Abstract
Base Chain, a star born with a golden key, Layer2, has gained support from the top American exchange Coinbase. With its focus on SocialFi and the thriving MEME culture under Farcaster, it has stood out among many Layer2 projects and carved out a place in the crypto market.
With the upgrade in Cancun and the approval of the ETH ETF, Layer2, LSD, and Restaking tracks have also received unprecedented attention. In particular, the Base Chain in the Layer2 sector, backed by the low-cost, open-source features built on the OP Stack module and the blessing of the top American exchange Coinbase, has already reached a TVL of $7.7 billion in just 10 months. The latest data shows that in May, the on-chain profit of the Base Network reached $6.98 million, making it the most profitable Layer2 network, surpassing networks like Blast and Optimism. The ecosystem has garnered widespread bullish expectations from many crypto enthusiasts and large institutions, showcasing its strength.
Below, LBank will take a comprehensive look at the development history, ecosystem interpretation, and key track analysis of Base, allowing more users to have a deep understanding of the shining points of Base Chain in the MEME and SocialFi fields.
Introduction to Base
Base is a Layer2 scaling solution developed by Coinbase, with technical support provided by Optimism’s OP Stack. It aims to create a more open, user-friendly, secure, and low-cost trading environment to achieve the scaling goals of the Ethereum network.
Based on the OP Stack technology stack from Optimism, Base has developed an Ethereum Layer2 network using the Optimism Rollup scaling solution, fully compatible with the Ethereum Virtual Machine (EVM). It provides applications with seamless integration with Coinbase, convenient fiat gateways, and access to millions of verified users in the Coinbase ecosystem.
Development History of Base
On February 23, 2023, Coinbase announced the launch of the Ethereum Layer 2 network Base based on OP Stack and established the Base Ecosystem Fund.
In February 2023, Coinbase announced the launch of the Base testnet.
On August 9, 2023, Coinbase officially launched the Base Network mainnet.
In August 2023, the MEME token BALD on the Base Chain saw a surge in value, reaching a market cap of over a billion in just two days, but a subsequent liquidity withdrawal led to a sharp decline. This MEME frenzy brought early exposure to the Base Chain.
On August 10, 2023, friend.tech officially launched on the Base Chain, flooding the social network with invite codes.
In August 2023, Base and Optimism jointly launched a governance and revenue-sharing framework, pioneering the Layer2 economic alliance.
On August 31, 2023, DEX protocol Velodrome introduced the Aerodrome forked DEX project on the Base Chain.
On September 2, 2023, Aerodrome’s TVL briefly reached $200 million, accounting for 50% of the total TVL on Base.
In October 2023, friend.tech’s TVL surpassed $50 million, with protocol revenue reaching 14,000 ETH.
On February 23, 2024, the social platform Farcaster Frames started using the Base Chain, with the official Based Frames receiving multiple grants.
In May 2024, Farcaster completed a $150 million funding round, with protocol revenue reaching $1.54 million and the total number of users surpassing 450,000.
Technical Features of Base
Base Chain, as an essential part of the OP Stack, has significant technical advantages. Firstly, it leverages Ethereum’s security, stability, and scalability and incorporates Coinbase’s best practices to ensure smooth integration of developers from Coinbase, Ethereum Layer 1, and other interoperable blockchains into the Base Chain.
Base adheres to decentralization and open principles, welcoming all visionary creators. Built on top of Optimism’s open-source OP Stack, it ensures a permissionless, innovation-friendly environment. Base provides EVM-compatible services at extremely low costs, allowing for fee transactions for decentralized applications using simple APIs for account abstractions, and securely building multi-chain applications with easy-to-use bridges.
Furthermore, Base and Optimism jointly introduced a governance and revenue-sharing framework:
The larger of 2.5% of the total revenue of sequencers on Base Chain or 15% of the net revenue of sequencers on the L2 (L2 transaction revenue minus L1 data submission costs) will belong to the Collective.
The Optimism Foundation also provides Base with the opportunity to earn up to approximately 118 million OP tokens over the next six years.
Secondly, with strong support from Coinbase, the AA wallet based on account abstractions is expected to improve the accessibility of on-chain transactions for new users, providing a convenient on-chain transaction method for more users. The seamless integration of Base with Coinbase’s products, users, and tools allows developers to access over 1.1 billion verified users and $800 billion in assets in the Coinbase ecosystem. This integration not only enhances user experience but also accelerates the adoption of blockchain technology.
