1. Introduction

Launched by Coinbase, the Base chain has rapidly emerged since its launch in August 2023, becoming the second-largest Layer 2 network and the fifth-largest blockchain network. In just one year, Base has made significant progress in ecosystem development, developer activity, and capital market performance. Recently, driven by the popularity of AI Agents, Base ecosystem projects have shown impressive performance. Additionally, transaction volume and user activity on the Base chain have experienced explosive growth, with the ecosystem diversifying across multiple fields, including NFTs, social, and AI.

This article will start with the background and development history of the Base chain, analyze the performance and dynamics of its ecosystem in detail, review hot projects, and look forward to its future development prospects. By comprehensively analyzing the ecological construction and market performance of the Base chain, this article will present readers with a complete panorama of the Base chain ecosystem.

2. Background and Features of the Base Chain

With the widespread application of the Ethereum network, issues such as transaction congestion and high fees have become increasingly prominent. To address these problems, Layer 2 scaling solutions have emerged. Coinbase announced the launch of the Base chain in February 2022, aiming to enhance Ethereum's scalability and user experience using Layer 2 technology.

2.1 Development History

• February 2022: Coinbase announced the launch of the Base chain and established the Base ecosystem fund to support developers and projects within the ecosystem.

• February 2023: The Base testnet went live, allowing developers to understand its features and characteristics and begin building applications based on Base.

• August 2023: The Base mainnet officially launched, transitioning from the testing phase to full operational status, with technology and ecosystem entering large-scale application.

• January 2024: Base released its 2024 strategy and roadmap, positioning Base as a developer platform and application ecosystem.

2.2 Technical Architecture: Deeply Integrated with Optimism

From the technical selection stage, the Base chain chose to collaborate with Optimism and adopted the OP Stack architecture. Upon the mainnet launch, Base and Optimism announced a governance and revenue-sharing agreement, deeply binding their relationship. Specific details include:

• Governance: Base and Optimism jointly formed a global Security Council responsible for the upgrades and management of both networks. This multi-signature governance mechanism ensures the security and fairness of the network.

• Revenue Sharing: Optimism will pay Base up to 118 million OP tokens over six years, while Base will provide a permanent revenue share to Optimism.

2.3 Strong Support from Coinbase

As one of the largest compliant exchanges in the world, Coinbase provides strong market and technical backing for the Base chain:

• Compliance and Trust: Coinbase has gained the trust of the U.S. Securities and Exchange Commission (SEC), and its platform has a clear advantage in regulatory compliance. This compliance provides a stable foundation for the long-term development of the Base chain.

• Ecosystem Support: Coinbase offers multi-faceted support for quality projects on the Base chain. For example, the liquidity protocol Aerodrome, as a flagship project of the Base chain, received investment support from Coinbase Ventures and was included in Coinbase's listing roadmap.

• Market Influence: Through Coinbase's brand effect, the Base chain has attracted a large number of users and developers, quickly establishing a significant position in the Layer 2 space.

2.4 Features of the Base Chain

• Low Cost and High Efficiency: Base utilizes OP Stack technology to significantly reduce transaction fees and increase transaction throughput, providing users with a more economical trading environment.

• EVM Compatibility: The Base chain supports the Ethereum Virtual Machine (EVM), allowing developers to easily migrate Ethereum-based smart contracts and DApps. This compatibility greatly reduces development difficulty and enhances ecosystem interoperability.

• Strong Scalability: As a Layer 2 solution, the Base chain expands the blockchain's network capacity through Rollup technology, providing a smoother user experience and offering developers broader application scenarios.

• Coinbase's Brand Endorsement: Leveraging Coinbase's strong resources and influence, the Base chain is far ahead of other competitors in terms of funding, technology, and market trust.

• Openness and Decentralization: Base adheres to the principles of openness and decentralization, allowing any developer to freely build and deploy applications on the Base chain. This transparency and flexibility greatly promote innovation and development within the ecosystem.

• Developer-Friendly Experience: Base provides developers with a simple API design, making the deployment and management of smart contracts easier, while also supporting multi-chain interactions to facilitate the construction of cross-chain applications.

3. Performance and Dynamics of the Base Ecosystem

The Base ecosystem has shown excellent performance across multiple key metrics, demonstrating its strong growth momentum.

3.1 Total Value Locked (TVL) on the Chain

As of December 5, 2024, according to DefiLlama data, the total value locked in Base has reached approximately $3.75 billion, a significant increase from $440 million in January 2024. Currently, Base's TVL ranks second only to Arbitrum, making it the second-largest Layer 2 network and the fifth-largest blockchain network.

Source: https://defillama.com/chains

3.2 On-Chain Transactions and User Activity

The daily transaction count and user numbers on the Base chain have shown a continuous upward trend. Particularly after mid-2024, transaction volume and user numbers have accelerated significantly. As of December 5, 2024, the average weekly transaction volume on the Base chain reached 8 million, with an average of 1 million active addresses over the past week, setting a new historical high.

