What Is Base? All You Need to Know About the Coinbase Layer 2 Chain
TL;DR
- Base is a secure, low-cost, developer-friendly Ethereum Layer 2 solution.
- The Coinbase L2 aims to boost scalability on Ethereum, cut transaction costs, and improve user and developer experiences across dApps.
- Compared to other Ethereum L2 networks, Base’s unique proposition lies in its deep integration with Coinbase products, its emphasis on being a bridge rather than an island, and its dedication to open-source development and decentralization.
- Base currently operates without a native token and has no plans to issue a new network token. It accepts Base ETH for transaction fees and other network operations.
What Is the Base Blockchain?
Blockchain technology is constantly redefining how we handle everything digitally from financial transactions to securing data and powering decentralized applications (dApps). But with this rapid growth comes a pressing challenge: how do we keep these systems scalable and efficient as demand skyrockets?
Enter Base, the Layer 2 (L2) solution developed by Coinbase. At its core, Base Chain is an Ethereum L2 blockchain designed to enhance scalability and usability for dApps while leveraging the security of the Ethereum network. It’s built on the MIT-licensed OP Stack in collaboration with Optimism, allowing developers to create and deploy their projects efficiently without needing a new network token.
In this article, we’ll break down what Base is, how it works, its key features, benefits, practical use cases, challenges, and where it’s heading in today’s fast-evolving web3 landscape.
How Base Works
At its core, Base is a Layer 2 solution specifically designed to enhance Ethereum’s capabilities by improving transaction speed, reducing costs, and boosting scalability — while preserving Ethereum’s trusted security and decentralization.
Built on top of Ethereum’s Layer 1 blockchain, Base takes on the heavy lifting of processing transactions off-chain, significantly reducing congestion on Ethereum’s mainnet — allowing developers to build more efficient, scalable dApps.
Let’s dive into its key features and the technology that powers the Base Blockchain.
Transaction Processing
Base Chain uses an off-chain processing model to reduce transaction costs and congestion on Ethereum’s mainnet. Instead of every transaction fighting for space on Ethereum, Base collects them, rolls them up, and sends them as a batch for Ethereum to verify. This reduces congestion and lowers fees, making the network faster and more efficient.
OP Stack
Base runs on the OP Stack, a modular framework that uses Optimistic Rollups to streamline operations further.
In this system, transactions are assumed to be valid right away. Instead of waiting for immediate verification, they get processed in the rollup. But there’s a safety net — a challenge window allowing validators to step in and contest any suspicious transactions.
Since the OP stack is entirely open source, developers have the freedom to propose enhancements, fix bugs, and introduce new features. The more eyes on the code, the quicker vulnerabilities can be identified and resolved, ensuring that Base remains a trusted, secure platform for developers and users alike.
EVM Compatibility
A standout feature of the Base network is its seamless interoperability with Ethereum, which is the dominant environment for smart contract development. dApps built on Base can easily interact with Ethereum-based projects, such as decentralized finance (DeFi) protocols, NFT platforms, and DAOs. Developers can leverage Ethereum’s security, infrastructure, and user base while scaling their dApps with lower fees and faster transactions on Base.
Additionally, Base supports familiar tools like Solidity, Truffle, and Web3.js, making it easier for developers to transition to the network without needing to learn new frameworks or tools.
Cross-Chain Interoperability
dApps on Base aren’t limited to Ethereum users, making onboarding a larger and more diverse audience easier.
Base supports cross-chain transactions, facilitated through integrations with protocols like Axelar, Crossmint, Chainlink CCIP, Wormhole, and LayerZero. This interoperability enables applications built on Base to communicate with over 49 other blockchains, like Avalanche, Polygon, or Binance Smart Chain. By facilitating cross-chain interactions, Base allows dApps to accept tokens from multiple blockchains — increasing liquidity and the flow of assets across ecosystems.
Benefits of Base Chain
What truly sets Base apart is its dual focus on accessibility and performance. Knowing that developers thrive best when they have seamless tools at their disposal, Base integrates easily with existing Coinbase products. This integration also allows developers to tap into a user base exceeding 110 million verified accounts, helping to drive the initial adoption of dApps on Base.
Below are other key advantages that Base Layer 2 offers over traditional Layer 1 network and other Layer 2 scaling solutions:
Enhanced Scalability & Speed
We’ve all been there — waiting for transactions to go through on Ethereum during peak times, watching fees climb, and feeling the frustration build. In contrast, Base can maintain a consistent user experience with rapid transaction speeds, making it more attractive for dApps that require quick processing and real-time interactions, such as trading platforms, gaming applications, or live auctions.
