All About That Base: Behind Coinbase' Explosive Layer 2
Worldcoin, friend.tech, $BALD - why are projects flocking to Base, the new L2?
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In an era where blockchain technology continues to advance at an unprecedented pace, major centralized exchanges (CEXs) are maneuvering to stay ahead of the curve. The race to capture a share of the onchain market within the Ethereum ecosystem is well underway.
By capitalizing on the network effects of Ethereum and its growing number of Layer-2 (L2) chains, these exchanges are bridging the gap between CEXs and decentralized finance (DeFi). What exactly lies at the heart of this strategic alignment, and who is poised to benefit the most from these initiatives?
CEXs such as Coinbase, Bybit, and Binance have launched L2 chains like Base, Mantle Network, and opBNB within the last few months. By doing so, they look to forge a path that leverages the Ethereum ecosystem’s momentum, liquidity, and users. This alignment not only allows CEXs to tap into a resilient and growing market but also enables CEX users, whether seasoned or new to blockchain, to gain easier access to DeFi applications, creating a synergy between centralized platforms and DeFi.
Thus far, one crucial piece of architecture has been a constant amongst the three newly launched L2s — the OP Stack. Of the three newly minted L2s, one has stood out due to its meteoric rise in total value locked (TVL), users, and fees generated — Base, the new Ethereum L2 chain backed by Coinbase.
In the weeks since its launch, Base has seen a memecoin reach ~$80M market capitalization (before its deployer pulled liquidity) and the emergence of Friend Tech, a viral social app. As of the time of writing, Base has had over $240M in total value bridged since its launch. Its user metrics have also exploded, putting it in contention with market leading L2s Arbitrum and Optimism.
In this week’s report, we dive into its architecture, analyze how value accrual interacts with key players such as Optimism, explore whether this momentum is sustainable, and discuss what it means for Coinbase and others in the ecosystem.