Everything You Need to Know About Base
In the ever-evolving world of blockchain technology, a new player is set to challenge established players on the ease of use, security, and accessibility of interacting with decentralized applications (DApps). This player is Base, an Ethereum layer-2 (L2) network developed by Coinbase, one of the largest cryptocurrency exchanges in the world. Base aims to provide a secure, low-cost, and developer-friendly platform for building DApps, with the ultimate goal of onboarding billions of users into the crypto-economy.
What is Base?
Base is a layer-two (L-2) chain developed by Coinbase, built on OP Stack, a layer-two scaling solution for Ethereum. It's an optimistic rollup chain built on open-sourced technology, and initially, it will be highly centralized in terms of block production. However, Base plans to achieve complete decentralization and interoperability with other blockchain networks in the future. The primary goal of Base is to offer a secure, low-cost, and developer-friendly way for anyone to build decentralized apps (DApps) on-chain.
Base is designed to target the Ethereum developer community and Coinbase's existing user base, functioning as a platform for Coinbase to experiment with DeFi.
Base has already announced collaborations with major decentralized applications, including Aave, Sushiswap, and NFT marketplaces like Magic Eden.
How Does Base Work?
Base leverages the "superchain" concept, where Optimism provides the tech stack for other blockchains to build and be secured by Optimism. At the same time, Base benefits from synergies from EIP-4844, a future Ethereum upgrade that aims to drastically lower transaction fees between L2 chains. This would reduce the friction of interacting with Base and could onboard Coinbase's significant user base, especially first-time crypto users, to DeFi.
The technology behind Base verifies and rolls up transactions off-chain (in batches) before submitting them to Ethereum. This process reduces congestion on Ethereum and helps Base users avoid the high, gas-heavy transaction fees on Ethereum. Initially, Base intends to charge a low gas fee, similar to other Ethereum Layer 2 counterparts, such as Arbitrum and Optimism. However, in the future, Base aims to reduce its transaction fees to a nominal number, depending on the success and adoption of Base.
Future of Base
The future of Base holds several potential opportunities and challenges. Coinbase is betting on web3 and L2 adoption and wants a piece of the future revenue cake. Regulatory concerns remain for CoinBase, and it is unlikely that Base can launch a token amid an uncertain regulatory climate. Still, liquidity is not expected to be a problem as total funds of more than $70 million in Eth have already been bridged to Base so far through a one-sided bridge.
Coinbase does not plan to directly rival other exchanges like Binance with this move. But it is betting on decentralized technology and further adoption of Ethereum through its scaling solutions. Base could add significant utility to the DeFi space and, most excitingly, prompt DeFi protocols to build applications appealing to Coinbase’s more conservative and beginner user base — and contribute to driving mass adoption.
In conclusion, Base is a promising new development in the blockchain and cryptocurrency space. It aims to solve many issues currently faced by users and developers in the crypto-economy, such as high transaction fees and scalability issues. With its focus on providing a secure, low-cost, and developer-friendly platform for building DApps, Base has the potential to impact the future of the crypto-economy significantly.