TLDR:

Base chain, a star layer2 born with a golden key, has received support from the top U.S. exchange Coinbase. With its focus on Farcaster's SocialFi and the thriving MEME culture, it stands out among many Layer2s and has secured 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 sectors have also gained unprecedented attention. Among them, especially the Base chain in the Layer2 sector, has achieved a TVL of 7.7 billion dollars in just 10 months, thanks to its low-cost, open-source features built on the OP Stack module and the backing of Coinbase. Recent data shows that in May, the Base network's on-chain profit reached 6.98 million dollars, making it the most profitable second-layer network, surpassing networks like Blast and Optimism. This ecosystem has garnered widespread bullish expectations from many crypto enthusiasts and large institutions, showcasing its formidable strength.

Below, LBank will summarize the progress of the Base ecosystem based on its development history, ecological interpretation, and key sector analysis, allowing more users to gain a deep understanding of the highlights of the Base chain in the MEME and SocialFi fields.

~Base Introduction~

Base is a Layer2 scaling solution developed by Coinbase, supported by the OP Stack technology from Optimism. It aims to create a more open, user-friendly, secure, and low-cost trading environment to achieve the goal of scaling the Ethereum network.

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

Base Development History

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 coin BALD on the Base chain surged by tens of thousands of times, reaching a market cap of over 100 million in just two days, but a large amount of liquidity was withdrawn the next day, leading to a sharp decline. Undoubtedly, this MEME frenzy brought significant exposure to the Base chain;

On August 10, 2023, friend.tech officially launched on the Base chain, with invitation codes flooding social networks;

In August 2023, Base and Optimism jointly launched a governance and revenue-sharing framework, pioneering the Layer2 economic alliance;

On August 31, 2023, the DEX protocol Velodrome launched the Aerodrome fork DEX project on the Base chain;

On September 2, 2023, Aerodrome's TVL reached 200 million dollars, accounting for 50% of Base's total TVL;

In October 2023, friend.tech's TVL surpassed 50 million dollars, with total protocol revenue reaching 14,000 ETH;

On February 23, 2024, the social platform Farcaster Frames began using the Base chain, with the Base official providing multiple rounds of grants for Based Frames;

In May 2024, Farcaster completed a 150 million dollar financing, with protocol revenue of 1.54 million dollars and total users exceeding 450,000.

Base Technical Features

As an important part of OP Stack, the Base chain has significant technical advantages. First, Base fully leverages Ethereum's security, stability, and scalability while incorporating Coinbase's best practices to ensure 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, welcoming all visionary creators. It is built on the open-source OP Stack from Optimism, ensuring a permissionless and innovation-friendly environment. Base offers EVM-compatible services at extremely low costs, allowing for fee transactions for decentralized applications through simple APIs and enabling secure multi-chain applications using easy-to-use bridges.

Moreover, Base and Optimism jointly launched a governance and revenue-sharing framework:

2.5% of Base sequencer's total revenue will go to the Collective from the larger of 15% of the sequencer's net revenue on the Base chain (L2 transaction revenue minus L1 data submission costs).

The Optimism Foundation also provides Base with the opportunity to earn up to approximately 11.8 million OP tokens over the next six years.

Secondly, backed by Coinbase's strong support, the AA wallet based on account abstraction is expected to enhance new adopters' accessibility to on-chain transactions, providing more users with convenient on-chain trading methods. The seamless integration of Base with Coinbase's products, users, and tools allows developers to access over 110 million verified users and 80 billion dollars in assets within the Coinbase ecosystem. This integration not only enhances user experience but also accelerates widespread blockchain adoption.

Crazy Fundraising, Continuous Growth of On-Chain Data

Without any expectations of token issuance, the Base chain has still become a highly competitive network in the Layer2 space. According to L2BEAT data, Base's market share has reached 16.08% (as of June 5), with only a 0.42% gap compared to OP Mainnet's 16.50%. Additionally, a key metric for measuring a chain's value is Total Value Locked (TVL), and Base's TVL has now reached 7.6 billion dollars, ranking third among Layer2s, with a year-on-year growth of 6.56%.