Rapid Capital Influx, Continuous Growth of On-Chain Data
Despite the absence of coin issuance expectations, Base Chain remains a highly competitive network in the Layer2 field. L2BEAT data shows that the market share of the Base Chain has reached 16.08% (as of June 5th), with only a marginal difference of 0.42% compared to OP Mainnet’s 16.50%. Moreover, a crucial indicator of a chain’s value is Total Value Locked (TVL), and currently, Base’s TVL has reached $7.6 billion, ranking third in Layer2 with a growth rate of 6.56%.
According to DefiLama’s data, the most significant growth occurred between mid-March and April when the TVL increased from $695 million to $1.66 billion, a growth rate of 138.85%. Currently, the TVL is maintained at around $1.7 billion.
The data shows that Base’s daily trading volume is $313 million, although lower than Arbitrum’s $431 million and Solana’s $1.026 billion, for a new chain less than a year old, it shows great potential.
Furthermore, user metrics are the most significant indicator of a network’s popularity and adoption. Base Network, leveraging Coinbase’s massive user base of 110 million, has gradually accumulated a large number of active users since its mainnet launch.
According to BaseScan data, the total number of wallet addresses on the Base Chain has reached 10.39 million (as of June 4, 2024), with 270,000 active wallet addresses in 24 hours.
Of particular note is that in mid-to-late March, the Base Chain saw record highs in new user numbers, active user numbers, and transaction volumes, largely due to the MEME craze at the time. After integrating EIP-4844 on March 14th, transaction fees significantly decreased, and on March 30th, NFT project Mfers’ founder Sartoshi announced the launch of his meme token mfercoin on the Base Chain, creating a miraculous 100-fold surge in just six hours.
Base Ecosystem Wealth Effect
According to incomplete statistics, the number of projects in the Base ecosystem has exceeded 300, covering a wide range of cross-chain bridges, wallets, oracles, node providers, and basic infrastructure, as well as financial products such as DEX, lending, aggregators, derivatives, and unique MEME and Social native narratives, nurturing a distinctive Base ecosystem.
In tracking Total Value Locked, it is evident that there have been two significant growth anomalies on the Base Chain. The first increase occurred in September 2023, driven by the explosion of Friend.tech and the attraction of DEX led by Aerodrome. The second increase happened in mid-to-late March 2024, with Farcaster’s continued growth, gas fees reduction after the Cancun upgrade, the prevalence of MEME, and a surge in on-chain liquidity, further boosting TVL.
The social protocols Frend.tech and Farcaster, along with the institutional backing from Paradigm, have been crucial factors in the growth of the Base Chain. As a top institution in the crypto space, Paradigm’s involvement in various financial mechanisms and market sentiment speculation has influenced projects like the NFT trading market newcomer Blur and the Bitcoin collateral protocol Babylon.
The Kingdom of Social Protocols
If Friend.tech’s rise in 2023 was just the beginning for the Base Chain, then in 2024, the super-social giant Farcaster’s disruptive social data, $150 million funding, VC bets, and Vitalik’s endorsement have pushed Base Chain ahead in the SocialFi race.
According to the Base website, the proportion and attractiveness of social interactions on Base Chain are higher compared to other public chains, capturing a larger market share. Behind this success lies the financialization of attention economics and the unique social environment support, as it is said, “Your network is your net worth.” The social interactions on the Base Chain facilitate mass adoption.
Next, the LBank Research Institute will provide a detailed review of the popular social platforms on Base Chain, for reference purposes only and not as investment advice.
The Rising Star and VC Hub Farcaster
Farcaster is the leader in social products in the current crypto market, with a valuation of $1 billion and total funding of $180 million. It has received praise from Vitalik and strong support from top VCs like a16z and Paradigm. As Variant puts it, the Farcaster community resembles the early crypto community I (Jesse) joined ten years ago: optimistic, technical, ambitious, collaborative, and always online.
Massive funding, airdrop expectations, and other factors have led Farcaster to gain significant market attention early on. With the promotion of Frames’ features and the MEME frenzy, Farcaster has accumulated 460,000 users, with protocol revenue reaching $1.65 million.
