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Base blockchain by Coinbase: a full guide
World’s no.2 crypto exchange, Coinbase, has launched its own L2 network called Base, and it already has over $200 million in TVL. Here’s all you need to know about Base’s Optimism-based tech and ecosystem, including the viral friendl.tech app.
TL;DR
- Base is an optimistic rollup chain built by Coinbase in collaboration with Optimism. The public mainnet launched on August 9, and by mid-August Base already had 9.5 million transactions and $200 million in TVL.
- Base is EVM-compatible with low fees ($0.10-$0.20). For dApp developers, building on Base should mean access to Coinbase’s 110 million users and easy integrations with Coinbase exchange, fiat payments, and other centralized products.
- You can easily add Base to MetaMask and bridge ETH using the official bridge, as well as others like Portal by Wormhole, Stargate, etc. The gas currency is ETH, and there are no plans to launch any new token. Any offers to buy “BASE tokens” are scams.
- The biggest apps by TVL on Base are AMMs like BaseSwap and SwapBased, but the best-known app in the ecosystem is friend.tech. This SocialFi project allows users to trade “shares” (social tokens) issued by crypto influencers, and it already has $20 million in volume.
- Base and Optimism are the first two blockchains in the “Superchain” - a planned network of L2 chains. All of them will use the OP Stack - Optimism’s set of open-source software that will include everything from explorers to a governance module.
- For now, Base is partly centralized - for example, it has just one sequencer node that is controlled by Coinbase. However, Base and Optimism have a joint decentralization roadmap.
- Base already has 40+ collections on OpenSea and even hosts NFT mints by brands like Coca-Cola.
- Base has even had its own major memecoin rally and rug pull: on July 30-31, a token called $BALD attracted $200 million in daily DEX volume and then collapsed after its deployer withdrew all the liquidity from the pool.
What is Base?
Base is a new optimistic rollup developed by Coinbase in partnership with Optimism. It is EVM-compatible, with low fees (around $0.10-$0.20), bridges, and a lively ecosystem that includes Uniswap and Sushi.
The key advantage of the new L2 for dApp developers should be easy integrations with Coinbase products, APIs, fiat payments, and other perks that we associate with major centralized platforms. To this, you should add Coinbase’s 110-million-strong user base, which will supposedly be eager to explore DeFi on Base.
Base testnet was launched on February 23, 2023. As of August 15, it has processed over 31 million transactions. The mainnet was opened to developers on July 13, and to the general public on August 9. By mid-August, the transaction count had climbed to 9,500,000, and the DeFi TVL had reached $200 million. It’s now the fifth-largest L2 chain after Arbitrum, Optimism, zkSync Era, and dYdX, according to L2Beat.
Background: Optimism Superchain and OP Stack
Optimism ($OP) is the second-biggest Ethereum L2, with $2.78 billion in TVL in August 2023. It started out as a regular optimistic rollup but is evolving into something much bigger: a “superchain” for layer-2s based on the vast OP Stack.
OP Stack is the large set of open-source software that underlies Optimism. Anything and everything that goes or will go into Optimism, from the core L2 technology to block explorers and an eventual governance mechanism, is part of the Stack.
Optimism’s hard forks (similar to Ethereum’s Shanghai or Cancun) are basically upgrades to the OP Stack. The current version is called Optimism Bedrock.
The ultimate goal is for OP Stack to support the Superchain - a multichain ecosystem of L2 networks (they don’t all have to be optimistic rollups). You can find similarities here with the Cosmos ecosystem or Polygon 2.0.
Since the whole stack is open-source and modular, independent teams will be able to build and deploy new L2s on the Superchain permissionlessly using the features they need. For example, a dApp currently running on Optimism Mainnet can create a chain of its own.
With time, Optimism Mainnet should come to play the role of a hub for the Superchain – a bit like Cosmos Hub in the Cosmos ecosystem. App and protocol developers who contribute to the ecosystem will be rewarded through the Retroactive Public Goods funding program.
By the way, this concept of an ecosystem of interoperable L2s is something that we discussed during Pontem’s expert panel on optimistic rollups: check out the main insights here.
For now though, there is just one other blockchain in the Superchain, apart from Optimism Mainnet: Base. Coinbase is also listed as a core contributor to the OP Stack, together with OP Labs and Lattice, an EVM product studio.
