A few months ago, Ethereum developers announced that they had shifted their focus from enhancing on-chain scalability to facilitating the development of layer-2 networks. Today, several layer-2s have been launched. Among them is Base. Want to learn more about this layer-2 solution? If so, continue reading this guide.
Exploring Base
Base is a popular Ethereum layer-2 network developed by US-based exchange Coinbase. According to the network’s lead developer, Jesse Pollak, Coinbase intends to use Base to bring millions of people on-chain.
Base uses the optimistic rollups technology to process transactions. This makes it possible for the network to process a huge amount of transactions quickly while blocking any fraudulent activity.
The Base Metrics
As of April 2024, Base has a TVL (Total Value Locked) of over $3.15 billion, the third-largest after Optimism and Arbitrum. In July 2023, the network had a TVL of only $2.20 million. So, the current figure represents a 1,435% increase. The Base TVL is made up of both bridged and natively minted tokens.
Base processes about 24 transactions per second. It has witnessed increased network activity over the last few weeks, thanks to the meme coin craze.
What is Making Base Popular?
Although the primary reason behind Base’s popularity is its affiliation with the Coinbase exchange, several other aspects make the network popular. They include:
Modularity and Rollups
As mentioned, Ethereum seeks to support layer-2 networks, which address its scalability problems. That said, Base has been one of the layer-2s that crypto users believe is offering scaling solutions to Ethereum.
Moreover, as an EVM-compatible network, Base allows Web3 developers to move their decentralized apps from Ethereum to the layer-2 network without changing their smart contracts.
Settling Payments
Coinbase recently announced that it had started facilitating instant payments for customers operating in the crypto space. Using traditional financial institutions to settle payments is usually time-consuming and costly. So, Base, in partnership with USDC, will allow Coinbase to process large transactions for its users across the world.
Low Fees
Most layer-2 networks offer low fees. Base, for example, has an average network fee of $0.04. Ethereum’s Dencum upgrade, which went live in March 2024, promises to lower the gas fees on layer-2s further.
Meme Coin Buzz on Base
Meme coins are among the best-performing cryptocurrencies in 2024. Given the network congestion issues on Solana, Base has been the biggest beneficiary, and that’s evidenced by the growing number of daily transactions.
How Base Chain Works
As stated, Base is an optimistic rollup network. It utilizes the Optimism SDK, which comprises modules across the execution, settlement, and consensus layers that collaborate to form a single blockchain. Optimism SDK recently released the “Bedrock” upgrade, allowing developers on rollup blockchains like Base to modify modules and specify features, such as settlement, execution, and governance.
Base Fees
The Base blockchain processes transactions and then transfers them to the Ethereum network. The benefit here is reduced fees. The fee you pay to transact on Base is divided into three groups:
1. Data availability fee – This is the cost of transferring compressed transaction data to a Data Availability layer.
2. Settlement fee – This fee covers the cost of the proof verification process.
3. Rollup fee – It covers the cost of managing and operating a rollup network.
Base vs. Ethereum
Base differs from Ethereum in various ways. Firstly, Base is a Layer-2 network, while Ethereum is the underlying blockchain, meaning it is a layer-1. Secondly, Ethereum processes roughly 12 transactions per second, while Base can handle twice the figure. Lastly, Ethereum fees are higher than those on Base.
In terms of similarities, Base supports decentralized apps built on Ethereum thanks to its compatibility with the Ethereum Virtual Machine (EVM).
Is Base a Recommended Layer-2 Network?
For crypto users looking to explore the Ethereum ecosystem while incurring low transaction fees, then Base can be an ideal pick. Moreover, more funds have been committed to the layer-2 network, thus allowing easy trading of crypto tokens.
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