When it comes to the development of Layer2, for quite a long time, everyone has been focusing on the competition between the two major technical routes of Optimistic Rollup (Op series) and Zero Knowledge Rollup (Zk series). Based on technical advantages, the market has identified four leading Layer2 solutions, namely: Arbitrum, Optimism, Starknet, and zkSync. With the launch of the mainnet of the "four kings" of Layer2, the circulation of tokens and on-chain data are significantly different. Looking at the development of Base, in just over a year, it has taken over a significant portion of Ethereum's Layer2 on-chain transactions. So, why has Base developed so rapidly? And what are the leading projects in the Base ecosystem worth paying attention to?

Why has Base developed rapidly to occupy half of Layer2

Since late July, the daily transaction volume of the Base network has surged to over 4 million on multiple occasions. On July 27, the Base network set a historical record with a daily transaction volume of 4.32 million. During the same period, Arbitrum had a daily transaction volume of about 1.8 million, while Op Mainnet had only 470,000, and the daily transaction volume of the Ethereum mainnet has mostly remained around 1.1 million for most of this year. According to Defillama data, as of September 24, the transaction volume of Base reached a new peak, reaching 4.44 million transactions. In just over a year since its inception, why has Base developed so rapidly?

Looking at the trend of changes in TVL and user activity data, the on-chain data of the Base network exploded after adopting the Cancun upgrade and the new Blob data format in mid-March this year.

From a data perspective, the growth of Base is closely related to the Ethereum Cancun upgrade. The logic behind this is that the Ethereum Cancun upgrade significantly reduced the transaction fees for Layer2 transactions, greatly improving its performance, which is now on par with many public chains.

However, why is the transaction volume of other mainstream Layer2 solutions only performing moderately? What are the other reasons for the significant increase in on-chain transaction volume on Base?

Some popular products on Base have also successfully driven the continuous surge in transaction volume on Base. Why have some high-quality products and projects emerged on Base? Base regularly launches ecosystem incentive activities such as Onchain Summer. When the Base network was launched in August last year, it started the first phase of the activity, which once led to the outbreak of the social application Friend Tech. This year's Onchain Summer event lasted for 3 months (June-August): the first month mainly focused on the ecosystem hackathon (Buildation) to attract developers; the following two months mainly focused on attracting users and growth. Base's Onchain Summer provided over $2 million worth of 600 ETH in prizes, grants, and points for participating builders and users. According to official information, the event attracted over 7,500 developers, who submitted over 1,250 projects, with about 80 winning projects covering payments, social, games, creator tools, and more.

Behind Base is Coinbase, which not only provides generous bonuses but also, as the first publicly listed cryptocurrency exchange in the United States, can provide user resources and extensive financial resources for Base. According to official information, Base is closely integrated with Coinbase's existing services, allowing users to access Base through the Coinbase platform and enjoy a richer DeFi and Web3 applications. Overall, the support provided by Coinbase for Base is indeed rare in the cryptocurrency market, which is also highly valued by developers.

What are the projects worth paying attention to in the Base ecosystem

The Base ecosystem already has some leading projects, and recently, a batch of projects worth paying attention to have emerged from the Onchain Summer event. According to official information, this hackathon attracted over 7,500 builders to participate, who collectively submitted over 1,250 innovative projects, and ultimately 82 projects stood out after fierce competition. Due to its large scale, the prize pool has been expanded from 200 ETH to 250 ETH.

Farcaster

Farcaster is a decentralized social networking protocol. Farcaster's two founders, Dan and Varun, both held important positions at Coinbase and have rich resources in the cryptocurrency market. In the early testing phase, founder Dan used his personal influence and connections to invite many well-known OGs, including Vitalik Buterin, to join. Farcaster founder Dan also developed a Warpcast application based on the Farcaster protocol, which currently accounts for 90% of the traffic on the Farcaster protocol. The overall architecture of Warpcast is similar to the traditional Web2 social software Twitter, where users can post tweets (casts), comment, retweet, and follow other users. In addition to social media functions similar to Twitter, Warpcast also introduces features such as channels and actions, leading to more interaction methods. In July of this year, Farcaster had over 100,000 daily active users at its peak, and it still maintains 70,000 daily active users. In May of this year, Farcaster's developer, Merkle Manufactory, announced the completion of a new round of financing, led by Paradigm, with a total amount of $150 million, raising the company's valuation to $1 billion.

BasedCoffee

BasedCoffee is a native application of Farcaster used for crowdfunding and social activities, helping creators and builders on Farcaster easily obtain financial support from fans and users. Creators can use it independently or integrate BasedCoffee into the existing Farcaster framework.

Base Token Store

Base Token Store supports the purchase of any token on Base in a one-stop shop manner with a shopping cart. Users only need to activate the smart wallet with a password, add tokens to the shopping cart, and then check out using Coinbase balance. The developers of Base Token Store are currently using CoinGecko to extract meme tokens on Base and are still experimenting with token display methods.

Zap by Paycrest

Zap by Paycrest allows users to seamlessly convert their stablecoins (USDC) into local fiat currency for common purchases and payments. This hackathon focused on the Nigerian Naira (NGN). The operation of Zap is as follows: users create orders through the Zap interface, the Paycrest protocol aggregator indexes the orders and assigns them to one or more supply nodes operated by liquidity providers, and the supply nodes automatically pay the funds to the recipient's local bank account or mobile wallet through a connection with the payment service provider (PSP).

Far-Reach

Far-Reach is a market designed for Shopify merchants, Farcaster influencers (Far-Reachers), and users (shoppers) to connect Shopify merchants with the Farcaster ecosystem. Merchants can select products from the catalog, create marketing or sales campaigns, set rules, and Far-Reachers can register for the latest activities, deploy sales frameworks directly from the application, and earn sales commissions. Shoppers can purchase more products on Farcaster and receive loyalty badges directly in their wallets after completing a purchase.

GamerBoom

GamerBoom is an incentive layer built on mainstream traditional Web2 games, allowing gamers to seamlessly explore and enter the Web3 world. GamerBoom has developed a gamified overlay application integrated with the UI of mainstream Web2 games such as League of Legends, and has introduced a bonding curve mechanism to promote the tokenization and financialization of intangible assets for gamers.

Intelligent

Intelligent is a growth platform designed for brands and creators to track activities across the entire Farcaster ecosystem, understand detailed engagement metrics, and manage loyal audiences and subscribers. Intelligent also serves as a P2P reward and engagement enhancement tool.

JOJO Exchange

JOJO Exchange, developed by DODO co-founder Radar Bear, is currently the leading perpetual contract exchange on the Base chain in terms of trading volume.

Conclusion

There are multiple reasons behind the rapid development of Base. From a technical perspective, it mainly benefits from the Ethereum Cancun upgrade, which significantly reduced transaction fees on Layer2 after the upgrade, resulting in low costs for developers. In addition to technical advantages, the seamless integration of Base with Coinbase's existing services provides a large user base for developers. Combined with generous rewards, developers have flocked to Base, leading to strong application innovation. Although it has not yet broken into the mainstream, it has already attracted a large number of users. The author predicts that although there is currently a large number of user transactions on Base, they may mainly consist of users seeking benefits. How to retain these users remains an area that needs further exploration.

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