connect with other L2 networks..

The adoption of Optimism’s OP Stack is set to streamline the development of Base, positioning it as a launchpad for second-layer (L2) decentralized applications (dApps). This strategic alignment not only ensures enhanced developmental convenience for the Base team but also extends accessibility to Coinbase users—many of whom are not well-versed in decentralized finance .

Coinbase will be the sole operator of Base, allowing them to charge fees. Thus, Base could be a potential new revenue stream for Coinbase. So far, Base has announced that they will not launch native tokens and prefer to utilize ETH.

Furthermore, Base also supports account abstraction. In other words, it allows externally owned accounts (EOAs) or users to execute transactions through smart contracts without performing manual interactions such as storing private keys, determining gas fees, and signing transactions.

In a strategic partnership, Base has joined forces with Gelato and Safe to bolster account abstraction. This collaboration introduces Base’s mainnet account abstraction Software Development Kit (SDK), equipping Web3 development teams with the tools to seamlessly integrate account abstraction into their applications.

You can learn more about what account abstraction is here and the role of account abstraction in navigating Web3 adoption here.

Main Features of Base

Some of the features that Base offers are as follows:

• 🌉 Bridging Tokens. Base enables bridging tokens from various blockchains, creating a seamless experience for users who want to interact with multiple networks.
• ⚙️ Developing dApss. As the second L2 to launch on the OP Stack, Base enables development teams to create dApps without the limitations of existing blockchain networks. Its modular nature allows developers to modify the protocol as needed.
• 🔎 Exploring dApps. Like any other blockchain, Base has many dApps its users can use. They range from the gaming sector, artwork, Web3 wallet, DEX, and more.
• 💸 Facilitating cross-border transactions. By aiming to reduce transaction costs and time, Base could be a game-changer for cross-border payments, making international trade more accessible and seamless.

The Advantage of Base

The following are some of the advantages offered by Base:

• 🔐 Ethereum-level security. As L2, Base inherits Ethereum’s security aspects. Despite Ethereum’s security level, Base has low and fast transaction fees.
• ↔️ Coinbase support. Creating dApps on Base is easier by accessing products, tools, and users on Coinbase. This can be an incentive for the development team.
• 🤝 Developer friendly. Since Base uses a modular OP Stack, the development team can swap out various components as needed. Base also uses a simple API that is easy for anyone to use.
• ⭐ EVM Compatible. Base is compatible with the Ethereum Virtual Machine (EVM) and offers lower fees. Base also features account abstraction, allowing users to use their accounts without having to perform complex manual interactions.

Application on Base Ecosystem

As a relatively new protocol, Base has a complete ecosystem. Various large Ethereum applications have added the Base network. OpenSea, UniSwap, GMX, Stargate, and Synthetix are some of the DApps already operating on Base.

Besides the big protocol names, Base also has some new protocols that have managed to catch the attention of crypto players.

1. Friend.tech

One of the protocols built on the Base network that has been the talk of the crypto space recently is Friend.tech. It is a social finance (SocFi) dApps that allows users to connect, share, and manage exclusive chat rooms. The FriendTech concept is new and unique. Twitter users can tokenize their accounts into “keys” and sell them on Friend.tech.

In other words, users can “invest” in their friends’ presence on social media and get rewarded when their friends become more popular. There is also a feature to create private chat rooms for users with keys to the account that made the room. Users can also use keys to share access to exclusive content, and are traded like stocks.

Crypto players welcomed friend.tech’s emergence. This is reflected in the daily income of US$ 840,000 on August 21, 2023. This figure passes market leader protocols such as Lido, Uniswap, and even Bitcoin. On the same day, the number of transactions also reached 525,000, referring to data from @cryptokoryo on Dune. However, the Friend.tech hype did not last long. Slowly, it began to be abandoned by its users. As of August 29, 2023, its total daily revenue was only US$ 85,000, with only 36,100 transactions.

Despite the decline in Friend.tech’s performance, at least this shows that the protocol built on Base can attract the interest and attention of crypto players. If a protocol has qualities and innovations, it is not impossible to continue to grow and become the choice of investors.