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

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

Moreover, the number of users is one of the key indicators to measure a network's popularity and adoption level. From the user scale perspective, the Base network has gradually accumulated a large number of active users after going live, relying on Coinbase's vast user base of 110 million.

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

Notably, the Base chain set new highs in new user numbers, active users, and transaction counts in late March, largely due to the MEME craze at that time, the significant reduction in fees after Base integrated EIP-4844 (on March 14), and the announcement by Sartoshi, the founder of the NFT project Mfers, on X that he would issue his meme token mfercoin on the Base chain, resulting in a miraculous 100-fold surge in just 6 hours.

Significant Wealth Effect in the Base Ecosystem

According to incomplete statistics, the number of projects in the Base ecosystem has exceeded 300, with a relatively complete scale, encompassing foundational setups such as cross-chain bridges, wallets, oracles, and node providers, as well as financial products like DEX, lending, aggregators, and derivatives, along with unique MEME and Social native narratives, nurturing a distinctive Base ecosystem.

In tracking Total Value Locked, it is easy to see two significant growth anomalies on the Base chain. The first increase was driven by the social growth of Friend.tech in September 2023 and the appeal of DEXs centered around Aerodrome. The second increase occurred in late March 2024, with the continuous growth of Farcaster and the reduction of gas fees after the Cancun upgrade, along with the popularity of MEME, leading to a massive explosion of on-chain liquidity, further driving the growth of TVL.

Among them, the social fragmentation and market dissemination of the two major social protocols, Friend.tech and Farcaster, along with the layout of the institution Paradigm, are also key factors. As a top institution in the crypto space, Paradigm excels in designing various financial mechanisms and market sentiment hype, with its involvement in new NFT trading market star Blur and Bitcoin staking protocol Babylon.

Social Protocol Kingdom

If the explosive popularity of Friend.tech in 2023 only allowed the Base chain to emerge, then in 2024, the super social giant Farcaster's disruptive social data, 150 million in financing, and the rush of VCs to back it, along with Vitalik's strong endorsement, have allowed the Base chain to lead the way in the SocialFi sector.

According to the Base website, the proportion and attractiveness of social aspects compared to other public chains occupy a larger market share. Behind this is the financialization of attention economy and the unique social environment support. As the saying goes, "your network is your net worth," social interactions on the Base chain achieve mass adoption.

Next, the LBank Research Institute will detail the popular social applications on the Base chain, for reference only and not as investment advice.

Emerging Social Star, VC-Filled Farcaster

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

Massive financing, airdrop expectations, and other factors have driven Farcaster to gain significant market attention right from its launch. Following the promotion of Frames' functionality and the meme craze, Farcaster's total user count reached 460,000, with total protocol revenue of 1.65 million dollars.

For ordinary users, Farcaster is an emerging but rapidly growing protocol aimed at building a "fully decentralized social network." One of its notable features compared to traditional social media is the high-quality and low-noise community atmosphere. As an important part of the Base ecosystem, many products have emerged from the open protocol of Farcaster, such as the creator platform Paragraph, content financialization client Jam, community task platform Bountycaster, and developer tool Neynar, largely thanks to the implementation of the Frames feature.

Declining Noble Friend.tech

Friend.tech is a decentralized social application based on the Base chain that combines fan economy and on-chain gaming, similar to a web3 knowledge planet, linking asset issuance with social influence. Users enter specific rooms to browse content by purchasing tokens called "KEY," and as the number of purchases increases, the value of the Key will be pushed up.

In the six months following its launch, it gained popularity through niche marketing and invitation code scarcity. However, due to high transaction fees, excessive speculation, slow loading times, lagging, and untimely data updates, along with high extraction rates and bots severely damaging user experience, its TVL has dropped from a peak of 50 million dollars to around 10 million dollars.