Source: https://dune.com/sixdegree/base-blockchain-overview

3.3 Ecosystem Diversification

The Base chain supports various types of decentralized applications (dApps), currently encompassing 323 dApps in its ecosystem. While DeFi applications dominate, applications in areas such as NFTs, social, and AI are also rapidly growing, reflecting diversity and innovation.

Source: https://www.base.org/ecosystem?utmsource=dotorg\&utmmedium=nav

4. Overview of Hot Projects in the Base Ecosystem

The Base ecosystem covers multiple fields, showcasing strong diversity and innovation. The main types of hot projects include meme culture, artificial intelligence, decentralized exchanges (DEX), and lending platforms.

4.1 Meme Tokens

• BRETT: BRETT is a meme coin inspired by characters from Matt Furie's "Boy's Club" comic series. Since its launch in 2023, the project has rapidly attracted a large number of investors and users, with impressive market performance. As of now, BRETT's market capitalization has surpassed $2 billion, making it one of the most influential meme coins on the Base chain.

• DEGEN: DEGEN is closely integrated with the Farcaster platform, providing users with a novel way to interact. Users can use DEGEN for tipping on social platforms, enhancing its recognition and usage frequency among users. DEGEN currently has a market capitalization of approximately $300 million.

4.2 Artificial Intelligence (AI)

• VIRTUAL: VIRTUAL is the native token of the Virtuals Protocol platform, which allows users to create and manage their own AI agents. Users activate AI agent functions by consuming VIRTUAL tokens. The current market capitalization of VIRTUAL tokens has reached $1.7 billion.

• LUNA: A flagship AI agent launched by Virtuals Protocol, designed to interact with users through virtual personas (Vtubers). LUNA can live stream on platforms like YouTube, engaging with fans in real-time.

• CLANKER: CLANKER is a platform based on the Farcaster social network, aimed at simplifying the token creation process, allowing users to easily deploy their own AI agent tokens. Users can quickly launch tokens by submitting simple requests through Farcaster. CLANKER creates actual revenue for the community through a 40% fee-sharing mechanism, encouraging more users to participate in the token economy.

Source: https://app.virtuals.io/

4.3 Decentralized Exchanges (DEX)

Decentralized exchanges are a crucial pillar of the Base chain, with their strong performance providing a solid foundation for the growth of on-chain locked value and trading volume.

• Aerodrome: Known for its innovative vAMM solution, this platform effectively addresses the liquidity provider (LP) poisoning issue, reducing arbitrage losses by up to 40% compared to traditional AMMs. Its current TVL stands at $1.1 billion, occupying an important position in the Base ecosystem.

• AlienBaseDEX: Through the Epsilon system, this DEX integrates all functions into a seamless interface, enhancing user experience and trading efficiency. The current market capitalization of ALB tokens is $4.65 million.

4.4 Lending Projects

Lending projects have also performed prominently in the Base ecosystem, driving the development of DeFi.

• Moonwell: This platform has significantly improved trading efficiency, growing 80 times this year, becoming an important choice for users seeking loans. The current market capitalization of WELL tokens is $220 million.

• Morpho: Supported by a16z and Coinbase Ventures, this project combines order book efficiency with DeFi flexibility, with its deposit volume surpassing Compound, demonstrating strong market competitiveness. The current market capitalization of MORPHO tokens is $200 million.

Source: https://defillama.com/chain/Base

5. Outlook and Summary of the Base Ecosystem

From SocialFi to DeFi, and from AI to meme culture, the Base chain demonstrates strong development potential across multiple fields. With further growth in cross-chain liquidity and trading volume, the Base chain is expected to challenge Solana and Ethereum, becoming a key leader in the Layer 2 ecosystem.

• Technological Innovation: Built on Optimism's OP Stack, the Base chain is expected to further enhance network performance and security through technological upgrades in the future. These technological advancements will provide developers and users with a better experience, improving the efficiency and security of on-chain transactions.

• Ecosystem Expansion: With the addition of more DeFi, NFT, social, and AI projects, the Base ecosystem will become richer and more diverse, attracting more users and capital, thereby forming a virtuous cycle.

• Community Building: Base encourages developers and users to participate in ecosystem development through events such as hackathons and developer conferences, actively promoting community building. This community vitality not only attracts new developers and projects but also encourages existing users to be more active, enhancing the cohesion of the entire ecosystem.

• Regulatory Environment: As a Layer 2 network launched by Coinbase, Base has advantages in compliance. With changes in the global blockchain regulatory environment, Base is expected to gain more recognition from institutions and users due to its compliance and security, further promoting the development of its ecosystem.

In summary, the Base chain, backed by the industry giant Coinbase, receives strong support for its ecosystem development. Coinbase not only brings a large user base to Base but also enhances market trust through its resources and reputation. Additionally, Base actively engages in interoperability construction with other blockchains to further solidify its leading position in the Layer 2 market. Despite facing fierce competition from other Layer 2 solutions like Arbitrum and Optimism, Base maintains strong growth momentum due to its low cost, high speed, and developer-friendly tools. As the fields of DeFi, AI, and SocialFi continue to expand, the Base ecosystem is expected to thrive, becoming a new model for Layer 2 scaling solutions.