The world of blockchain is constantly evolving, and recently a newcomer has emerged as one of Ethereum’s fast-growing Layer 2 (L2) solutions: Base. Launched on 9 August 2023 by Coinbase, the well-known American exchange, Base has rapidly established itself as the platform of choice for developers wishing to create decentralised applications (DApps).Â
This blockchain, the result of a collaboration with Optimism, aims to provide a secure, cost-effective and user-friendly environment, while drawing on Ethereum‘s robust infrastructure and, of course, Coinbase’s reputation.
The Genesis of Base
The launch of Base marks an important milestone in Coinbase’s history, with the introduction of its first blockchain. Developed in partnership with Optimism, it uses OP Stack, an open-source development stack that underpins Optimism. The partnership gives developers access to an ecosystem of 110 million verified users and more than $80 billion in assets, providing an unprecedented platform for innovation and application creation.
Technological Foundations
Understanding what a layer 2 is is key to understanding the importance of Base. Layer 2 solutions, such as Base, are built on top of an existing blockchain (in this case, Ethereum) and aim to improve scalability, transaction throughput and efficiency without compromising security or decentralisation. Base and other L2 networks, such as Optimism, Polygon, zkSync and Arbitrum, provide innovative solutions to these challenges.
There are fundamental differences between Layer 2 (L2) solutions and standalone blockchains such as Solana or Avalanche. Layer 2 solutions, such as Base, are developed as extensions to a pre-existing blockchain, notably Ethereum for the Base blockchain. Their main objective is to increase scalability, improve transaction throughput and reduce costs while preserving the intrinsic security and decentralisation principles of the underlying blockchain.
In contrast, standalone blockchains, such as Solana and Avalanche, have been designed independently with a unique architecture.
Layer 2 solutions take advantage of the security and established ecosystem of the main blockchain, such as Ethereum, enabling them to offer significant performance improvements without compromising the fundamental aspects of security and decentralisation. There are different approaches to L2s, but we’ll come back to these in a separate article.
Base Applications
Base serves as the foundation for a multitude of use cases, from payment applications to token swaps, liquidity provision, token transfer and DAO launch. The best known is probably Friend.tech, the social media network, but you’ll also find platforms like Uniswap and BaseSwap for onchain trading and adding liquidity.Â
Advantages and disadvantages
Among Base’s key advantages are its low transaction costs, accessibility and scalability, thanks to compatibility with EVMs and consolidation of trades off the main chain.
However, concerns remain about the centralisation and long withdrawal times of the official bridge. 3rd party bridges exist and offer near-instant withdrawals to other blockchains,
Conclusion
Since its launch, Base has grown rapidly, with a total blocked value (TVL) of over $1.5 billion, up from $477 million in March.
As the first blockchain to be launched by a listed company, it opens up new horizons for adoption and innovation in the Web3 ecosystem. Not least with the arrival of Coinbase’s smart wallet.
With strategic partnerships and a growing community of developers, Base is positioning itself as a major force in the blockchain landscape, promising to bring accessibility, efficiency, and security to its users. Since BNB Chain, Base is the blockchain that has the best chance of facilitating the mass adoption of cryptocurrencies.