Rather than being limited to Ethereum’s typical processing capability of around 15 transactions per second (TPS), Base can handle up to 4,000 TPS.
Performance & Gas Fees
By utilizing optimistic rollups, Base Layer 2 minimizes the number of transactions that need to be processed on Ethereum’s mainnet, leading to lower gas fees for users. While Ethereum gas fees can range from 60 to 100 Gwei or more during high congestion, transactions on Base can cost a fraction of that — up to 90% less.
If a standard transaction on Ethereum typically costs around $10, under Base’s framework, the cost could shrink to just $1 or even less.
Users can execute trades quickly and at minimal cost, giving the platform a competitive edge over those still operating solely on Ethereum. Lower fees and faster transactions also mean higher trading volumes and happier users — making Base a game-changer for apps that thrive on high activity.
Robust Security Features
Operating as a Layer-2 solution on Ethereum, the Base Blockchain benefits from Ethereum’s Proof-of-Stake consensus mechanism, which protects the network from attacks and ensures that transactions are secure and immutable.
The network’s use of optimistic rollups further strengthens its security. Through a built-in challenge period, validators can dispute any suspicious transactions. If a transaction is flagged, it can be rolled back, ensuring that only legitimate transactions make it to the Ethereum mainnet.
Immutability is another crucial feature of Base. Once transactions are recorded, they cannot be altered or tampered with. This permanence is essential for building trust, particularly for financial transactions or sensitive data. Base has also consistently emphasized its commitment to increasing decentralization over time. This transition will help mitigate risks associated with centralization, such as single points of failure.
Use Cases & Top Projects on the Base Blockchain
Base has garnered significant attention in the world of web3 through strategic partnerships with influential players like Aave, Uniswap, Chainlink, Compound, Stargate, Rubic Best Rate Finder App, Crossmint, and more. These collaborations enhance Base’s functionality while injecting a sense of credibility and reliability into the entire Layer 2 ecosystem.
For instance, partnering with Aave allows users to access DeFi functionalities directly on Base, enabling lending and borrowing at lower transaction costs. Similarly, by integrating with Uniswap, users can trade their assets seamlessly without navigating complex processes that other platforms often present. Chainlink’s involvement ensures that data remains trustworthy and secure, bolstering the overall utility of smart contracts within the Base ecosystem.
Now, let’s look at some popular use cases being developed on the Base network from various web3 fields.
DeFi
Base Chain is already home to a variety of DeFi protocols and applications, from lending and borrowing platforms to decentralized exchanges (DEXs), aggregator services, and yield farming. Staking and liquidity protocols also thrive on Base, providing users with a smooth, cost-effective experience that scales with demand.
A notable example of Base’s growing DeFi ecosystem is Aerodrome Finance, which serves as the central trading and liquidity marketplace on Base. At the time of writing, Aerodrome has become the largest project by total value locked (TVL) on Base, with more than double the TVL of all other DEXs combined. To date, Aerodrome has facilitated over $31 billion in cumulative trading volume. Leading in both concentrated liquidity and total volume, Aerodrome reached an all-time high (ATH) on August 12, capturing over 60% of Base’s overall trading volume, further solidifying its position as the top DEX on the network.
Seamless Protocol stands as the first native DeFi lending platform on Base. Powered by its governance token, SEAM, Seamless operates similarly to well-known platforms like Aave and Compound. While its TVL has dropped over 70% since a peak in December 2023, the protocol continues to see an increase in active users. Another popular DeFi lending app on Base is Moonwell, with a total TVL of around $76 million, $56 million of which is on Base, with the rest spread across Moonbeam and Optimism.
Non-Fungible Tokens (NFTs)
NFT marketplaces and tokenization thrive from Base Chain’s scalability and low fees. This makes it easier for artists, creators, and collectors to trade and tokenize assets without the usual high costs. Base has already integrated with popular platforms like OpenSea and Zora, where users can list and trade NFTs minted directly on the Base network.
Decentralized Social Platforms
Base Chain is an ideal platform for web3 social media due to its performance, scaling capabilities, and large user base coming from Coinbase. The network currently supports social dApps like Blackbird, CyberConnect, Drakula, and Dmail.
These platforms leverage Base’s decentralized structure to give users greater control over their content, data, and interactions — while also offering resistance to censorship. Additionally, Base has consistently prioritized community engagement, positioning itself as a blockchain network for the people.
