TVL breaks 500 million USD, and may issue new tokens. What other participation opportunities are there in the popular Base chain?

Author: Xiyou, ChainCatcher

Since Coinbase officially announced the launch of the Base mainnet on August 9, just one month has passed, and the value of locked crypto assets on Base has already exceeded $500 million, making it the third-largest Layer 2.

According to L2Beat data, as of September 22, the TVL of the Base chain is approximately $530 million, with a market share of 5%, ranking third among many Layer 2 networks, only behind Arbitrum and Op Mainnet, and surpassing zkSync Era. According to DeFiLlama data, Base's TVL has surpassed that of Layer 1 public chain Solana, ranking ninth in the entire public chain market.

In addition, according to Basescan, the total number of participating addresses on the Base chain has reached 22.85 million, far exceeding Arbitrum (12.5 million) and Op Mainnet (12.7 million).

Whether measured by the amount of locked assets or the number of participating user addresses, Base has become the most active network in the current public chain market, even under the previous clear statement from Coinbase that it would not issue tokens. However, there have been new discussions about whether Base will issue tokens. On September 22, Decrypt reported that Coinbase's Chief Legal Officer Paul Grewal responded during an interview at the Messari Summit regarding "whether Base will have a token," stating, "We have not completely ruled out this possibility, and believe that a token may be feasible at some point in the future. However, we are not currently focusing on the economics and tokenization of the protocol, and regulatory clarity is also very important.

So, why has Base achieved such outstanding results in just one month since its launch? What are the secrets behind its explosive growth? What opportunities are there for ordinary users to participate?

From the thousandfold coin BALD to the social application Friend.tech, what is driving the surge of Base users?

Base made its first public appearance in February this year. As a Layer 2 network built on OP Stack and incubated by Coinbase, it has attracted significant attention from the crypto industry since its inception. With the dual resources of the Coinbase exchange and the leading Layer 2 network Optimism, the Base network quickly became a rising star project in Layer 2. After the mainnet officially launched in August, the ecological development of Base has lived up to expectations, giving birth to one hot project after another on-chain, from the early thousandfold coin BALD to the now-popular social application Friend.tech.

According to the ecological development tracking account Base Daily, currently, there are over 300 projects or DApps deployed in the Base ecosystem, covering infrastructure such as developer tools, wallets, oracles, cross-chain bridges, as well as applications in DeFi, social, gaming, NFT, and DAO. Among them, well-known projects like Uniswap, Curve, Sushi, and Opensea have all been deployed on Base.

Additionally, according to BaseScan data, since its launch, the daily transaction volume on the Base chain has repeatedly exceeded that of the Optimism and Arbitrum networks, with September 14 marking a historic high of 1.88 million transactions in a single day.

Compared to the application and user growth of other Layer 1 and Layer 2 networks, Base has managed to catch up with or even surpass most public chain networks just one month after its mainnet launch. Moreover, under the clear statement from Coinbase that Base will not issue tokens and there are no airdrop expectations, how has the Base network attracted so many projects and users to voluntarily flock in?

It is well known that the prosperity of a public chain ecosystem relies on the full cooperation and support of four aspects: "solid technology, blockbuster applications, ecological resource support, and incentive expectations." As a Layer 2 network backed by Coinbase, Base naturally understands this well.

First, in terms of technology and security, Base is built on the open-source tool stack Op Stack of the leading Layer 2 project Optimism, inheriting the security of the Ethereum mainnet, while its transaction speed and throughput far exceed those of Ethereum, and its transaction gas fees are much lower.

In terms of resource support, Base has the dual resources of Coinbase and Optimism's OP Stack. Coinbase, as one of the top five centralized exchanges globally, not only has over a hundred million users but also possesses substantial capital and cash flow, providing Base with a large user base as well as significant financial support.

According to Coinbase founder Brian Armstrong's comments on the launch of Base, he divides the growth of cryptocurrency into four stages: first, developing underlying protocols (Bitcoin, Ethereum); second, establishing exchanges (Coinbase Exchange) as a bridge into digital currencies; third, creating a decentralized application or DApp for the general public (such as Coinbase Wallet, Coinbase's Ethereum staking product cbETH); fourth, building open decentralized applications DApp. The fourth stage is realized through Base, and the Coinbase team views Base as an important step towards achieving an open and free economy, with Base becoming a key deployment site for Coinbase's on-chain products, providing a more open ecosystem support for DApp developers, thus enabling Base to become a seamless entry point for Coinbase users to access a broader crypto economy.

