Base: How Ethereum's Layer 2 solutions are changing the developer ecosystem

Why is Base so popular? The rise of a Layer 2

Base, as a Layer 2 solution built on Ethereum, has quickly gained attention since its launch in August 2023. This project is special not only because it uses Optimism's OP Stack technology, but also because it brings together a large exchange's user base—over 110 million verified users and more than 8 billion dollars in assets. What does this number mean? It means that Base has had a large potential user pool since the day it was born.

As of September 2023, Base has accumulated over 1 million users and a total locked value (TVL) of $385 million, ranking 8th in Layer 2, surpassing even some well-known established public chains.

What is Layer 2? Why does Ethereum need it?

Although the Ethereum mainnet has strong security and a high degree of decentralization, transaction fees and processing speed have always been bottlenecks. Layer 2 is a second-layer protocol built on top of this base chain, which processes a large number of transactions off-chain and then consolidates the data onto the main chain, preserving the security of the main chain while significantly improving efficiency.

Currently, Layer 2 technologies are mainly divided into three categories: state channels (such as Lightning Network), sidechains (such as Loom Network), and rollups. Base uses the Optimistic Rollups technology.

Optimism Overview: How It Works

In simple terms, Optimism packages multiple off-chain transactions into a data packet submitted to the Ethereum main chain. A key mechanism in this process is fraud proof. The system assumes that all transactions are valid but gives network participants a fixed time window (usually one week) to challenge these transactions. If fraud is discovered, malicious actors will be punished, and the transactions will be rolled back.

This design is safer than complete trust but faster than ZK-Rollups that require cryptographic proofs.

The Five Major Application Scenarios of Base

Payment Application - Beam is a payment tool built on Base, allowing users to trade with USDC or project tokens, and it can also cover Gas fees. It even integrates fiat deposit and withdrawal channels.

Token Exchange - Decentralized exchanges like Uniswap, Maverick, and Dackieswap operate on Base, allowing users to quickly and cheaply complete token swaps.

Liquidity Mining - Want to earn a share of trading fees? Just provide liquidity on BaseSwap or Dackieswap.

Cross-Chain Bridge - The Base Bridge official bridge supports most EVM wallets, allowing the transfer of ERC-20 tokens between Ethereum and Base. It takes only a few minutes to transfer from Ethereum to Base, while the reverse process takes about 7 days (due to the waiting period for fraud proof).

DAO Launch - Aragon has launched a no-code DAO creation tool on Base, enabling communities to easily start autonomous organizations.

Advantages of Base: Cost, Ease of Use, Speed

Low Gas Fees - As an optimistic rollup solution, Base significantly reduces transaction costs, which is particularly friendly for micropayments and high-frequency trading applications.

EVM Compatibility - Developers can directly deploy contracts from Ethereum to Base, and existing tools, frameworks, and smart contract ecosystems can be used without rewriting.

True Scalability - Layer 2 increases the transaction throughput per second, solving the congestion issues of the mainnet and providing a better experience for users and developers.

Risks Also Exist: Centralization and Security Risks

However, Base is not perfect. At present, single validator operators hold significant power, which introduces a certain degree of centralization risk. Although there are plans to introduce third-party nodes, concentration remains a concern for now.

The withdrawal period of up to 7 days has also been criticized by some users - this is an inevitable cost of the fraud proof mechanism, but it does affect the liquidity experience.

From a security perspective, the fraud proof mechanism requires continuous monitoring by network participants. If incentives are insufficient or if a data hiding attack occurs, there may be vulnerabilities.

The Truth About Base Token

The official roadmap clearly states that there are currently no plans to issue a Layer 2 native token. But beware—there are always scammers who will fabricate fake “Base Token” airdrops to defraud users. Don't let greed lead to your downfall.

How to connect to the Base network

Using Coinbase Wallet - Click on the network option at the top right corner of the browser extension and select Base from the drop-down menu.

Using MetaMask - Open the extension, click the network switch button at the top, select “Add Network”, manually input the RPC information for Base and save it.

Both methods are very simple and can be completed in a few seconds.

The Position of Base in Layer 2 Competition

Polygon, zkSync, and Arbitrum are also Layer 2 players, each with its own characteristics. Base's advantage lies in its backing by a large exchange's user base and asset scale, making it low-cost for beginners. However, in the long run, centralized risk and the degree of technological innovation will determine its prospects.

Bottom line

Base, as the first public chain launched by a listed company, has taken an important step in attracting traditional financial users into Web3. Its rise is not isolated, but rather a manifestation of the maturity of the entire Layer 2 ecosystem. However popular it may be, users should rationally assess risks and do their homework before participating.