Web3 Gaming
Through Base’s scalability, fee structure, and transaction throughput, developers can create immersive gaming experiences and in-game economies. Gaming companies building on Base include traditional RPGs, MMORPGs, NFT-based games, strategy games, and more.
Leveraging the Base network, Echelon Prime (PRIME) is a blockchain-focused organization supporting a decentralized gaming ecosystem. The project emphasizes community engagement and the PRIME token’s versatility in usage within its gaming ecosystem, facilitating token-gated products, services, and gaming experiences known as PRIME Sinks.
At the core of Echelon Prime’s vision is to enhance gaming experiences by leveraging blockchain features, with Parallel TCG being its flagship project and a glimpse into its broader ambitions for Web3 gaming. In December 2023, Parallel TCG’s marketplace, Sanctuary, launched on Base. $PRIME touched an ATH of $27.89 on March 21 and currently has a market cap of over $290 million.
Memecoins
Base has quickly become a hotspot for memecoins in 2024, thanks to its vibrant and engaged community through social media. Memecoins like Base God (TYBG), Boomer, and Mochi have gained serious traction, backed by the enthusiasm and energy of the network’s growing community.
How to Bridge and Swap with Base on Rubic
Rubic simplifies the bridging process by aggregating over 200 DEXs for on-chain and cross-chain swaps across multiple blockchain networks. With a focus on integrating emerging chains — often missing from larger DEXs — Rubic ensures users have access to the most in-demand networks, including Base.
By aggregating top-tier bridges like Multichain, Wormhole, Stargate, Celer Network, and LayerZero, Rubic ensures fast, secure transfers between Base and other blockchains while delivering the best rates and minimal fees for users across multiple networks.
When swapping assets on Base, Rubic pulls liquidity from major DEXs like 1inch, Uniswap, TraderJoe, PancakeSwap, SushiSwap, and Aerodrome to ensure users get the most competitive rates. This multi-DEX approach guarantees better liquidity and lower slippage, allowing users to maximize their trades.
For cross-chain swaps — like moving ETH from Base to ETH on Arbitrum — Rubic offers options through providers such as Router, XY, Stargate, Squid Router, Rango, LiFi, Orbiter, Meson, and Owlto. These providers allow users to efficiently bridge their assets, offering different routes to optimize transaction costs and speed.
For on-chain swaps on Base — such as swapping ETH to USDC — Rubic aggregates providers including XY, NativeRouter, Odos, deBridge, Aerodrome, Izumi, BaseSwap, 1inch, and Open Ocean. This diverse set of on-chain providers ensures that users can choose the swap route that best fits their needs regarding cost-effectiveness and liquidity.
When swapping assets on Base, keep a few things in mind for the best experience: Gas fees can vary greatly depending on network activity, so always double-check before confirming a transaction to avoid high costs.
Timing matters too — off-peak hours like late nights or weekends often lead to lower fees and faster swaps. Also, different providers offer unique advantages in cost, speed, or liquidity, so take advantage of Rubic’s aggregated provider options to choose the route that aligns with your priorities.
Here’s how to bridge and swap with Rubic on Base:
- Open Rubic Best Rate Finder App.
- Connect Your Wallet: Ensure your cryptocurrency wallet is connected to the Rubic interface. Ensure that your wallet is switched to the Base network. You can use any crypto wallet compatible with the Base chain, such as MetaMask, Coinbase Wallet, or Rainbow Wallet.
- Select Source Network: Choose the blockchain from which you want to bridge assets (this could be any supported network).
- Choose Cryptocurrency: Select the specific token you wish to bridge.
- Set Target Chain: Choose “Base” as the target chain for the assets you want to receive.
- Enter Amount: Specify the amount of cryptocurrency you wish to swap. Rubic will automatically search for the best rates available for your transaction.
- Review Details: Double-check all transaction details before confirming.
- Complete the Swap: Once confirmed, your cross-chain swap will be executed, and you will receive the assets on the Base network. From there, you can manage your investments according to your strategy.
Swap now to explore Rubic’s crypto exchange and bridge aggregator to experience more flexibility and liquidity options for cross-chain activity.
Current Progress on the Base Blockchain & Future Plans
Daily Active Users of Top L2 Blockchains
Source: Token Terminal
While Base has only been around since 2023, the network has emerged as a leading blockchain scaling solution, overcoming more popular L2s like Arbitrum and OP. And despite the growing competition among L2s, Base has stood out by offering developer-friendly tools and leveraging Coinbase’s massive user base to attract users and projects alike. Base has also generated impressive fees and revenue, showcasing its growing adoption and utility.
