Abstract

Base Chain, a star layer2 born with a golden key, has received support from Coinbase, a top US exchange. With its Farcaster-based SocialFi and prosperous MEME culture, it has stood out from a number of Layer2s and occupied a place in the crypto market.

Under the dual-frequency resonance narrative of the Cancun upgrade and the approval of the ETH ETF, the Layer2, LSD and Restaking tracks have also received unprecedented attention. Among them, the Base chain in the Layer2 sector, with its low cost and open source features built on the OP Stack module and the support of Coinbase, a top US exchange, has reached a TVL of US$7.7 billion in just 10 months. The latest data shows that the Base network chain profit reached 6.98 million US dollars in May, becoming the second-layer network with the highest profit, and surpassing networks such as Blast and Optimism. The ecosystem has been generally bullishly expected by many crypto enthusiasts and large institutions, and its strength should not be underestimated.

Below, LBank will sort out and review the progress of the Base ecosystem based on the development history of Base, ecological interpretation, and key track interpretation, so that more users can deeply understand the highlights of the Base chain in the fields of MEME and SocialFi.

Base Introduction

Base is a Layer2 expansion solution developed by Coinbase, with technical support from Optimism's OP Stack, and is committed to creating a more open, more user-friendly, safer, and lower network fee trading environment to achieve the goal of expanding the Ethereum network.

Base is developed based on Optimism's OP Stack technology stack. It creates an Ethereum Layer2 network that uses the Optimism Rollup expansion solution and is fully compatible with the Ethereum Virtual Machine (EVM). It provides applications with seamless integration with Coinbase, convenient fiat currency entry, and access to millions of certified users in the Coinbase ecosystem.

Base Development History

On February 23, 2023, Coinbase announced the launch of Base, an Ethereum Layer 2 network based on OP Stack, and established the Base Ecosystem Fund.

In February 2023, Coinbase announced the launch of the Base test network;

On August 9, 2023, Coinbase officially launched the Base Network mainnet;

In August 2023, the MEME coin BALD on the Base chain rose by more than tens of thousands of times, and its market value exceeded 100 million in 2 days, but a large amount of liquidity was withdrawn on the second day, resulting in a sharp drop. There is no doubt that this MEME carnival brought advance exposure to the Base chain;

On August 10, 2023, friend.tech was officially launched on the base chain, and the invitation code was screened on social networks;

In August 2023, Base and Optimism jointly launched a governance and revenue sharing framework, creating a precedent for the Layer2 economic alliance;

2023 On August 31, 2020, the DEX protocol Velodrome launched the Aerodrome fork DEX project on the Base chain; On September 2, 2023, Aerodrome's TVL once reached 200 million US dollars, accounting for 50% of Base's total TVL; In October 2023, friend.tech's TVL exceeded 50 million US dollars, and the total protocol revenue reached 14,000 ETH; On February 23, 2024, the social platform Farcaster Frames began to be used on the Base chain, and Base officially conducted multiple rounds of Grants for Based Frames; In May 2024, Farcaster completed US$150 million in financing, with protocol revenue of US$1.54 million and a total number of users exceeding 45 Ten thousand.

Base Technical Features

Base chain, as an important part of OP Stack adoption, has super advantages in technology. First of all, Base makes full use of Ethereum's security, stability and scalability, and incorporates Coinbase's best practices to ensure that developers can smoothly join the Base chain from Coinbase, Ethereum Layer 1, and other interoperable blockchains.

Base adheres to the principles of decentralization and openness and welcomes all visionary creators. It is built on Optimism's open source OP Stack, ensuring an environment that is permissionless and inclusive of innovation. Base provides EVM-compatible services at a very low cost, uses a simple API to set up fee transactions for decentralized applications for account abstraction, and uses easy-to-use bridges to securely build multi-chain applications.

Not only that, Base and Optimism jointly launched a governance and revenue sharing framework:

2.5% of the Base sequencer's gross revenue and 15% of the Base chain sequencer's net revenue (L2 transaction revenue minus L1 data submission costs), the larger amount will belong to the Collective.

The Optimism Foundation also provides Base with the opportunity to earn up to approximately 118 million OP tokens in the next six years.

Secondly, backed by the strong support of Coinbace, based on the AA wallet's use of account abstraction, it is expected that the wallet will increase the accessibility of on-chain transactions to new adopters and provide more users with a convenient way to trade on the chain. Base perfectly integrates with Coinbase's products, users, and tools, giving developers access to the Coinbase ecosystem of more than 110 million verified users and $80 billion in assets. This integration not only enhances the user experience, but also accelerates the widespread adoption of blockchain.

