Crypto 101: What Is The Base Network?

Base is Coinbase's scaling solution. Billed as "a secure, low-cost, builder-friendly Ethereum L2 built to bring the next billion users onchain", the platform has been in the pipeline for many months. It has recently launched its public mainnet, and is making waves—for both the right reasons and the wrong ones.

Ethereum And Coinbase Native

Base is built using the same technology (optimistic rollups) that L2 platform Optimism uses. In fact, the Base devs have become the second core team to work on the open-source OP Stack. A percentage of sequencer revenue (more on this below) will be used to fund future development of this "public good", as they term it.

Base is "EVM equivalent", which means that any code, tools, and infrastructure designed for Ethereum can be deployed on Base without change—while transactions cost a tenth of those on L1. There's no separate network token; gas is paid in ETH.

So far, so good. But Base is also designed to integrate Coinbase's services, playing nice with its products and users. Given Coinbase's tens of millions of customers and $100+ billion managed, this makes perfect sense. The company is leveraging its considerable clout in the industry to launch a new scaling solution that will, almost inevitably, become an overnight success, thanks to its userbase, fiat onramps, network effect, and integrations.

This could be cynically viewed as a way for Coinbase to consolidate its hold on the crypto world, with a scaling solution designed primarily for its own customers. But their use of Optimism has enabled interoperability with other platforms that use OP Stack. The "Superchain Project" connects multiple Optimism-based L2s into a single, near-seamless ecosystem.

That suggests Coinbase is thinking ahead—and beyond the narrow confines of its own ecosystem.

So, what's not to like?

A Troubled Launch

Base's testnet went live in February. Mainnet followed in early August, with an accompanying "On-Chain Summer" promotional campaign, featuring daily NFT drops and other rewards.

However, in the weeks before public mainnet launch, Base opened up to developers. While there was no official Bridge, users with some technical expertise were able to transfer ETH to the platform to check out its features. This had unintended consequences, as new memecoins were created and users deposited ETH to trade them on LeetSwap, Base's native AMM—leading to P&D scams and an exploit of the DEX's liquidity pools that saw 340 ETH stolen.

There are concerns about just how permissionless and open Base really is. There is only one sequencer (the app that validates and executes transactions), raising fears of centralization, interference, and intervention by regulators. Coinbase has claimed that they plan to decentralize Base in the coming years, stating: "We believe that decentralization is critical to creating an open, global cryptoeconomy that is accessible to everyone." However, even months (let alone years) is a long time in Web3, and their commitment doesn't even merit a "SOON" meme.

Base will, doubtless, prove a major player in the L2 space. However, it remains to be seen whether it will be a giant of the Web3 world, or simply another of Web2.

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