Coinbase's Base Layer-2 Network Hosts $2.8 Billion in DeFi Protocols

Coinbase, a leading crypto exchange, launched Base, an Ethereum layer-2 network, in 2023. The network is designed to serve as a bridge for users into the cryptoeconomy, housing Coinbase's existing on-chain products and providing an open ecosystem for millions of new decentralized apps. Base utilizes optimistic rollups, a technology that batches transactions together for processing, resulting in significantly cheaper and faster transactions compared to those on the Ethereum mainnet, while still utilizing the security of the layer-one blockchain.

Coinbase's primary goal in launching Base is to address the critical issue of onboarding new users and developers to crypto, with the ultimate aim of bringing billions of users to the cryptoeconomy. The company sought to provide developers and users with safer, cheaper, and faster applications and products. Base’s layer-2 blockchain is open source, decentralized, and interoperable, leveraging the transparency of open-source code and acting as a bridge to other major crypto ecosystems. This approach maintains Coinbase's commitment to cutting out unnecessary middlemen.

Ask Aime: What's the impact of Coinbase's Base on Ethereum and the cryptoeconomy?

Unlike many other layer-2 networks, Base does not have a native token. Instead, it uses Ethereum as the gas token to facilitate transactions on the network. coinbase has stated that it has no plans to launch a Base token, despite speculation from crypto users. The company's CEO, Brian Armstrong, confirmed this stance in 2023, and the network has remained committed to this plan. While there are no native token rewards for builders on the chain, Base offers grants and funding opportunities for those bringing users and applications to the layer-2 network.

Base is home to a diverse range of apps and protocols that support on-chain activities across gaming, social, and decentralized finance (DeFi). The network hosts 492 DeFi protocols, with a total value locked (TVL) of over $2.8 billion. Leading DeFi players like Uniswap and AAVE have a significant presence on Base, along with smaller protocols like Moonwell and Pendle. The gaming ecosystem on Base is robust, with the layer-3 network B3 hosting over 117 games and attracting notable Web3 gaming publishers. Additionally, Base supports consumer applications such as decentralized social media protocols, token launchpads, and loyalty programs.

Base stands out as the largest layer-2 network in the cryptoeconomy, hosting nearly $700 million more in TVL than Arbitrum, the next largest layer-2 network. It ranks fifth in daily active addresses over the last year, with more than 1.2 million active addresses daily. The chain also ranks fourth among other layer-2 networks in terms of core developers, trailing Optimism, zkSync Era, and Arbitrum. Base's overarching goal is to bring billions of consumers on-chain, expanding the crypto ecosystem beyond its current set of users. By 2025, the network aims to reach 25 million users, 25,000 developers, and $100 billion in assets on the platform. To achieve these goals, Base is focused on improving the developer experience, promoting its growing suite of products, and reducing onboarding time to less than 60 seconds with its Smart Wallet.