Key Insights:
Base blockchain has reached 11.5 million transactions per day.
It becomes the fastest-growing layer-2 chain and is a little older than a year.
The blockchain has performed well in terms of on-chain TVL and Dapps.
Base is also the home for BlackRock's BUIDL fund.
Layer-2 chains became virtually free after the Dencun Upgrade.
In less than a year, the Base blockchain by Coinbase crossed 11.447 million transactions on a single day, as per the latest data from 26 November 2024. The surge in transactions came after the markets saw a surge in user activity after Donald Trump’s historic win.
Currently, Base is the largest layer-2 blockchain in terms of the total number of daily transactions.
Base is a layer-2 blockchain created by the Coinbase Exchange and serves as a cheap channel for transactions. Secured by the Ethereum layer-1 chain, it provides a high degree of security despite charging a small transaction fee.
Further, Base now seems ripe enough to launch its own token. Being the largest in terms of user activity, its token will face little to no friction in being one of the top 10 by market cap. There are prediction that the Altcoin Season of 2025 could provide the perfect landing ground for a new Base Token.
Let us now examine the factors that have made Base the most desirable layer-2 chain in the Ethereum ecosystem.
The most important factor seems to be the ease at which customers can bridge their assets from Coinbase. Secondly, Base has a large DeFi ecosystem that ensures recurring customers. Finally, we have the technological ease at which users can operate on Base.
The most important factor firing the engines in the Base blockchain is the support from Coinbase Exchange. Being well integrated with it, Base offers ready access to self-custody. Since Base is owned by Coinbase, it allows the latter to be more freely supportive of the self-custody trend, unlike Binance and OKX, which kind of discourage it.
Further, Coinbase's own revenue ensures that they do not need an extra revenue source from Base despite it being a lucrative source. This helps the base cut costs and market itself as a cheap L2, similar to a brand positioning that made the BNB chain one of the largest of its kind.
At present, the Base blockchain has a total value locked of $11.58 billion, which is less than Etheruem but beats almost all other Layer-2s.
One unique aspect of Base that users often overlook is how the blockchain allows the use of ETH to pay for gas. This aspect makes it much easier to transact on the blockchain, as a user does not have to arrange for an additional gas token like ARB or POL to make transactions, saving gas fees spent on buying such tokens.
BlackRock's BUIDL is an institutional liquidity fund (a money market RWA) tokenized on the Base blockchain. It marks the first major RWA investment in its network since the institutional investment in RWA markets.
BUIDL is a USD-denominated tokenized money market fund for corporate investors. Its minimum purchase size is $5 million worth of tokens. Being a tokenized fund (in USD), it may seem a lot similar to a stablecoin but is technically very different. The tokens that
With base, BlackRock aims to tap into the liquidity in the crypto markets and make its money market funds much more efficient than they were in their traditional fintech platforms. Blockchain technology makes it more secure and simplifies such large institutions' audit and monitoring process.
Though layer-2 chains were highly popular due to Ethereum's high fees, they became even more so after the Dencun Upgrade. This was because the upgrade made Ethereum cheaper not only for layer-1 users but also for the layer-2 chains through "Blobs," which are temporary spaces in ETH blocks meant for rollups and batch transactions.
Before introducing the Dencun Upgrade, it typically costs above $50 on Ethereum and around $1 to $5 on layer-2 chains. This changed after the upgrade, when Ethereum fees fell within five dollars, and the layer-2 fee was reduced to a few cents.
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