Coins: 14,909
Exchanges: 1,158
Market Cap: $2.57T 0.5%
24h Vol: $62.706B
Gas: 3 GWEI
Go Ad-free
Coins & Tokens
TABLE OF CONTENTS

What Is BASE? Understanding Coinbase's Layer 2

4.5
| by
CJ
-

What is Base?

Base is a Layer 2 built on Ethereum that utilizes Optimism's OP Stack, offering users high security, scalability, and interoperability.


Key Takeaways

  • Base is a decentralized Layer 2 solution built on Ethereum and offers high security, scalability, and interoperability, for fast transactions.

  • Developed by Coinbase in collaboration with Optimism, Base has recently launched its mainnet with $160 million in TVL.

  • Decentralized applications building on Base will be able to access Coinbase’s existing suite of products and tools and its user base of approximately 110 million verified users, holding over $80 billion worth of assets. 


What is Base Coinbase L2

Introduction to Base

Base is a secure, low-cost, and decentralized Layer 2 (L2) built on Ethereum, launched by Coinbase, the largest publicly traded U.S. crypto exchange at time of writing. Base is developed in collaboration with Optimism and utilizes the open-source OP Stack.

Coinbase is the largest publicly traded U.S. crypto exchange, with over 100 million verified users, and Base provides an entry point to introduce these users to DeFi. This in turn incentivizes existing decentralized applications to build on Base, as they can leverage Coinbase's existing products and user base to access a new pool of non-DeFi natives.

To date, the Base ecosystem includes established names like Aave, Compound, Sushiswap, and Uniswap, along with newer protocols like Friend.tech and BaseSwap. As of time of writing, Base has a TVL (total value locked) of over $160 million.

Base TVL

Source: DefiLlama

The Base team launched the Base mainnet on 9th August, 2023. To celebrate the launch, the Base team has also prepared ‘Onchain Summer’, a month-long onchain festival featuring the best builders and attracting prominent names including Coca Cola, Atari and many more. If you're interested to learn more about how you can start minting some of these Onchain Summer NFTs, find out more in our guide to claiming and minting NFTs on Base

In light of these series of announcements, let’s take a look at what Base is.

Base’s Architecture

By building using the OP Stack, Base is becoming part of the Superchain vision. The Superchain is a network of chains built using the OP Stack, which allows for them to share the same underlying security and have a common communication layer. In addition to making it easier for Base to deploy, the OP Stack allows for a higher level of scalability and interoperability. 

Coinbase has also delegated a team to join the Optimism team as core-developers, working on the open-source OP Stack. Together, they’re designing and building a protocol that can sequence multiple L2s, while providing interoperability and composability between the OP Stack.

Given that it is built out to be a L2, Base will be able to benefit from the upcoming EIP-4844, to which Coinbase contributed, which will be included in the Ethereum Dencun upgrade. EIP-4844 reduces the data availability cost significantly by storing the data in a new format known as blobs, instead of the existing structure, known as calldata. Should L2s pass on this cost saving to users, it translates to lower transaction costs across the L2 ecosystem.

Now, let’s take a deeper dive into the key characteristics of Base.

Base’s Characteristics

  1. High Level of Security | Secured by Ethereum

By building using OP Stack, Base taps on Ethereum’s security layer, which is currently the strongest amongst all chains given the stake weight. Moreover, this security is expected to increase even further with the proportion of staked ETH consistently increasing ever since the ETH Merge and subsequent Shanghai Upgrade which enabled withdrawal of staked ETH. 

  1. Empowered by Coinbase

Decentralized applications (dApps) building on Base will be able to access Coinbase’s existing suite of products and tools. In addition, these dApps will be able to gain access to Coinbase’s existing user base, which is approximately 100 million verified users, accounting for an estimated $80 billion worth of assets. Given the potential for users to easily onramp from Coinbase onto Base, dApps on Base might be able to benefit significantly from the liquidity.

  1. EVM-Equivalent

Various developer toolings are already available for Base, including the very commonly used Foundry, Hard Hat and Truffle. This allows developers to deploy their existing Ethereum code onto Base without having to make any code changes, retaining the functionalities and preventing the need for additional effort.

  1. Low fees

Base’s fees are 10x lower than Ethereum according to the 90 days average.

How Will Base Make Money?

At its current stage, Base will be monetized through sequencer fees, which are earned when any transaction is executed on Base. However, the team has stated that that is only a small part of it, with their focus being on increasing utility. 

“What we're really focused on is increasing utility, which increases the number of use cases that folks can do through Coinbase and increases the opportunity for Coinbase to provide easy-to-use, trusted experiences that we can monetize. We're not running the sequencer to make a bunch of profit. We're running the sequencer to enable innovation. And we're gonna be reinvesting that money in innovation. And we're going to be focusing monetization efforts where we've always monetized, which is the user experience.”

- Jesse Pollak, Coinbase’s Head of Protocols and Creator of Base

Base's Roadmap

As of launch, Base is a Stage 0 rollup, where while all rollup transactions go on-chain, the on-chain mechanism for posting new state roots can be a multisig with no active fraud proof or validity proof. The Base team plans to progress Base to a Stage 1 rollup, with higher levels of decentralization and trustlessness. This includes:

  • Launching at least one fault prover for the OP Stack that will secure Base and the Optimism Mainnet by leveraging validators to identify and challenge faults.