Base technology
Deploying dApps and tokens
Building on Base is very close to building on Ethereum, with support for all EVM dev tools like MetaMask, Hardhat, Remix, etc. Moreover, any existing ERC-20 token can be deployed on Base and added to the official bridge (though this requires manual approval by the Base team).
Fees
Every transaction fee consists of two parts: Base’s own execution fee and the fee for posting the transaction to Ethereum mainnet. Overall, using Base should be, on average, 10 times cheaper than Ethereum mainnet.
A share of the fees earned by Base will be transferred to the Optimism Collective - Optimism’s governance organization that includes all $OP holders.
Centralization
One issue that concerns many users is centralization, especially since the only sequencer node that Base currently uses is controlled by Coinbase.
However, according to Base protocol lead Jesse Pollak, Coinbase doesn’t have the power to upgrade Base’s smart contracts or reverse transactions unilaterally, so it’s not fully centralized.
On the other hand, he notes that any chain that uses OP Stack, including Optimism itself, has a permissioned system of upgrades and authorizing transaction challenges.
This issue needs to be solved at the higher level of the Optimism ecosystem, though. Base and Optimism have an ambitious decentralization roadmap: for example, in 2023, the projects plan to make contracts upgradable by a security council with a “decentralized quorum”, as well as launch the first version of the Superchain where sequencing can be done by many nodes.
EIP-4844
Together with the Ethereum Foundation and Optimism, Base is pushing for the implementation of EIP-4844 - an Ethereum feature that can cut rollup transaction fees by up to 100x. It introduces a new type of transaction (“shard blob”) that makes it much more economical for rollups to store and submit data.
Blobs will be part of Ethereum’s eventual sharding system, but its first implementation is coming already in Q4 2023 with the “Dencun” upgrade (Deneb + Cancun).
What can you do with the Base mainnet and testnet in MetaMask?
1) Add Base to MetaMask
Click on the network icon in the top left → Add Network → Add Network Manually - and enter the following parameters:
Network name: Base Mainnet
Chain ID: 8453
Currency symbol: ETH
Block explorer: https://basescan.org
If you use Coinbase Wallet, you’ll find Base enabled by default under the list of available networks.
2) Bridge ETH to Base mainnet
You can use the official, Stargate bridge, Portal by Wormhole, SquidRouter, or Orbiter.
- The official Base Bridge supports only transfers between Ethereum and Base in ETH, USDC, DAI, and cbETH (Coinbase ETH, a liquid staking derivative). It’s also the most reliable way to send ETH to a brand-new Base account with zero balance.
- With Portal by Wormhole, you can send various tokens between Base and 20+ other blockchains, including Aptos. However, you’ll need to have some ETH on Base already to pay the bridging fee.
- Stargate Finance allows you to transfer ETH, USDC, STG, and MIM, between Base; Optimism; Arbitrum; Ethereum; Polygon; Avalanche; and BNB Chain - and swap them for other tokens in the process. For example, you can send USDC from Base and receive USDT on Polygon.
3) Swap
As of August 15, there are quite a few working DEXs on Base, both multichain and built specifically for the new blockchain :
Apart from major cross-chain assets like ETH, DAI, and USDC, you’ll find Base-native tokens: BASIN, USDbC, BSWAP, ALB, etc.
4) Get a .base domain name
Masa Finance is the biggest provider of Web3 domain names on Base. A .base name with 5 or more characters costs just $1 to mint; one with 4 characters is $5, and so on. .base names are already traded on OpenSea.
5) Use DeFi
Farming: BaseSwap, AlienBase, and SwapBased all have farms. As usual in DeFi, APR is higher for pools with smaller native tokens (up to 500%), while pools with large assets like USDC and ETH will earn you 20-30%.
Yield aggregation: Beefy Finance has auto-compounding vaults for LPs of the main Base AMMs that can earn a higher yield than if you deposit into farms on the AMMs themselves.
Lending & borrowing: on Compound and Moonwell, you can supply and borrow ETH, cbETH, and USDC.
Cross-chain swaps: SquidRouter can help you swap between dozens of tokens on Base and around 30 other chains.
NFT staking: stake a Dackie NFT on DackieSwap for rewards in WETH.
6) Trade shares on friend.tech
Friend.tech is the latest SocialFi sensation - a dApp where you buy “shares” released by your friends or Twitter influencers. Famous crypto personalities like Hsaka (@HsakaTrades), Cobie (@Cobie), and Gainzy (@gainzy222) are already on friend.tech, and the platform has accumulated over $20 million in trading volume as of August 20.