Source: Base Insider
The network has been steadily gaining traction in DeFi, with its TVL increasing from $438 million at the beginning of 2024 to over $1.4 billion in August 2024. Daily transactions on Base L2 also soared from under 500k in March 2024 to over 3 million by April, maintaining a consistent level of over 1 million daily transactions since then. In September, Base hit its peak, recording an impressive 4.45 million transactions in a single day.
Base Daily Transactions
Source: DefiLlama
Source: Coin98 Analytics
Data from Token Terminal (as shown in the below graph) shows that the number of daily active users on Base peaked on September 2 at 1.2 million amid the network’s “Onchain Summer” campaign on August 20. This massive surge in activity on Base is also due to the growing popularity of memecoins, which has fueled trading on DEXs. Another key factor has been Ethereum’s Dencun upgrade, which enables L2 solutions like Base to store data more efficiently, slashing transaction fees by up to 90%.
Daily Active Users on Base
Source: Token Terminal
Since the launch of Basenames on August 21, the network has notched a record number of daily active addresses, showing a 60% growth since the start of August. Base creator, Jesse Pollak, noted that over 200,000 new Base.eth usernames had been minted in the first week of the new decentralized domain naming service being live.
Powered by the Ethereum Name Service (ENS) platform, Basenames allow network users to purchase human-readable names (rather than alphanumeric gibberish) tied to their Base wallet address, allowing more accessible communication between users on the network. In comparison, it took nearly two years for ENS to reach 200,000 registered addresses. ENS’s main competitor, Unstoppable Domains, has recently announced that it’s expanding onto Base Chain, which further demonstrates the network’s strong growth and ecosystem adoption.
Scaling Base
Base’s mission has evolved to build a global onchain economy structured around four core pillars:
- Decentralization and Scalability: Prioritizing fast, affordable transactions on a secure, decentralized L2 solution. Goals include advancing decentralization while ensuring high network availability (targeting 99.99%).
- Developer Platform: Aiming to empower over 1 million builders to create impactful onchain products. This involves enhancing the developer experience and tools available on Base.
- Ecosystem of Apps: Targeting over 1 billion users by nurturing a vibrant onchain ecosystem through various dApps built on Base.
- Capital Market Development: Establishing Base as an important player in the onchain economy by fostering a deep capital market and ensuring seamless connections with L1s and other Ethereum L2s.
In a recent announcement, the network showcased its progress and plans to increase data availability capacity with the integration of PeerDAS in the upcoming Pectra upgrade. Here’s a closer look at what’s going on:
- Accessibility: Base is committed to making on-chain transactions accessible and affordable, prioritizing fast, low-cost transactions on its secure Layer-2 (L2) platform.
- Scaling Throughput: Since launch, Base has increased throughput by 4x, raising the gas target per block from 2.5 Mgas/s to 10 Mgas/s. The goal? To hit 1 Ggas/s, with gas targets increasing by 1 Mgas/s every week starting in late September 2024.
- EIP-4844 Impact: Thanks to Ethereum’s EIP-4844 upgrade, L2 gas fees have dropped significantly by decoupling from Ethereum Mainnet fees, allowing Base and other L2s to scale more effectively during congestion.
- PeerDAS Integration: The Pectra upgrade will introduce Peer Data Availability Sampling (PeerDAS), which allows nodes to access data without having to download every blob, cutting down on bandwidth requirements and boosting data availability.
- Collaboration with Ethereum: Base has been actively working alongside Ethereum developers to ensure L1 data availability keeps up with the growing demands of L2 networks like Base.
- Market-Based Pricing: To maintain low fees for L2 transactions while ensuring L1 nodes are fairly compensated, there’s a focus on creating a healthy market for blob space.
Future Roadmap
Looking ahead, Base has more plans to refine its platform with innovations in data compression, including stateful compression and aggregatable signatures, which are set to improve data handling efficiency and further enhance the network’s performance.
The Coinbase L2 network is focused on keeping its growth on track while staying transparent and adaptable using the following approaches:
- Structured Gas Target Increases: Base is committing to steady, predictable increases in gas targets, allowing developers to plan their projects with confidence. No sudden changes, just a clear path forward.
- Transparency and Monitoring: Every step of the scaling process will be closely monitored, with updates and adjustments communicated clearly to the community. Nothing behind closed doors.