  • Launching a version of the Superchain that can sequence transactions for Base, Optimism and any other OP Stack rollups, protecting the rights for any user to participate in these ecosystems. 

  • Progressing Base and Optimism to Stage 2 rollups, with levels of decentralization and security comparable to Ethereum.

Conclusion

While Base is still in its early stages, it occupies a unique position in the Layer 2 space due to its strategic synergy of Coinbase, one of the largest crypto exchanges, and Optimism, one of the top L2 technology stacks. With its focus on user experience and adding more beginner-friendly features like ratings and reviews around dApps and tokens, it has the potential to introduce DeFi to more conservative and newer investors, which will in turn drive mass adoption and fulfill its vision of bringing a billion people on chain. 

CoinGecko's Content Editorial Guidelines
CoinGecko’s content aims to demystify the crypto industry. While certain posts you see may be sponsored, we strive to uphold the highest standards of editorial quality and integrity, and do not publish any content that has not been vetted by our editors.
Learn more
Want to be the first to know about upcoming airdrops?
Subscribe to the CoinGecko Daily Newsletter!
Join 600,000+ crypto enthusiasts, traders, and degens in getting the latest crypto news, articles, videos, and reports by subscribing to our FREE newsletter.
Tell us how much you like this article!
Vote count: 33
CJ
CJ
CJ is a business graduate that has been involved in crypto for 4 years and specializes in DeFi protocols. He is also interested in TradFi becoming DeFi, and has written for ByBit, SwitcheoLabs, and others. Follow the author on Twitter @fishmarketacad

Related Articles

Select Currency
Suggested Currencies
USD
US Dollar
IDR
Indonesian Rupiah
TWD
New Taiwan Dollar
EUR
Euro
KRW
South Korean Won
JPY
Japanese Yen
RUB
Russian Ruble
CNY
Chinese Yuan
Fiat Currencies
AED
United Arab Emirates Dirham
ARS
Argentine Peso
AUD
Australian Dollar
BDT
Bangladeshi Taka
BHD
Bahraini Dinar
BMD
Bermudian Dollar
BRL
Brazil Real
CAD
Canadian Dollar
CHF
Swiss Franc
CLP
Chilean Peso
CZK
Czech Koruna
DKK
Danish Krone
GBP
British Pound Sterling
GEL
Georgian Lari
HKD
Hong Kong Dollar
HUF
Hungarian Forint
ILS
Israeli New Shekel
INR
Indian Rupee
KWD
Kuwaiti Dinar
LKR
Sri Lankan Rupee
MMK
Burmese Kyat
MXN
Mexican Peso
MYR
Malaysian Ringgit
NGN
Nigerian Naira
NOK
Norwegian Krone
NZD
New Zealand Dollar
PHP
Philippine Peso
PKR
Pakistani Rupee
PLN
Polish Zloty
SAR
Saudi Riyal
SEK
Swedish Krona
SGD
Singapore Dollar
THB
Thai Baht
TRY
Turkish Lira
UAH
Ukrainian hryvnia
VEF
Venezuelan bolívar fuerte
VND
Vietnamese đồng
ZAR
South African Rand
XDR
IMF Special Drawing Rights
Cryptocurrencies
BTC
Bitcoin
ETH
Ether
LTC
Litecoin
BCH
Bitcoin Cash
BNB
Binance Coin
EOS
EOS
XRP
XRP
XLM
Lumens
LINK
Chainlink
DOT
Polkadot
YFI
Yearn.finance
Bitcoin Units
BITS
Bits
SATS
Satoshi
Commodities
XAG
Silver - Troy Ounce
XAU
Gold - Troy Ounce
Select Language
Popular Languages
EN
English
RU
Русский
DE
Deutsch
PL
język polski
ES
Español
VI
Tiếng việt
FR
Français
PT
Português
All Languages
AR
العربية
BG
български
CS
čeština
DA
dansk
EL
Ελληνικά
FI
suomen kieli
HE
עִבְרִית
HI
हिंदी
HR
hrvatski
HU
Magyar nyelv
ID
Bahasa Indonesia
IT
Italiano
JA
日本語
KO
한국어
LT
lietuvių kalba
NL
Nederlands
NO
norsk
RO
Limba română
SK
slovenský jazyk
SL
slovenski jezik
SV
Svenska
TH
ภาษาไทย
TR
Türkçe
UK
украї́нська мо́ва
ZH
简体中文
ZH-TW
繁體中文
Login to track your favorite coin easily 🚀
By continuing, you agree to CoinGecko Terms of Service and acknowledge you’ve read our Privacy Policy
or
Forgot your password?
Didn't receive confirmation instructions?
Resend confirmation instructions
IT'S FREE! Track your favorite coin easily with CoinGecko 🚀
By continuing, you agree to CoinGecko Terms of Service and acknowledge you’ve read our Privacy Policy
or
Password must contain at least 8 characters including 1 uppercase letter, 1 lowercase letter, 1 number, and 1 special character
Didn't receive confirmation instructions?
Resend confirmation instructions
Forgot your password?
You will receive an email with instructions on how to reset your password in a few minutes.
Resend confirmation instructions
You will receive an email with instructions for how to confirm your email address in a few minutes.
Get the CoinGecko app.
Scan this QR code to download the app now App QR Code Or check it out in the app stores
coingecko
Continue in app
Track prices in real-time
Open App