Crazy absorption of funds, continuous growth of on-chain data

Without the expectation of issuing coins, the Base chain has become a highly competitive network in the Layer2 field. L2BEAT data shows that the market share of the Base chain has reached 16.08% (data as of June 5), with only a small gap of 0.42% from OP Mainnet's 16.50%. In addition, an important indicator for measuring the value of a chain is the total value locked (TVL). At present, Base TVL has reached 7.6 billion US dollars, ranking third in Layer2, with a year-on-year increase of 6.56%.

According to DefiLama data, the most significant growth occurred between mid-March and April, when TVL increased from US$695 million to US$1.66 billion, an increase of 138.85%. Currently, TVL remains at around US$1.7 billion.

Data shows that Base's daily transaction volume is $313 million. Although it is less than Arbitrum's $431 million and Solana's $1.026 billion, it is a dark horse for a new chain that has been online for less than a year.

In addition, the number of users is one of the best indicators to measure the popularity and adoption of a network. From the perspective of user scale, the Base network relies on Coinbase's huge user base of 110 million, and has gradually accumulated a large number of active users after going online.

According to BaseScan data, the total number of wallet addresses on the Base chain has reached 10.39 million (as of 2024/06/04), and the number of 24-hour active wallet addresses has reached 270,000.

It is particularly worth mentioning that the number of new users, active users and transactions of the Base chain hit new highs in mid-to-late March. A large part of this was due to the MEME craze at the time. After Base integrated EIP-4844 (March 14), the transaction fee dropped significantly. On March 30, Sartoshi, the founder of the NFT project Mfers, announced on X that he would issue his own meme token mfercoin on the Base chain, causing a miracle of 100 times the price in 6 hours.

Base ecosystem has significant wealth effect

According to incomplete statistics, the number of Base ecosystem projects has exceeded 300, with a relatively complete scale, covering basic settings such as cross-chain bridges, wallets, oracles, node providers, and financial products such as DEX, lending, aggregators, derivatives, as well as unique MEME and Social native narratives, giving birth to a unique Base ecosystem.

In the Total Value Locked tracking, it is not difficult to find that there have been two obvious growth anomalies on the Base chain. The first increase was in September 2023, driven by the social growth driven by the outbreak of Friend.tech and the attractiveness of DEX based on Aerodrome. The second increase occurred in mid-to-late March 2024. Farcaster continued to grow, gas fees were reduced after the Cancun upgrade, and MEME was prevalent. The on-chain liquidity has achieved a huge outbreak, further promoting the growth of TVL.

Among them, the layout of Paradigm, the two major social protocols, Frend.tech and Farcaster, is also a key factor in the social fission and market dissemination. As a top institution in the crypto circle, Paradigm is good at designing various financial mechanisms and hyping market sentiment. It has participated in the new NFT trading market Blur and Bitcoin pledge protocol Babylon.

Social Protocol Kingdom

If the explosion of Friend.tech in 2023 only made the Base chain stand out, then in 2024, the super social giant Farcaster's discontinuous social data, 150 million financing and VC betting, and Vitalik's strong push, its explosion also made the Base chain in the SocialFi track, far ahead of the others.

According to the Base website, the proportion and attractiveness of social networking account for more market share than other public chains. On the one hand, it is the financialization of the attention economy, and on the other hand, it is the unique social environment support. As the saying goes, "your network is your net worth", the social networking on the Base chain has achieved mass adoption.

Next, LBank Research Institute will take a detailed inventory of the popular social networking on the Base chain, which is only for reference, not as investment advice.

Farcaster, a social newcomer and a VC-heavy community

Farcaster is the "leader" of social products in the current crypto market, with a valuation of $1 billion and a cumulative financing of $180 million. It has won praise from Vitalik Buterin and strong support from top VCs a16z and Paradigm. As Variant said: The Farcaster community is like a microcosm of the early crypto community that I (Jesse) joined ten years ago: optimistic, technical, ambitious, collaborative and always online.

Many factors such as huge financing and airdrop expectations have prompted Farcaster to gain a lot of market attention in the early days of its launch. Later, with the promotion of Frames' functions and the meme craze, Farcaster's total number of users reached 460,000 and the total protocol revenue reached 1.65 million US dollars.

