1. Introduction
Launched by Coinbase, the Base chain has rapidly emerged since its launch in August 2023, achieving remarkable growth and currently becoming the second-largest Layer 2 network and the fifth-largest blockchain network. Within just one year, the Base chain has made significant progress in ecosystem development, developer activity, and capital market performance. Recently, driven by the popularity of AI Agents, Base ecosystem projects have shown outstanding performance. Additionally, the trading volume and user activity on the Base chain have also experienced explosive growth, with the ecosystem diversifying across multiple fields such as NFTs, social, and AI.
This article will start with the background and development history of the Base chain, providing a detailed analysis of its ecosystem performance and dynamics, while also reviewing hot projects and looking ahead to its future development prospects. Through a comprehensive analysis of the Base chain's ecosystem construction and market performance, this article will present readers with a complete panorama of the Base chain ecosystem.
2. Overview of the Background and Features of the Base Chain
With the widespread application of the Ethereum network, issues such as transaction congestion and high fees have become increasingly prominent. To address these problems, Layer 2 scaling solutions have emerged. In February 2022, Coinbase announced the launch of the Base chain, aiming to enhance Ethereum's scalability and user experience through Layer 2 technology.
2.1 Development History
February 2022: Coinbase announced the launch of the Base chain and established the Base ecosystem fund to support developers and projects within the ecosystem.
February 2023: The Base testnet went live, allowing developers to understand its features and characteristics and begin building applications based on Base.
August 2023: The Base mainnet officially launched, transitioning from the testing phase to full operational status, with technology and ecosystem entering large-scale application.
January 2024: Base released its 2024 strategy and roadmap, positioning Base as a developer platform and application ecosystem.
2.2 Technical Architecture: Deeply Integrated with Optimism
From the technical selection stage, the Base chain chose to collaborate with Optimism and adopted the OP Stack architecture. At the mainnet launch, Base and Optimism announced a governance and revenue-sharing agreement, deeply binding their relationship. Specific details include:
Governance: Base and Optimism jointly formed a global Security Council responsible for the upgrades and management of both networks. This multi-signature governance mechanism ensures the security and fairness of the network.
Revenue Sharing: Optimism will pay Base up to 118 million OP tokens over six years, while Base will provide a permanent revenue share to Optimism.
2.3 Strong Support from Coinbase
As one of the largest compliant exchanges globally, Coinbase provides strong market and technical backing for the Base chain:
Compliance and Trust: Coinbase has gained the trust of the U.S. Securities and Exchange Commission (SEC), with its platform having significant advantages in regulatory compliance. This compliance provides a stable foundation for the long-term development of the Base chain.
Ecosystem Support: Coinbase offers various support for high-quality projects on the Base chain. For example, the liquidity protocol Aerodrome, as a star project on the Base chain, received investment support from Coinbase Ventures and was included in Coinbase's listing roadmap.
Market Influence: Through Coinbase's brand effect, the Base chain has attracted a large number of users and developers, quickly establishing a significant position in the Layer 2 space.
2.4 Features of the Base Chain
Low Cost and High Efficiency: Base utilizes OP Stack technology to significantly reduce transaction fees and increase transaction throughput, providing users with a more economical trading environment.
EVM Compatibility: The Base chain supports the Ethereum Virtual Machine (EVM), allowing developers to easily migrate Ethereum-based smart contracts and DApps. This compatibility greatly reduces development difficulty and enhances ecosystem interoperability.
Strong Scalability: As a Layer 2 solution, the Base chain expands the blockchain's network capacity through Rollup technology, providing a smoother user experience and offering developers broader application scenarios.
Coinbase's Brand Endorsement: Leveraging Coinbase's strong resources and influence, the Base chain is far ahead of other competitors in terms of funding, technology, and market trust.
Open Source and Decentralization: Base adheres to the principles of open source and decentralization, allowing any developer to freely build and deploy applications on the Base chain, greatly promoting innovation and development within the ecosystem.
Developer-Friendly Experience: Base provides developers with a simple API design, making the deployment and management of smart contracts easier, while also supporting multi-chain interactions to facilitate the construction of cross-chain applications.
3. Performance and Dynamics of the Base Ecosystem
The Base ecosystem has shown excellent performance across multiple key indicators, demonstrating its strong growth momentum.
3.1 Total Value Locked (TVL) on the Chain
As of December 5, 2024, according to DefiLlama data, the total locked value of Base has reached approximately $3.75 billion, a significant increase from $440 million in January 2024. Currently, Base's TVL is second only to Arbitrum, making it the second-largest Layer 2 network and the fifth-largest blockchain network.
Source: https://defillama.com/chains
3.2 On-Chain Transactions and User Activity
The daily transaction volume and user count on the Base chain have shown a continuous upward trend. Particularly after mid-2024, there has been a noticeable acceleration in transaction volume and user numbers. As of December 5, 2024, the seven-day average transaction volume on the Base chain reached 8 million, with a seven-day average of active addresses at 1 million, setting a historical high.