2. Alienbase

Alienbase is a Decentralized Exchange (DEX) platform built on the Base network. Based on DeFi Llama data, Alienbase currently has a Total Value Locked (TVL) of US$ 28.91 million. This figure is the highest among other protocols in Base.

Alienbase’s main feature is token swaps with low fees. In addition, users can enjoy various other features such as liquidity mining, yield farming, and staking. Currently, only 4 tokens and 9 crypto pairs are available on Alienbase. Given that this protocol is still relatively new, in the future, there will be more tokens and features available on Alienbase.

Alienbase is also preparing a feature called “Area 51,” a special place for users who want to experiment with very high-risk tokens (meme tokens). This feature was created due to the concern that many meme tokens were made to be scams. Later, Area 51 will be a safer place for experiments because it will ensure that the meme tokens listed are not for rug pull or wash trading.

Find out more about DEX and how to avoid token memes rug pull through Pintu Academy’s article.

The Future of Base

One of the big question marks and criticisms surrounding Base is the involvement Coinbase has in it. Moreover, the only sequencer on the Base network is Coinbase, which means that Coinbase does the entire transaction validation process. Contrary to the blockchain philosophy, this creates the impression that Base is not decentralized.

In response to this skepticism, Base emphasized that its network carries Optimism’s “Law of Chains” as a standard so that a network can become part of Superchain. In addition, Base also has its mechanism to maintain neutrality through the “Base Neutrality Principles.”

Base has also prepared a roadmap for the future decentralization of its network. The first step taken is to delegate the decision-making role from the core team of Base developers to a ‘security council.’ Later, as the Base ecosystem evolves, it will have a much more democratic governance.

In addition, in collaboration with OP Labs and Optimism Collective, Base will do the following:

• Launch at least one fault prover for the OP Stack that will secure both Base and Optimism Mainnet by leveraging a set of validators to identify and challenge faults.
• Decentralize upgradeability of the Base and Optimism Mainnet smart contracts, first to a security council with a decentralized quorum controlled by no single entity.
• Launch an initial version of the Superchain that can sequence transactions for Base, Optimism Mainnet, and any OP Stack rollup, protecting the right for anyone to participate in these ecosystems
• In 2024, progressing Base and Optimism Mainnet to Stage 2 rollups, with levels of decentralization and security comparable to Ethereum. We have an ambitious roadmap, but believe our embodiment of the web3 ethos of collaboration will get us there

In a short time, Base showed its potential to compete with other L2 networks. The presence of unique protocols and specific targeting of retail investors makes Base more valuable than other competitors.

However, BASE still has a lot of work to do to ensure the growth of user and transaction sustainability. Besides users, Base must also be able to guarantee the development team’s needs for innovative and convenient services.

Buy Crypto Assets on Pintu

Looking to invest in crypto assets? No worries, you can safely and conveniently purchase a wide range of cryptocurrencies such as BTC, ETH, SOL, and others safely and easily on Pintu. Pintu diligently evaluates all its crypto assets, highlighting the significance of being cautious.

Pintu is also compatible with popular wallets such as Metamask to facilitate your transactions. Download Pintu app on Play Store and App Store! Your security is guaranteed because Pintu is regulated and supervised by Bappebti and Kominfo.

Aside from buying and trading crypto assets, you can expand your knowledge about cryptocurrencies through various Pintu Academy articles. Updated weekly, all Pintu Academy articles are made for knowledge and educational purposes, not as financial advice

Reference

• About Base, Base Docs, accessed on 29 August 2023.
• Decentralizing Base with the OP Stack and Optimism, Base Docs, accessed on 29 August 2023.
• James Morales, 5 Things to Know About Base, the New Layer 2 Chain From Coinbase, Bein Crypto, accessed on 29 August 2023.
• Tom Blackstone, Base network has officially launched: Here’s how it can be used, Coin Telegraph, accessed on 29 August 2023.
• Ally Zach, Base: Establishing a Legitimate Layer-2 Presence, Messari, accessed on 30 August 2023.
• Defioasis, What is ‘Friend Tech’? The Impact of Paradigm’s Endorsement & the Rise of Decentralized Social Networks, WuBlock, accessed on 30 August 2023.
• Roadmap, Alienbase Docs, accessed on 30 August 2023.