From this perspective, Base plays an important role in Coinbase's development plan, becoming a crucial entry point for Coinbase users to enter the Web3 world. The resources of Coinbase are also empowering the Base network; today, Coinbase is not just an exchange but also offers on-chain staking solutions like cbETH, Coinbase Wallet, stablecoin USDC, crypto asset custody, and other services and products. Base can integrate or build new applications based on these existing Coinbase products, such as the automatic integration of the Base mainnet in the Coinbase Wallet, allowing users to use the Coinbase Wallet without needing to add it themselves; Circle has launched native USDC on the Base network, etc. In the future, excellent project tokens within its ecosystem may also have the opportunity to be listed on the Coinbase platform.

Regarding Optimism, Base will first share the resource support within the Op Stack ecosystem. Additionally, according to the revenue-sharing agreement proposed by the two parties in August, the Optimism Foundation will provide Base with an opportunity to earn $118 million in OP tokens over six years, leading many users to speculate that these OP tokens will be rewarded to the projects and users in the Base ecosystem. In simple terms, Optimism may provide $118 million in OP token incentives to Base ecosystem users; although Base does not issue tokens, users can earn OP tokens.

In terms of incentive expectations, Base has adopted different incentive strategies for ecological users and developers. For developers, on the day Base network was launched, the Base Ecosystem Fund was established to invest in early projects built on Base, combined with dedicated support from the Base team to help projects succeed. On September 8, the Base Ecosystem Fund announced that it had completed investments in six projects within its ecosystem, including: perpetual contract platform Avantis, decentralized limit order book BSX, on-chain custody service Onboard, insurance aggregator OpenCover, on-chain creator platform Paragraph, and on-chain financial oracle Truflation; for users, on the day of the mainnet launch, it launched a month-long on-chain event called "OnChain Summer," featuring related thematic content hosted by 50 of the best builders, brands, products, artists, and creators.

In terms of creating blockbuster ecological projects, Base seems to never lack narratives. Even before the mainnet was officially launched, a meme coin named BALD was born, which saw a price increase of over a thousand times in one day, and within two days, its TVL broke through $100 million, with the liquidity pool exceeding $25 million. Although BALD ultimately ended in a crash, the wealth effect story of BALD opened the door to traffic for Base.

At that time, the Base mainnet was not open to the public, and the operation of the BALD token involved the creators holding a large number of tokens in advance, then pushing up the token price, leading ordinary users to chase the price, after which the creators would take the opportunity to sell, leaving users trapped, which was later humorously referred to as "Piyao盘." Many users speculate that BALD may have just been a pawn, with the real planner possibly being Coinbase, capturing user and market sentiment on the eve of the mainnet launch, bringing heat and attention to the Base chain's success.

Related reading: "After BALD turned into a 'rug pull leader,' can the Base ecosystem recreate the meme craze?"

Although the true behind-the-scenes driver may not be related to Coinbase, the influence of BALD has continued, especially in the early days after the Base mainnet launch, where the Base ecosystem was also dominated by "Piyao盘," with countless rug-pull DEXs and lending protocols. For instance, the initially high-volume DEXs on the Base chain were Leetswap and Rocketswap, both of which experienced security incidents, and the contract deployer of the native lending protocol Magnate Finance was linked to the Solfire scam before it exited.

What truly broke this situation was the emergence of the social application Friend.tech, whose invitation codes flooded major social networks. By tokenizing (tokenizing KEY) users' Twitter accounts for trading, the design mechanism of KEY's price increases exponentially with the number of tokens held by users, rapidly attracting user attention, and it remains one of the most active applications on Base to this day.

From the thousandfold meme coin BALD to the invitation code flooding Friend.tech, the commonality is that they repeatedly tell the story of getting rich on the Base chain, which seems to be the secret Base has mastered to gain user attention and heat. For a nascent public chain, the story of getting rich is the most attractive, and blockbuster applications are enough to make a chain a star or bring it back to life. From BALD to Friend.tech, the Base chain has also completed its stunning transformation from meme Piyao盘 to application innovation. Today, Coinbase's latest response regarding whether Base will issue tokens may open a new growth story for it.

What other opportunities are there in the Base ecosystem?

Currently, the development of the Base chain is still in its early stages. Although the value of locked crypto assets on the chain has exceeded $500 million, in terms of ecological application development, only one DEX platform, Aerodrome, has a TVL exceeding $100 million, while most applications maintain a TVL between one to two million dollars. Compared to the funding scale of applications on other public chains, the ecosystem on the Base chain still has significant room for growth. So, what applications are available for users to participate in on the Base chain? This article will review the representative native applications of Base.

It should be noted that many native projects on the Base chain have exited, and users need to pay attention to fund safety when participating early.

First, let's look at the latest progress of the six projects that received the first round of investment from the Base ecosystem fund.

• Decentralized Derivatives Platform Avantis

Avantis is a perpetual contract platform on the Base network, which has not yet officially launched and is currently in the whitelist application period. Users can apply for the whitelist using their email.