Source: https://dune.com/sixdegree/base-blockchain-overview
3.3 Ecosystem Diversification
The Base chain supports various types of decentralized applications (dApps), with its ecosystem currently containing 323 dApps. Although DeFi applications dominate, applications in areas such as NFTs, social, and AI are also rapidly growing, reflecting diversity and innovation.
Source: https://www.base.org/ecosystem?utmsource=dotorg&utmmedium=nav
4. Review of Hot Projects in the Base Ecosystem
The Base ecosystem encompasses multiple fields, showcasing strong diversity and innovation. The main types of hot projects include meme culture, artificial intelligence, decentralized exchanges (DEX), and lending platforms.
4.1 Meme Tokens
BRETT: BRETT is a meme coin inspired by characters from Matt Furie's "Boy's Club" comic series. Since its launch in 2023, the project has quickly attracted a large number of investors and users, with impressive market performance. As of now, BRETT's market capitalization has surpassed $2 billion, making it one of the most influential meme coins on the Base chain.
DEGEN: DEGEN is closely integrated with the Farcaster platform, providing users with a novel way to interact. Users can use DEGEN for tipping on social platforms, enhancing its recognition and usage frequency among users. DEGEN currently has a market capitalization of approximately $300 million.
4.2 Artificial Intelligence (AI)
VIRTUAL: VIRTUAL is the native token on the Virtuals Protocol platform, which allows users to create and manage their own AI agents. Users activate AI agent functions by consuming VIRTUAL tokens. The current market capitalization of VIRTUAL tokens has reached $1.7 billion.
LUNA: A flagship AI agent launched by Virtuals Protocol, designed to interact with users through virtual personas (Vtubers). LUNA can live stream on platforms like YouTube, engaging with fans in real-time.
CLANKER: CLANKER is a platform based on the Farcaster social network, aimed at simplifying the token creation process, allowing users to easily deploy their own AI agent tokens. Users can quickly launch tokens by submitting simple requests through Farcaster. CLANKER creates actual revenue for the community through a 40% fee-sharing mechanism, encouraging more users to participate in the token economy.
Source: https://app.virtuals.io/
4.3 Decentralized Exchanges (DEX)
Decentralized exchanges are an important pillar of the Base chain, and their strong performance provides a solid foundation for the growth of on-chain locked value and trading volume.
Aerodrome: Known for its innovative vAMM solution, this platform effectively addresses the liquidity provider (LP) poisoning issue, reducing arbitrage losses by up to 40% compared to traditional AMMs. The current TVL has reached $1.1 billion, occupying an important position in the Base ecosystem.
AlienBaseDEX: Through the Epsilon system, this DEX integrates all functions into a seamless interface, enhancing user experience and trading efficiency. The current market capitalization of the ALB token is $4.65 million.
4.4 Lending & Borrowing Projects
Lending projects have also performed prominently in the Base ecosystem, driving the development of DeFi.
Moonwell: This platform has significantly improved trading efficiency, growing 80 times this year, becoming an important choice for users to borrow. The current market capitalization of the WELL token is $220 million.
Morpho: Supported by a16z and Coinbase Ventures, this project combines order book efficiency with DeFi flexibility, with its deposit volume surpassing Compound, demonstrating strong market competitiveness. The current market capitalization of the MORPHO token is $200 million.
Source: https://defillama.com/chain/Base
5. Outlook and Summary of the Base Ecosystem
From SocialFi to DeFi, and to AI and meme culture, the Base chain demonstrates strong development potential across multiple fields. With further growth in cross-chain liquidity and trading volume, the Base chain is expected to challenge Solana and Ethereum, becoming a significant leader in the Layer 2 ecosystem.
Technological Innovation: Built on Optimism's OP Stack, the Base chain is expected to further enhance network performance and security through technological upgrades in the future. These technological advancements will provide developers and users with a better experience, enhancing the efficiency and security of on-chain transactions.
Ecosystem Expansion: With the addition of more DeFi, NFT, social, and AI projects, the Base ecosystem will become richer and more diverse, attracting more users and capital participation, thus forming a virtuous cycle.
Community Building: Base encourages developers and users to participate in ecosystem development through events such as hackathons and developer conferences, actively promoting community building. This community vitality not only attracts new developers and projects but also encourages existing users to be more active, thereby enhancing the cohesion of the entire ecosystem.
Regulatory Environment: As a Layer 2 network launched by Coinbase, Base has advantages in compliance. With the changing global blockchain regulatory environment, Base is expected to gain more recognition from institutions and users due to its compliance and security, further promoting the development of its ecosystem.
In summary, the Base chain, backed by the industry giant Coinbase, provides strong support for the development of its ecosystem. Coinbase not only brings a large user base to Base but also enhances market trust through its resources and reputation. Additionally, Base actively engages in interoperability construction with other blockchains to further solidify its leading position in the Layer 2 market. Despite facing fierce competition from other Layer 2 solutions like Arbitrum and Optimism, Base maintains strong growth momentum due to its low cost, high speed, and developer-friendly tools. As the fields of DeFi, AI, and SocialFi continue to expand, the Base ecosystem is expected to thrive and become a new model for Layer 2 scaling solutions.
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