For ordinary users, Farcaster is an emerging but fast-growing protocol that aims to build a "fully decentralized social network." Compared with traditional social media, one of its notable features is its high-quality and low-noise community atmosphere. As an important part of the Base ecosystem, many products have been derived from Farcaster's open protocol, such as the creator platform Paragraph, the content financialization client Jam, the community task platform Bountycaster, the developer tool Neynar, etc., which are largely due to the realization of Frames functions.

The Fallen Aristocrat Friend.tech

Friend.tech is a decentralized social application based on the Base chain, which combines fan economy and on-chain gaming. Similar to the web3 knowledge planet, it links asset issuance and social influence. Users purchase token "KEY" to enter a specific room to browse content. As the number of purchases increases at any time, the value of Key will be pushed up.

Within half a year after its launch, it became popular with niche and invitation code hunger marketing, but due to its high handling fee, excessive speculation, long loading time, lag, untimely data update and other product experience problems, as well as high pumping and Bot seriously damaged users, its TVL dropped from a high of 50 million US dollars to around 10 million US dollars.

MEME New Pet Paradise

As the most controversial and popular sector in 2024, MEME has undoubtedly continued the market heat. Among them, the outbreak of MEME is also the behind-the-scenes promoter for Solana and Base chain to quickly stand out from a number of networks. BASE, as an emerging network backed by COINBASE, provides an ideal hype environment for MEME enthusiasts by seamlessly connecting to Ethereum's huge infrastructure and user base. This feature has quickly made BASE a new favorite of MEME enthusiasts.

Next, LBank Research Institute will take a detailed inventory of the popular MEME on the Base chain, which is only for reference and not as an investment advice.

TYBG

TYBG is called the MEME center of the Base chain. It is a MEME coin issued by The Based Institute, a research institute funded and led by Jesse Pollak in his personal capacity, which aims to support the development of optimistic, rich and Based-specific culture in the Base ecological economy through research.

The current price of TYBG is 0.0002448 USDT, with a market value of 30.18 million US dollars, a market value ranking of #928, and a maximum increase of 10767.8%.

BRETT

BRETT is inspired by the character Brett in the "Boys Club" comics and is also a close friend of PEPE, one of the most important cultural icons in the cryptocurrency world. Brett's character is known for his laid-back attitude and love of video games, which resonates with fans all over the world. BRETT abandons contracts and lacks minting functions, making the token completely community-driven, and the creator cannot create more tokens or manipulate token contracts.

The current BRETT price is 0.1394 USDT, with a market value of 1.363 billion US dollars, ranking #81 in market value, and the highest increase is 16207.8%.

DEGEN

It was initially airdropped to the Degen community of Farcaster, and will continue to be airdropped to Base and other participants in the Farcaster ecosystem in the future. It is currently mainly used for social payments on the Base chain.

The current price of DEGEN is 0.02444USDT, with a market value of 304 million US dollars, ranking #243 in market value, and the highest increase is 109003.7%.

Toshi

TOSHI is a Meme coin with "cat" as the animal. It is named after the cat of Brian Armstrong, the founder of Coinbase, and aims to build the largest cat community on the Base chain.

The current price of Toshi is 0.0004311USDT, with a market value of 183 million US dollars, ranking #330 in market value, and the highest increase is 2308626.5%.

Summary

From a compliant exchange in the United States to a disruptor in the encryption ecosystem, the Base chain has opened up another new attempt to make trading platforms profitable. In the first quarter financial report, the performance was extremely impressive, with net income of 1.6 billion US dollars, a year-on-year increase of 116%, far exceeding Wall Street expectations. Among them, the TVL growth rate of the Base chain in the first quarter of 2024 reached 165.14%.

In the evolving cryptocurrency landscape, Base has become a beacon of hope. Its seamless integration with AA Wallet launched by Coinbase and its significant growth indicators driven by the explosive growth of memecoin herald a new era of attention for Base in the crypto space.

As Jesse Pollak said, "stay Based, stay onchain", with the advantages of high performance and low gas of the super chain OP Stack, the Base chain has gradually built a narrative culture ecology with Coinbase characteristics, mainly based on social and MEME. On this soil, with the support of Coinbase's hundreds of millions of users and regulatory compliance advantages, the Base chain is still in its early stages. It is believed that with the arrival of ETHETF and the growth of active indicators on the Layer2 chain, Base is expected to follow the ecosystem after Arbitrum, Optimism and Solana, and finally achieve the goal of mass adoption.