Base Chain Explained: Comprehensive Guide to Its Essentials
Base Chain: The New Face of Blockchains - An In-depth Guide
Base, a Layer-2 solution, is redefining the blockchain landscape, introduced by digital asset powerhouse Coinbase. Already a household name, Coinbase started in 2012 and went public in 2021. Base's unique name, a captivating blend of COIN and the rollup, leaves no doubt about its origin.
Base is an optimistic rollup on the Ethereum network, part of a broader initiative to usher in the next billion users on-chain. In late 2021, a fresh journey began — figuring out how to bring Coinbase on-chain. With most Coinbase business traditionally off-chain, blockchains have faced challenges processing transaction abundance quickly.
Base lays the groundwork to address this issue. Unlike zk (zero knowledge) rollups, which scale by compressing transaction data into a single proof, optimistic rollups only submit proofs for fraudulent activity or incorrect state transitions. Though Base labels as an optimistic rollup, it does not yet have fraud proofs implemented.
So, what makes Base Chain popular?
- Rollups and Modularity: Ethereum's shift in focus from on-chain to off-chain scaling solutions has instigated a 'scaling race' in the blockchain industry. Countless rollups, bridges, and modular blockchains are being developed to scale Ethereum and attract users. Base's draw is EVM compatibility, which makes transition easier for developers and users.
- Settling Payments: Private blockchain networks like Signet (created by Signature Bank) and Silvergate's SEN are transforming payment processing for crypto institutions. Base offers the same benefit to Coinbase customers, making international payments, reducing fees, and expediting settlement times a reality.
- Low Fees: With an average gas fee of about $0.02 for a Uniswap swap, Base Chain fees remain well below Ethereum fees. The Dencun upgrade has further shrunk fees on Base and many other rollups to fractions of a cent.
- Meme Coin Craze: The digital coin culture has played a significant role in Base's ascendancy. Low fees and increased activity, particularly driven by meme coins like Base's own options, have fueled interest and adoption.
Understanding Base Chain: A Step-by-Step Guide
Base Chain is designed to process transactions efficiently on Ethereum, with plans to decentralize in the future. Currently, though decentralization is a work in progress, recent initiatives like community-driven bridges have been implemented to buttress censorship resistance.
Base's TVL exceeds $3.14 billion and is split between natively minted and bridged tokens. USDC, both bridged and natively minted, constitutes the majority of the total TVL. As of this writing, Base processes around 24 transactions per second, a figure that spikes during meme coin frenzies.
In spite of the meme coin craze, Base has standout features that promise a secure and user-friendly blockchain experience.
Next Steps:
Curious about Base's rivalry with other blockchains or how it compares to Ethereum? Let's dive deeper into those topics and separate the best Ethereum L2.
- Competition with Other Blockchains: Notably, Base Chain competes with other Layer-2 solutions like Optimistic Ethereum, Arbitrum, and Polygon, each vying to offer the most efficient and scalable platform for developers and users on Ethereum.
- DAO, Governance, and NFTs: Base Chain fosters a flourishing decentralized autonomous organization (DAO) for governance, permitting the community to play an active role in the platform's development. Additionally, Base supports non-fungible tokens (NFTs), enabling creators to build unique digital assets within the ecosystem.
- Token Economics and Liquidity: Base uses the BASE token for staking, governing, and capturing transaction fees on the platform. Proper tokenomics ensures liquidity within the ecosystem, as users will want to purchase BASE tokens to participate in Base's growing DeFi landscape.
- Smart Contracts and Dapps: The Base Chain network enables the deployment and execution of smart contracts, giving developers the freedom to envision a vast array of dApps, from DeFi applications to gaming platforms on the Base platform.
- Ethereum's Influence: Despite its optimistic rollup nature, many attribute Base Chain's success to its close ties with Ethereum's rich ecosystem. The use of the Ethereum Virtual Machine (EVM) ensures seamless compatibility, and the presence of prominent Ethereum Dapps on Base showcases its capabilities for supporting the Ethereum ecosystem.
- Web3, Crypto Exchanges, and ICOs: Base has partnered with popular crypto exchanges such as Coinbase, providing a smooth path for trading Base-based tokens. Furthermore, Base aims to revolutionize initial coin offerings (ICOs) by offering low-cost, decentralized fundraising solutions and facilitating compliant token sales.
- Brokerage, Scalability, and Throughput: To maintain decentralization while increasing throughput, Base incorporates innovative technology such as Merkle Trees and Merkle Patricia Trees, vital for minimizing communication needs among nodes and enhancing scalability.
- Future-Proof Technology: Ready to accommodate future blockchain developments, Base Chain focuses on implementing the latest technology, including Proof of Stake (PoS) consensus mechanisms and layer-2 scaling solutions, such as zkSync, ensuring its position as a versatile and powerful contender in the blockchain industry. L2beat has highlighted Base's potential, projecting its growth potential among the top layer-2 networks in the near future.
