Case Study of Coinbase's "Base," a compelling Layer-2 network in 2024
In the world of cryptocurrency, a network called "Layer-2" is built using the networks that are already in place. In comparison to the current networks, it helps to modify the transaction size to enable faster processing times and offers cheaper fees. It also provides a promising solution for the cryptocurrency industry, where intense competition exists for market share. Today, we would like to introduce "Base," Coinbase's layer-2 blockchain network, which gained popularity quickly in a matter of months and is predicted by Messari's report to be one of the most captivating tools in 2024.
What is Base, the layer-2 blockchain network operated by Coinbase?
Coinbase is the company behind Base development. It is a Layer-2 Ethereum network designed to increase user volume, improve online network security, and minimize transaction fees. Its use of user-friendly software systems and applications makes it friendly to both developers and users.
The Bedrock software, on which Base is built, has the ability to increase Layer-2 effectiveness. It was created at Coinbase, a company with a sizable user base and extensive industry experience. Despite having started out as a centralized exchange center, Coinbase's primary objective is to steadily grow its decentralized system network. This is due to the fact that the development of a decentralized system is essential for the crypto economy to become more widely open, recognized, and accessible to all.
Why is Base able to draw in a large number of users and developers and grow into a significant player in the cryptocurrency industry?
- Compared to Layer-1, Base can handle transactions more quickly and with cheaper fees. Thus, it can be used for a wide range of tasks, including NFT, games, and decentralized finance. Blockchain's fast processing system enables users to reply to it promptly.
- Because Base runs on Ethereum, one of the world's most secure blockchain platforms with reliable transaction verification and fraud detection, it offers high security.
- Users can use Coinbase for convenient access to Base, and they can use Coinbase's wallet that is connected to Base. The key advantage for developers is that Base enables them to easily integrate their work with Coinbase's current products and build applications that reach over 110 million Coinbase users.
- Base runs programs and other critical operations on the Ethereum Virtual Machine (EVM). Programmers and developers will find EVM to be user-friendly as it supports multiple programming languages and seamlessly applies or advances Ethereum's current smart contract.
Case Study of Base's Ecosystem: How Base Became a Significant Player in the Crypto Industry
The ecosystem of Base is going through a rapid phase of development. On the network, many industry-leading projects are developed, such as Uniswap, Aave, DeFi Protocol, top gaming platforms, and the largest NFT market, Opensea. Consequently, the ecosystem continues to improve and expand, which raises Base's TVL value over a short period of time. Previously, there was only about 175 million USD worth of TVL in August 2023, when it was ranked as the ninth largest blockchain with about 370 million USD worth of TVL. As of January 2024, it ranks fifth with about 377 million USD in TVL, if the TVL of all Layer-2 networks is the only factor taken into account.
With multiple-component plans, Coinbase concentrates on building Base to become the best Layer-2 platform for users and developers. Initially, Coinbase intends to modify and enhance Node or Sequencer on Layer-2 to make it more decentralized, widely accepted, and accessible to all. It also seeks to prevent any parties from interfering with the working system while guaranteeing security.
Coinbase also plans to support additional Ethereum projects in Base, like account abstraction, and sharding. This will facilitate Base's resizing on Ethereum and assist developers in producing more inventive and user-friendly apps.
The most important objective is to draw projects to be developed on Base to create the most diverse and active Layer-2 ecosystem possible. In order for the blockchain ecosystem to grow, it is essential that a strong developer community and ecosystem are established.