Holding a share allows you to enter a private chat with the influencer and view other NFT-gated content by them. The issuer gets a percentage of the proceeds from each share sale.
6) Mint and trade NFTs
OpenSea supports Base, and there are over 40 collections, including DeeKay Motion, DackieOnBase, Tiny Based Frogs, Based Fellows, Based Rekt Chickens, and other variations on the “based” theme. Here we should note that in the jargon of Crypto Twitter “based” means “awesome”, so the potential for puns is endless.
On top of this, Base has launched an NFT initiative called On-Chain Summer. Some of the daily NFT mints are partnerships with leading Web2 and Web3 brands, such as Coca Cola, Global Masterpiece collection, Atari, and Optimism.
The rise and rug-pull of $BALD
In a year of memecoin rallies, it shouldn’t surprise us that the first project to explode (and collapse) on Base was a memecoin: $BALD. The interesting twist is that lots of people thought Sam Bankman-Fried himself could have been involved.
When $BALD launched on July 30, when Base mainnet was still in developer-only mode. The memecoin’s name allegedly hinted at the founder and CEO of Coinbase, Brian Armstrong, who is completely bald.
At that point, there were already a couple of working DEXes on Base: LeetSwap and RocketSwap. LeetSwap quickly became the hub of degen action as speculators with developer access rushed to trade memecoins like $BALD, $COIN, and $BASED.
In a single day on July 30, almost $60 million in ETH was bridged to Base. Trading volume on LeetSwap rose to $200 million, and $BALD accounted for over half of that. The token price skyrocketed over 3,000% in 24 hours, and the market cap reached almost $300 million. It was a memecoin rally on steroids: new token, new DEX, new chain – and no easy way to even bridge funds out of it yet.
The very next day, on July 31, however, the creator of the $BALD pool unexpectedly withdrew all the liquidity from the pool – around $25 million. The price of the memecoin quickly dropped 90%. This is known as a rug pull: a crypto project’s developer “pulls the rug” from under the users and disappears with the money.
Is it possible that the culprit is someone we all know, though? Some Crypto Twitter users pointed out that the wallet addresses used by the deployer were associated with Sam Bankman-Fried, the disgraced CEO of FTX. The wallet received many transfers from FTX over the years, and even the language of the tweets in the official $BALD account contained phrases that SBF often used (e.g. “quite well”). Others wrote that it could be someone else from FTX or Alameda.
However, @zachxbt, Twitter’s leading on-chain investigator, soon dashed this conspiracy theory. His analysis suggested that the man behind $BALD was likely @milkyway16eth, a well-known DeFi speculator. Indeed, SBF was under house arrest at that point, and, as pointed out by Tiffany Fong, he didn’t have access to Twitter and could hardly run an account for a memecoin or manage a DEX pool.
We may never know for sure who launched BALD and got away with $25 million in liquidity. Since then, many more memecoins have pumped and dumped on Base: $PONZI, $MEMES, $CocaCola, $BALD2.0, etc. Perhaps the takeaway here is that episodes of memecoin mania always end the same way: just because it’s Base and not Ethereum doesn’t make any difference.
Attention: there is no BASE token!
Coinbase doesn’t plan to release any new token for Base. Like other rollups, the network will use ETH for gas fees.
If anyone tries to get you to buy BASE tokens, know that it’s a scam. By the way, the same goes for any offers of Pontem (or PONT) tokens or LayerZero tokens: they are all scams.
Base is interesting in the context of Optimism’s larger Superchain project - and optimistic rollups as a whole remain one of the most dynamic areas of the blockchain industry. We’ll keep covering the latest trends in the L2 space, both optimistic and ZK - make sure you follow Pontem on Telegram, Twitter, and Discord so that you don’t miss the next article!
About Pontem
Pontem Network is a product studio building the first-ever suite of foundational dApps for Aptos. Pontem Wallet, the first wallet for Aptos, is available for Chrome, Mozilla Firefox, Android, and iOS.
Use Pontem Wallet to store and send any tokens on Aptos. The wallet is integrated with our Liquidswap DEX, the first DEX and AMM for Aptos, Topaz and Souffl3 NFT marketplaces, Ditto and Tortuga liquid staking platforms, Argo and Aries lending protocols, and all other major Aptos dApps.
Our other products include the browser code editor Move Playground, the Move IntelliJ IDE plugin for developers, and the Solidity-to-Move code translator ByteBabel – the first ever implementation of the Ethereum Virtual Machine for Aptos.
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