• Limit Order Book Trading Platform BSX

BSX is a decentralized limit order book-style spot and perpetual contract trading platform, similar to centralized exchanges like Binance and Coinbase. Currently, BSX has not officially launched, and users can register as early users using Twitter and email.

• Crypto Asset Custody Platform Onboard

Onboard is a crypto asset custody service and deposit/withdrawal platform, allowing users to deposit and withdraw cryptocurrencies through their own MPC wallets and smart contracts, similar to how we use WeChat Wallet, Alipay, and UnionPay to aggregate our on-chain assets for P2P trading.

• Insurance Aggregator OpenCover

OpenCover is the first L2 insurance aggregator to collaborate with underwriters like Nexus Mutual, aimed at protecting DeFi users from on-chain risks such as smart contract breaches and oracle failures. Users can insure funds stored in DeFi protocols like Uniswap, Aave, and Curve, with weekly coverage starting at $5,000 and insurance fees starting at $1.14.

• On-chain Content Creator Platform Paragraph

Paragraph is an on-chain content creator platform where users can write, publish, and commercialize their content, similar to a decentralized version of a newsletter (creators provide information or content to subscribers via regular emails). On the Paragraph platform, creators can turn posts into collectibles, send newsletters to wallet addresses, and monetize through regular memberships.

• On-chain Financial Data Oracle Truflation

Truflation is an on-chain financial data oracle that compiles financial data from over 18 million entries and more than 40 data sources in real-time, calculating the latest U.S. inflation rate and price indices for various inflation categories such as food or housing, automatically providing daily inflation data reports (i.e., CPI).

What native DEXs, lending, and applications are available on the Base chain?

• Official Cross-Chain Bridge Base Bridge

Base Bridge only supports asset transfers between Base and Ethereum. Additionally, since Base is built on the OP Stacks plugin, users need to wait for 7 days when withdrawing assets from the Base network to Ethereum using the official cross-chain bridge.

If users want instant transactions, they can use third-party cross-chain bridges: Orbiter Finance, Hop Protocol, LayerZero, Synapse, Socket, Stargate, Wormhole, etc.

• Largest DEX Platform Aerodrome

Aerodrome is a fork of the DEX platform Velodrome on the OP mainnet, launched on August 28 on the Base mainnet. Currently, users can trade any native token within the Base ecosystem on the Aerodrome platform, with a TVL of $117 million, making it one of the largest applications by funding scale on the current Base chain.

Aerodrome's token mechanism design is similar to Velodrome, combining the veToken model from Curve and the (3,3) game theory from Olympus DAO to optimize the liquidity incentive emission issues of tokens.

On the Aerodrome platform, there are two tokens: AERO and veAERO. The former, AERO, is an ERC20 utility token with an initial supply of 500 million, which can be allocated to liquidity providers; the latter, veAERO, is a governance token NFT, allowing users to lock AERO to become veAERO and exercise related voting rights.

In addition to Aerodrome, the DEX platforms on the Base chain also include native Baseswap (TVL of $15.5 million), Alien Base (TVL of $7.81 million), DackieSwap, Synthswap (TVL of $4.07 million), Baso Finance, etc. Additionally, it has integrated DEX platforms such as Uniswap, SushiSwap, Balancer, AMM protocol Maverick Protocol, WOOFi, and cross-chain aggregator DODO X.

• Lending Application Sonne Finance

Sonne Finance was originally a lending protocol on the Optimism chain and has now been deployed on Base, supporting DAI, USDC, USDbC (Base's USDC), and WETH asset collateral lending, with a current TVL of $6.61 million.

In the lending sector, Base has launched Compound V3, Aave V3, the lending protocol Moonwell on Moonbeam, and the cross-chain lending protocol Pike Finance. Currently, the largest native lending protocol in the Base sector by TVL is Seamless Protocol, with a TVL of $1.06 million.

• Decentralized Domain Service Provider Base Name Service (BaseNS)

BaseNS is a domain service provider on the Base chain, independently developed and managed, supporting users to register and apply for domains with the ".base" suffix.

• Social Application Friend.tech

Friend.tech was launched on Base on August 10, allowing users to bind their Twitter accounts to tokenize their account (KOL) popularity into shares called Key. Ordinary fan users can become shareholders by purchasing shares issued by KOLs (Key), gaining the right to privately chat with them and view their specific content, and can also buy and sell shares Key for profit.

According to Dune data, as of September 21, the total market value of Friend.tech "Keys" has reached $106 million, with the platform's founder Racer's "Keys" market value accounting for 37.6%. Today, it was announced that the web version has been launched, allowing users to use friend.tech in their browsers.

In addition to Friend.tech, the social sector has also integrated CyberConnect, task platform Galxe, and DAO organization Tally, among others.

Reference reading: "Reviewing Friend.tech's Launch 20 Days Later: Zero Cost Yielding About 2500 ETH, Was the Explosion Pre-planned?"