Base Ecosystem Overview

What is Base

Base is a Layer 2 (L2) blockchain on Ethereum, offering low-cost transactions, a simple environment for developers and is built to popularize blockchain technology and attract the next billion users to the on-chain realm.

Base is built in partnership with Optimism on OP Stack, so it is a part of Optimistic Rollups. The blockchain wasincubated by Coinbase, one of the largest cryptocurrency exchanges.

Mainnet Base was launched in August 2023 and since then the blockchain has gained immense popularity among users and developers, recently becoming the largest L2 total value locked (TVL) solution.

Optimistic Rollups

Optimistic Rollups are one of the popular Ethereum scaling solutions in which the core computation and state storage of the network is moved from the on-chain to the off-chain.

Optimistic Rollups perform computation and transaction processing on the off-chain rather than on the main Ethereum network, but then send they data about these transactions to Ethereum.

A key feature of Optimistic Rollups is that multiple transactions are combined into a batch and then sent to Ethereum. This reduces the cost of sending each transaction separately, resulting in significantly lower fees for users. Optimistic Rollups also utilize compression technologies to reduce the amount of data sent to Ethereum.

Optimistic Rollups are called optimistic because of the way they function. All off-chain transactions are considered correct (valid) by default, unless proven otherwise. For batches published on-chain, no proof of validity is provided.

This is one of the key differences between Optimistic Rollups and Zero-Knowledge Rollups, which provide cryptographic validity proofs for off-chain transactions. To prevent fraud, Optimistic Rollups provide everyone with the opportunity to challenge the results of transactions contained in batches. This is done by providing a time interval after they are sent to Ethereum, called the challenge period.

OP Stack

OP Stack is a standardized open source software suite designed to facilitate the creation of L2 solutions for developers, released in October 2022.

OP Stack is the foundation for Superchain, an ecosystem of interoperable Optimistic Rollups built on its software. Several L2 solutions have already been built on OP Stack, the largest of which is Base.

Key Features of Base

• Ethereum security

Base inherits the security of the Ethereum core network, which increases trust in the blockchain and allows Ethereum to be scaled.

• EVM compatibility

Base is fully compatible with Ethereum and other L2 solutions, making it easy for developers to run protocols. It also simplifies interoperability between different networks for users.

• Scalability and low fees

Base allows Ethereum to scale and has more bandwidth while lowering transaction costs.

• Coinbase support

Support for the leading cryptocurrency exchange gives Base access to integrate with Coinbase products and interact with the exchange's 110M+ user base.

• Open-Source

Base aims to be an open-source decentralized solution that operates in the Superchain ecosystem and is easy to usefor users and developers alike.

Base: Key Metrics

Base is the leading L2 solution in terms of daily transactions and active addresses. In 2024, the growth in active addresses on Base was an impressive 1637%.

Over the same timeframe, the average number of daily transactions grew from 2.1M to 42.3M at the peak of activityon the network in October 2024.

This rapid growth in Base's on-chain performance was made possible by the development of the DeFi ecosystem and the use of blockchain to launch and trade meme coins.

Base also leads in another important indicator, network throughput. TPS (transaction per second) in Base is 80.76, which is almost 2 times more than that of the nearest competitor, Taiko (43.3) and almost 7 times more than Ethereum (12.8).

The high TPS indicates the popularity of Base among users and the successful solution of the Ethereum scalability problem with this L2 solution.

Base's revenue for the year was a record $67.08M, which is more than any other L2 blockchain (the closest competitor is Linea with $57.7M). Base's profit for the period amounted to $53.6M with a 77.3% return rate. In terms of absolute value, Base is the leader among L2 solutions, but lags behind several competitors such as StarkNet and Manta Pacificin terms of profit margin.

Base Ecosystem

Base has a well-developed ecosystem including DeFi protocols, SocialFi apps, meme coin launch and trading platforms, and others. The total TVL of the blockchain according to DeFiLlama is $3.6B, an increase of 603% YTD.

The leading protocol in the Base ecosystem is Aerodrome Finance, a decentralized token exchange on Base. Aerodrome Finance copies the functionality and technical base of another popular DEX operating on the Optimism blockchain, the Velodrome Finance.

Innovative mechanics of revenue distribution among liquidity providers and other protocol participants, active role of AERO token in the project's economy, allows Aerodrome to remain the leader of DeFi direction in Base, successfully outperforming market giants such as Uniswap. Aerodrome Finance's TVL is $1.35B, nearly 40% of Base's total TVL.

Moonwell (WELL) is the second largest TVL in the Base ecosystem at $303M. Moonwell is a decentralized lending protocol that allows for making cryptocurrency on-chain loans and earn returns from lending funds to lending pools.

The top five largest projects on Base also include the lending protocols Morpho Blue and AAVE, as well as DEX Uniswap.

Users can get any cryptocurrency for fiat or crypto on SimpleSwap.

Summary

Base is one of the most promising L2 blockchains with a large user base, TVL and a developed ecosystem. Meme coin trading and DeFi activity allow the project to generate substantial revenue.

The support from Coinbase gives Base access to integration with the services of one of the largest crypto exchanges, and increases trust in the blockchain.

The next step for Base could be to establish itself as a leading L2 solution, develop its existing ecosystem of protocols, and introduce new solutions, from DeFi to SocialFi.

The blockchain does not yet have its own token or plans for its release, but there are active rumors in the crypto community about the possibility of a token from Base with airdrop to active users of the network.

Interest in a potential drop is one of the drivers of Base's on-chain performance as users seek to prove themselves as active participants in the blockchain ecosystem. However, there is no indication yet that a token from Base will be launched in the foreseeable future.