The growth in popularity of Base, which is connected to one of the first and biggest exchanges Coinbase, can be observed through its enormous increase of monthly active addresses.
With over a million monthly active addresses now recorded, a parabolic growth of this new layer highlights an expanding user base and perhaps an increased adoption of a new Base for DeFi. Let’s take a look at how Base could offer some value to crypto and the onramp for new crypto users.
Base is an Ethereum Layer 2 blockchain developed by one of the oldest exchanges of crypto, Coinbase. It was launched on August 9, 2023 and uses the OP Stack technology from Optimism to process transactions off the main Ethereum chain that settle periodically on Ethereum.
The goal of Base, as with all L2’s, is to reduce the congestion on the Ethereum mainnet, and lower the fees and increase transaction speeds.
Base maintains full compatibility with Ethereum tools and protocols and runs the Ethereum Virtual Machine – EVM. What’s special is the close ties and integration of centralized exchange Coinbase, that offers their own infrastructure and broad user base.
Coinbase’s introduction of Base aligns with its strategy to expand the blockchain user and developer base, with a goal to bring “the next billion users and next million builders on chain,” according to Jesse Pollak, head of protocols at Coinbase.
As briefly mentioned before, Base is using Optimism’s OP Stack to power itself and as an open-source public good it could serve as the basis for a “superchain” of L2s, as they describe themselves. We can potentially think of a positive impact on the price of Optimism if Base is considered to be one of the most secure and scalable EVM L2s available.
This review of Base was created for informational purposes. This article is not intended for promotion.
Base supports a variety of applications, including top DeFi/NFT projects, and has integrated with major NFT marketplaces, decentralized exchanges, lending platforms, and liquidity pools, where its low fees and high transaction throughput can handle a huge amount of activity efficiently.
According to some, Base is essentially a fed chain, which means the decentralized nature is not that decentralized because of its close ties to the highly regulated CoinBase.
It’s an uncomfortable truth for many, especially since Base is an L2 solution. Financially, fed chains tend to be bullish, but they go against the cypherpunk values that cryptocurrency was built upon, though this is of non importance in this day and age.
Despite its centralization, Base can be considered the best fed chain available. It serves as a sandbox for developers to start building their apps, allowing them to grow their projects until they are ready to migrate to their own independent rollup solution. In a way, this provides a stepping stone for projects to eventually embrace greater decentralization as they mature.
cbBTC, or Coinbase Wrapped BTC, is an ERC20 token that is backed 1:1 by Bitcoin (BTC) held in custody by Coinbase.
To understand cbBTC, we need to understand ‘wrapped tokens’. In short, token wrapping is a mechanism where a cryptocurrency, like Bitcoin, is locked in a smart contract, and a corresponding token, in this case cbBTC, is issued on another blockchain.
Coinbase users in select geographic regions can move their BTC on and off-chain using the send and receive features on Coinbase. When users send BTC from their Coinbase account to an address on Base or Ethereum, it automatically converts to cbBTC at a 1:1 ratio. Learn more about cbBTC here.
Base, developed by Coinbase as an Ethereum Layer 2 network, takes a distinct approach to tokenomics by opting not to issue its own network token. Instead, it uses Ether (ETH) for transaction fees, aiming to simplify the user experience and reduce scam risks.
Details on the supply and distribution of any related tokens have not been fully disclosed, but any future tokens would be managed to support liquidity and benefit developers and early adopters, so it seems.
Base’s total value locked (TVL) stands at $3.084 billion, which is lower compared to other chains ranked above it. The platform’s bridged TVL is $15.088 billion, and stablecoins on the network amount to $4.002 billion.
Base currently has 445 protocols built on top of it and boasts 1.74 million active addresses.
Base operates as a layer two on top of Ethereum, which means it uses ETH to pay for transaction fees. Before you can use the network, you need to buy some ETH and send it to your wallet address (on Base).
After setting up your wallet on the Base mainnet, copy your wallet address from MetaMask or your chosen wallet, then purchase ETH from a centralized exchange.
To send ETH over the Base Network, you’ll need a compatible exchange such as Bybit that supports the Base network. You should:
Remember, the process might vary slightly depending on the exchange you use, but the key point is to ensure that you select the Base network as the destination for your ETH. To learn more about using the Base blockchain and start trading.
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Coinbase has a great track record of doing good by the crypto community. However, Base isn’t the best place to promote the “bankless” narrative due to its centralized nature. Unfortunately, many cypherpunk values have already been lost in the pursuit of financial gains. As a result, the crypto space has largely become a giant permissionless casino, with fewer people caring about the original principles that drove the creation of cryptocurrencies.
But that doesn’t mean Base is something to look over. If you want to stay within the comfort of one of the biggest centralized exchanges and look for the same protocols as on the Ethereum mainnet for fewer transaction fees and faster speeds, Base is what you need…
Base is an open, global onchain economy that is proudly founded in America by the same people of one of the oldest and biggest centralized crypto exchanges: Coinbase. Built on Ethereum, and decentralized to be accessible to everyone. An effort for a new internet, by the people, for the people is tried to be created with Base.
Disclaimer: Trading and investing in cryptocurrencies (also called digital or virtual currencies, altcoins) involves a substantial risk of loss and is not suitable for every investor. You are solely responsible for the risk and financial resources you use to trade crypto. The content on this website is primarily for informational purposes and does not constitute financial advice.