For the average user, Farcaster is a rapidly growing protocol aimed at building a “fully decentralized social network.” It stands out from traditional social media with its high-quality, low-noise community atmosphere. As an essential part of the Base ecosystem, Farcaster has spawned numerous products such as the creator platform Paragraph, the content monetization client Jam, the community task platform Bountycaster, and developer tools like Neynar, largely due to the implementation of Frames’ features.
The Declining Aristocrat Friend.tech
Friend.tech is a decentralized social application based on the Base Chain, combining fan economics and on-chain gaming, similar to a web3 knowledge planet. It links asset issuance to social influence, where users can enter specific rooms to view content by purchasing the token ‘KEY.’ As the quantity purchased increases, the value of Key rises.
Within six months of its launch, Friend.tech gained popularity through niche marketing tactics like invite code scarcity. However, product experience issues such as high transaction fees, excessive speculation, slow loading times, lag, delayed data updates, high slippage, and severe bot damage to users caused a decline in TVL from a peak of $50 million to around $10 million.
MEME Wonderland
As the hottest sector of 2024, MEME continues to fuel market enthusiasm. The explosion of MEME has played a significant role in propelling Solana and Base Chain quickly ahead of other networks. BASE, as an emerging network backed by COINBASE, provides an ideal speculative environment for MEME enthusiasts by seamlessly integrating Ethereum’s vast infrastructure and user base. This feature has made BASE a new favorite among MEME enthusiasts.
Next, the LBank Research Institute will provide a detailed review of popular MEME coins on the Base Chain, for reference purposes only and not as investment advice.
TYBG
TYBG is known as the MEME hub of the Base Chain, issued by The Based Institute. This is a research institution led by Jesse Pollak personally, aiming to support the development of optimistic, rich, and Based proprietary cultural narratives in the Base ecosystem.
Currently, the price of TYBG is $0.0002448 USDT, with a market cap of $30.18 million, ranking #928, with a maximum increase of 10,767.8%.
BRETT
Inspired by the character Brett from the comic book “Boys’ Club,” BRETT is one of the most important cultural icons in the crypto world and a close friend of the iconic PEPE. Brett’s character is known for his laid-back attitude and love for video games, resonating with fans worldwide. BRETT has no contract and lacks minting functions, with token creation entirely community-driven, and creators cannot create more tokens or manipulate token contracts.
Currently, the price of BRETT is $0.1394 USDT, with a market cap of $1.363 billion, ranking #81, with a maximum increase of 16,207.8%.
DEGEN
Initially airdropped into the Degen community within Farcaster, DEGEN will continue to be airdropped to participants in the Base and Farcaster ecosystems. It is primarily used for social payments on the Base Chain.
Currently, the price of DEGEN is $0.02444 USDT, with a market cap of $3.04 billion, ranking #243, with a maximum increase of 109,003.7%.
Toshi
TOSHI is a MEME coin featuring a “cat” as an animal, named after the cat of Coinbase founder Brian Armstrong, aiming to build the largest cat community on the Base Chain.
Currently, the price of Toshi is $0.0004311 USDT, with a market cap of $18.3 million, ranking #330, with a maximum increase of 2,306,626.5%.
Conclusion
From a compliant US exchange to a disruptor in the crypto ecosystem, Base Chain has opened a new attempt at profitable trading platforms. Its performance in the first quarter’s financial reports has been outstanding, with a net income of $1.6 billion, a year-on-year growth of 116%, far exceeding Wall Street’s expectations. In the first quarter of 2024, Base Chain saw a TVL growth rate of 165.14%.
In the ever-evolving crypto landscape, Base has become a beacon of hope. With seamless integration with the AA wallet launched by Coinbase and significant growth indicators driven by the explosive growth of memecoins, Base is entering a new era of attention in the crypto field.
As Jesse Pollak said, “stay Based, stay onchain,” with the high-performance and low gas advantages of the OP Stack superchain, Base Chain is gradually building a Coinbase-style narrative cultural ecosystem with a focus on social and MEME. With over a billion users on Coinbase and regulatory compliance advantages, Base Chain is still in its early stages. With the arrival of ETHETF and the growth of on-chain activity metrics on Layer2 chains, Base is poised to follow in the footsteps of Arbitrum, Optimism, and Solana and achieve the goal of Mass adoption.