- Prioritizing Data Availability: The integration of PeerDAS and potential expansions in blob capacity are all about future-proofing Base for the growing demand. More users, more data, but no slowdowns.
- Simplifying Onboarding & Onchain Development: Base is committed to supporting developers through grants and educational initiatives. With improvements in data availability and transaction efficiency, they’re also laying the groundwork for sustainable, large-scale growth.
- Interoperability in the Superchain: Working with Optimism to simplify interactions across L2 solutions to improve user and developer experiences.
Base BlockchainChallengesOpportunitiesBase faces fierce competition from other Layer-2 solutions, including Arbitrum, Optimism (OP), and rapidly growing networks like Blast and Linea. This competitive landscape requires Base to innovate and differentiate itself continuouslyBase can capitalize on Coinbase’s extensive user base and developer support, which can accelerate its growth and adoption in the market.Base Chain witnessed a 145% surge in scam activity in April 2024. Base appears to be a target for scammers, with two of the top 10 largest single thefts occurring on the network, accounting for over 20% of the month’s total theft.With Ethereum’s Dencun Upgrade now live, limitations around fees and data storage are no more. This has boosted the efficiency of L2s like Base, making it more appealing to users and developers.Ongoing regulatory uncertainty in the United States may hinder the adoption of blockchain solutions as businesses and users seek clarity on compliance and legal frameworks.By prioritizing user experience, Base can attract mainstream users, particularly those who are less familiar with cryptocurrency, by offering user-friendly platforms and solutions.
Conclusion
Base is set to reshape blockchain interactions in a big way. Over the coming months, we can expect significant advancements as Coinbase has dedicated substantial resources to enhancing the Base chain to meet current demands and lead the way in L2 innovations.
One of the key strengths of Base is its ability to significantly reduce gas fees while maintaining full EVM compatibility, allowing developers to create robust dApps without adapting to new standards. It also integrates seamlessly with Coinbase services, making it easier for users to transition between platforms.
Currently, Base uses ETH as its native gas token with no plans to introduce a native token. Caution is advised against potential scammers who might offer or distribute fake Base tokens. However, if Base does eventually launch a token, being active in the ecosystem could boost the chances of receiving a potential airdrop.
While some worry that Coinbase’s involvement could challenge decentralization, Base is designed to evolve toward a community-driven governance model. By adopting a decentralized autonomous organizations (DAO) structure, Base aims to give developers and users a real say in its future. Additionally, incentives for contributors who provide valuable input can be explored to encourage continued engagement.
However, the balance between scaling the network and maintaining decentralized control is tricky, and projects like Base walk a fine line. If too much power stays in the hands of a few, it might undermine the very ethos of blockchain technology: decentralization and user autonomy. It’s worth keeping an eye on how governance evolves as these projects scale. Will it truly hand over control to the community or remain tethered to corporate interests? Only time will tell.
FAQs about Base
- Does Base have a native token?
Base Blockchain doesn’t have its own token. Instead, it uses Ethereum’s currency, Ether (ETH), to handle transaction fees and network operations. You’ll find other tokens within the Base ecosystem, like USD Base Coin (USDbC), which is a bridged version of USDC. These tokens help power transactions and activities within the Base network.
- Who developed the Base blockchain?
Base was created by Coinbase, one of the leading centralized cryptocurrency exchanges (CEX). The goal behind Base is to develop a scalable, secure, and efficient Layer 2 blockchain that operates on top of Ethereum’s mainnet, enhancing the network’s performance while keeping it accessible for users and developers alike.
- What are the primary uses of Base?
Base is a scalable, developer-friendly Ethereum Layer 2 solution designed to support a broad spectrum of decentralized applications, financial services, NFTs, and tools. With a focus on low transaction fees, seamless interoperability, and ecosystem expansion, Base aims to help onboard the next billion users to blockchain technology.
- How to buy, sell, and trade on the Base network?
To trade on the Base chain, you’ll need Base ETH (Ether bridged to the Base network). You can acquire Base ETH from cryptocurrency exchanges like Binance, OKX, or KuCoin. After purchasing, bridge your ETH to Base through the network’s supported bridge options, and you’re ready to start trading or interacting with decentralized applications on Base. Alternatively, you can swap your ETH for USDbC and bridge on Base using Rubic’s exchange and bridge aggregator.
- How does Rubic enhance the usability of Base for cross-chain transactions?
Rubic provides a user-friendly DEX platform that simplifies token swapping across multiple blockchains, offering the best rates through the aggregation of DEXs and smart routing while prioritizing security and decentralization.
