What is Base, Coinbase’s L2 network?

SUPEREX 2024-01-11
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What is Base, Coinbase’s L2 network?

Base is a secure and low-cost Ethereum layer-2 solution built to scale the user base on-chain. Base was incubated within Coinbase and has plans to progressively decentralize in the years ahead. Despite being founded within a centralized exchange, Base is expected to embrace decentralization, as it is critical to creating an open, global crypto economy that is accessible to everyone.

Base is built on the Bedrock release of the OP Stack, in collaboration with Optimism. Coinbase is joining as one of the core dev teams working on the OP Stack to ensure it’s a public good available to everyone. 

When Ethereum Improvement Proposal (EIP) 4844, which focused on proto-danksharding, was introduced in 2022, Coinbase recognized it as a building block needed to achieve cost savings of up to 100x for Ethereum users. This improvement to the Ethereum blockchain would make the crypto economy on Ethereum more affordable for mainstream users. Coinbase and the OP Stack team have worked closely with the core Ethereum development community over the last year to accelerate EIP-4844.

Why is Base important for the crypto space?

There are several reasons why Base is a compelling choice for developers and users:

Security

Base is secured by Ethereum, which means that it leverages the underlying security of one of the world’s securest blockchain platforms.

Scalability

Base is able to process transactions much faster and cheaper than Ethereum’s layer 1, making it ideal for a wide range of applications, including decentralized finance (DeFi), gaming and nonfungible tokens (NFTs).

Developer-friendly

Base is designed to be easy for developers to build on. It is fully Ethereum Virtual Machine (EVM)-compatible, meaning that developers can deploy their existing Ethereum smart contracts to Base seamlessly.

Access

Base is integrated with Coinbase, making it easy for users to get started with on-chain applications. Users can on-ramp to Base directly from Coinbase, and they can also use their Coinbase Wallet to interact with Base decentralized applications (DApps).

Base architecture

Base is a layer 2 rollup on the Ethereum L1 infrastructure, which means that it bundles transactions together and submits them to the Ethereum chain for settlement. This allows Base to process transactions much faster and more cheaply than Ethereum L1.

Base uses a sequencer to bundle transactions and submit them to the L1. The sequencer is a trusted party that is responsible for ensuring that transactions are executed correctly. Coinbase is currently operating the Base sequencer, but it plans to decentralize this role over time. The lack of centralization of sequencers has been debated heavily by the industry. Therefore, several L2 platforms are looking at decentralizing their sequencers over time. 

Base is also working on a fraud proof system to ensure that transactions are valid. If a user disputes a transaction, the sequencer must provide fraud proof to the L1 network. If the fraud proof is valid, the transaction is reversed. Base is an optimistic rollup that accepts a transaction if more than two thirds of the validators sign off on it. 

The vision for L2-focused ecosystem growth is to create a superchain that has many hubs of ecosystems that operate independently at first. As interoperability across these hubs based on L2s improves, they would effectively form a mesh, or “superchain,” that would help scale Ethereum. The Ethereum blockchain could become a superchain where certain operations happen on specialist L2 platforms and are settled back on the main chain. 

Base advantages

Base offers a number of advantages that make it a compelling choice for developers and users:

  • Full EVM equivalence: Base is fully EVM-compatible, meaning that DApps can be deployed from their existing Ethereum smart contracts to Base without any friction.
  • Low gas fees: Base’s gas fees are significantly lower than Ethereum’s gas fees. This makes Base ideal for a wide range of applications, including DeFi, gaming and NFTs.
  • Fast transaction times: Base’s transaction times are much faster than Ethereum transaction times. This makes Base ideal for applications where users need to interact with the blockchain quickly.
  • Ease of use: Base is integrated with Coinbase, making it easy for users to get started with on-chain applications. Users can on-ramp to Base directly from Coinbase, and they can also use their Coinbase Wallet to interact with Base DApps.

How to get started with Base

To get started with Base, users will need a Coinbase Wallet. Further steps are listed below:

  • Users can create a Coinbase Wallet for free on the Coinbase website or via the mobile app.
  • Once a user has a Coinbase Wallet, they can on-ramp to Base directly from Coinbase. 
  • Once the user moves funds into their Base wallet, they can start interacting with Base DApps.
  • Base DApps details are available on the Base website. 
  • The Base website lists a number of popular Base DApps, such as Aave, Uniswap and OpenSea.

Base ecosystem

The Base ecosystem is still under development, but it is growing rapidly. A number of projects are already being built on Base, including:

Projects building on Base

Thanks to a healthy ecosystem of applications, the total value locked (TVL) on Base has skyrocketed in the last two months. While the TVL in August was at $175 million, September has seen Base become the ninth largest blockchain with a TVL of $370 million.

Base roadmap

Coinbase is committed to making Base the best possible L2 platform for developers and users. The Base roadmap includes a number of important milestones. The L2 ecosystem on Ethereum suffers from centralized sequencers, and that needs to be fixed if Base wants to achieve its goal of global adoption. Coinbase plans to decentralize the sequencer role over time, making it securer and more resistant to censorship.

Coinbase also plans to support more Ethereum features on Base, such as account abstraction and sharding. This will make Base even more scalable on Ethereum and will allow developers to build more innovative and user-friendly applications.

Finally, Coinbase is working to attract more projects to build on Base. The developer community is critical to achieving the network effects needed to grow any blockchain ecosystem. The ultimate goal is to make Base the most vibrant and diverse L2 ecosystem.

Written by Arunkumar Krishnakumar

Categories: Beginner Guide
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