MEME New Favorite Paradise

As the most controversial and hottest sector of 2024, MEME undoubtedly continues the market's heat. The explosion of MEME has also been a driving force for Solana and Base chains to quickly stand out among many networks. BASE, as an emerging network backed by COINBASE, provides an ideal hype environment for MEME enthusiasts by seamlessly connecting to Ethereum's vast infrastructure and user base. This feature has made BASE a new favorite among MEME enthusiasts.

Next, the LBank Research Institute will detail the popular MEMEs on the Base chain, for reference only and not as investment advice.

TYBG

TYBG is known as the MEME center of the Base chain, a MEME coin issued by The Based Institute, a research institution funded and led by Jesse Pollak, aimed at supporting the development of optimistic, rich, and Based proprietary culture in the Base ecosystem through research.

Currently, the price of TYBG is 0.0002448 USDT, with a market cap of 30.18 million dollars, ranking #928, and a maximum increase of 10,767.8%.

BRETT

BRETT is inspired by the character Brett from the "Boy's Club" comic and is also one of the most important cultural icons in the cryptocurrency world, a close friend of PEPE. Brett's character is known for its laid-back attitude and love for video games, resonating with fans worldwide. BRETT has abandoned contracts and lacks minting functionality, making the token entirely community-driven, with creators unable to create more tokens or manipulate the token contract.

Currently, the price of BRETT is 0.1394 USDT, with a market cap of 1.363 billion dollars, ranking #81, and a maximum increase of 16,207.8%.

DEGEN

Initially airdropped to the Degen community on Farcaster, it will continue to be airdropped to other participants in the Base and Farcaster ecosystems. It is currently mainly used for social payments on the Base chain.

Currently, the price of DEGEN is 0.02444 USDT, with a market cap of 304 million dollars, ranking #243, and a maximum increase of 109,003.7%.

Toshi

TOSHI is a meme coin featuring "cats" as its animal, named after Brian Armstrong's cat, the founder of Coinbase, 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 183 million dollars, ranking #330, and a maximum increase of 2,308,626.5%.

Conclusion

From a compliant exchange in the U.S. to a disruptor in the crypto ecosystem, the Base chain has opened up a new attempt at profitability for trading platforms. In the first quarter financial report, it performed exceptionally well, achieving a net income of 1.6 billion dollars, a year-on-year increase of 116%, far exceeding Wall Street's expectations, with the Base chain's TVL growth rate reaching 165.14% in the first quarter of 2024.

In the ever-evolving cryptocurrency environment, Base has become a beacon of hope. Its seamless integration with Coinbase's AA wallet and significant growth indicators driven by the explosive growth of memecoins signal that Base has entered a new era of attention in the crypto space.

As Jesse Pollak said, "stay Based, stay onchain." Leveraging the high performance and low gas advantages of the super chain OP Stack, the Base chain is gradually building a narrative cultural ecosystem centered on social and MEME, characteristic of Coinbase. In this fertile ground, backed by 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 the ETH ETF and the growth of active indicators on Layer2 chains, Base is expected to achieve mass adoption after the ecosystems of Arbitrum, Optimism, and Solana.

References:

Exploring the Potential and Risks of Coinbase's Layer 2 Chain Base

https://www.techflowpost.com/article/detail_15071.html

Is BASE's Rise All Due to "On-Chain Marketing"? Exploring the Possibility of "No Airdrop New Public Chains"

https://blockcast.it/2023/10/03/base-chain-whats-so-special-about-coinbases-layer-2/

The Kingdom of Base Social Protocols: Massive Users and Billions of TVL Under Consumer Application Accumulation

https://www.odaily.news/post/5194755

DAU Hits New High Again, What New Developments Are There in "Base's Backyard" Farcaster?

https://www.odaily.news/post/5194390

Exploring the Base Chain Ecosystem: What Other Projects Are Worth Paying Attention to Besides Meme?

https://www.odaily.news/post/5195683