Base publicly launched its mainnet just over two months ago, and the launch was phenomenal. Despite the bear market, it showed exponential growth in just over two weeks. Now that the hype around Base has died down, it’s time to examine the state of the network.
Let’s explore the key metrics of the blockchain’s performance and discover the reasons behind its popularity.
Key learning points:
- Base received a lot of attention from the community immediately after its public launch.
- For some time this led to an exponential growth in the number of users and transactions.
- One of the key elements of Base’s popularity is its strong ecosystem and promotional campaigns.
- More Layer 2 blockchains are expected to be launched in 2024, increasing competition in the sector.
What is basic?
Base is an Ethereum layer 2 blockchain developed by Coinbase, a leading crypto exchange. It is one of the most recently launched Optimistic rollups compatible with the Ethereum Virtual Machine (EVM).
Base focuses on offering advanced features such as Account Abstraction (ERC-4337) and low costs. The goal is to become a “Superchain” that prioritizes a secure and innovative environment for developers and users in the blockchain space.
Record-breaking blockchain
The basic public mainnet went live on August 9, 2023. Shortly after launch, it attracted a lot of attention from the community and builders, positioning itself as a leading Layer 2 network.
Although applications on Ethereum still enjoy high popularity and face limited competition from other ecosystems, Layer 2 networks effortlessly attract users. Base stands out for its affordable and fast transactions, along with its strong EVM compatibility. Developers were able to port their applications quickly, contributing to the rapid growth of the blockchain’s user base.
Transactions
Historically, only Arbitrum and zkSync Era have shown transaction counts over 1 million. However, in less than two weeks after launch, Base has also surpassed that level and is aiming for even higher numbers, above 1.5 million.
For a brief period, Base became the leader in daily transactions, even surpassing the very popular zkSync Era. However, it is important to note that the number of transactions on zkSync Era remains consistently at the same level every day, which raises some suspicions. The activity on zkSync may be largely driven by sybil accounts expecting an airdrop, while Base’s activity is more of a temporary rise in popularity.
Daily active addresses
Despite the high number of transactions, Base did not hold a leading position in terms of the number of active addresses on the network. The network maintained a stable 5th place, roughly on par with Optimism. It is worth noting that Base significantly outperformed the number of users of previously launched platforms such as Linea, Mantle and Polygon zkEVM.
In just over 2 months, Base has surpassed Optimism and Arbitrum in total accounts created. However, it still lags behind Ethereum by a significant amount. The native application, friend.tech, has played a key role in this achievement and has not only attracted the attention of web3 users. However, it is important to consider the possibility of a significant number of bots and sybil accounts within this application.
Friend.tech remains the most popular app on Base. It is comparable to GMX on Arbitrum in early 2023. Stargate ranks second among 30-day active dApp users on Base, followed by other projects with a huge gap.
It is worth noting that Uniswap V3 has surpassed the first base-native DEXs, BaseSwap and SwapBased. It has also surpassed Aerodrome, the leading DEX on Base by TVL (Total Value Locked).
Total value locked
In just under a month since launching its public mainnet, Base has surpassed $400 million in total value locked (TVL), earning a spot in TVL’s Top 10 blockchains. This achievement was largely due to the launch of its own DEX Aerodrome (a spin-off of Velodrome) and the success of friend.tech. However, recently the resources have also been flowing to other projects, creating a more balanced distribution.
Aerodrome enfriend.tech are leading in Total Value Locked (TVL), followed by other projects. TVL’s distribution under dApps on Base includes many different projects, indicating significant interest in the ecosystem from the community.
Basic native dApps
Onchain Summer and friend.tech have undoubtedly made an important contribution to Base’s popularity.
Onchain Summer is a promotional project launched by Base to increase the adoption of native applications and the blockchain itself. As part of this promotion, users had the opportunity to mine NFTs from Base’s partners and get familiar with the Base ecosystem.
However, the real breakthrough in the Base ecosystem came from friend.tech. Friend Tech is a SocialFi application that allows users to exchange keys for private chats with X (formerly Twitter) influencers. Given X’s popularity within the crypto community, the app quickly gained the attention of many users. Furthermore, it expanded its reach beyond the web3 community, attracting bloggers from outside the crypto space.
The success offriend.tech went far beyond Base and led to an entire SocialFi trend. Developers began to actively create analogues of this application, and users remembered previous projects. However, the Base ecosystem is not limited to these two campaigns.
In the early days of Base, the memecoin BALD received a lot of attention, with its holders later falling victim to the rag-tag. However, this event demonstrated the enormous interest in blockchain and the web3 community’s loyalty towards Coinbase. It also introduced them to various DEXs on Base.
Coinbase actively invests in the development of the Base ecosystem. Base Ecosystem Fund has previously announced investments in 6 projects that build on this blockchain. We can expect further investments from this fund in the future.
Reasons for Base’s growth
Base is a great example of a successful product launch in a bearish market. The team not only executed a high-profile launch, but also established an extensive ecosystem. A simplified introduction to the ecosystem, along with unique native apps and dedicated time for developers to prepare, undoubtedly contributed to its success.
The performance of the network, especially the price and speed of transactions, has played an important role. This can be attributed to the OP Stack, which is currently a more efficient solution compared to knowledge-free merging. For comparison, below are the costs of sending a transaction in several popular Layer 2 blockchains.
The popularity of numerous new blockchains is often influenced by rumors of airdrops and token launches. In the case of Base, however, the situation is less clear. Currently, the network is operated by Coinbase, which operates under the jurisdiction of the United States. While there are expectations that blockchain management will become more decentralized, it would be challenging for Coinbase to legally issue tokens. Nevertheless, many individuals continue to transact on the network hoping for a retrodrop. However, Base lags significantly behind zkSync Era and StarkNet, which are likely distributing tokens to the community.
Competition between L2s is increasing
Two months after the mainnet launch, activity on Base started to decline. This decline was also observed in other blockchains except Mantle and Linea. However, overall market activity is declining due to increasing uncertainty.
In the future, we expect the launch of more Ethereum Layer 2 networks. However, only a few of them will establish themselves as leaders. Base has already demonstrated its ability to process significant volumes of transactions with over 1.5 million daily transactions and has received positive feedback from users.
Currently, it seems that a strong ecosystem is crucial for successful blockchain launches. Both L2s launched in 2023 (zkSync Era and Base) had unique dApps that attracted a large user base. Arbitrum also had GMX as its main dApp prior to the airdrop. Other blockchains have not reached the same level of popularity, except StarkNet, which has been overrun by sybils expecting an airdrop. This is mainly due to a lack of unique projects. However, their time to shine may still come.
Closing thoughts
Base is a great example of how good branding and investment in ecosystem development can help launch a successful product, even in difficult times. The bear market is a time to build, and the Coinbase team working on Base has taken full advantage of that. They also did a great job launching it.
Base has already established a decent position among Ethereum and others, and will likely maintain that position until the current paradigm shifts to other higher performance blockchains. As other Layer 2 blockchains inevitably launch, Base will face increasing competition. Therefore, it is imperative that the development team introduces new features and continues to attract Tier 1 projects.