What Is Base Network? Could It Be the “Dark Horse” in the L2 Race?

This article explains Base — the Layer 2 public blockchain launched by Coinbase — how it was created, how its on-chain ecosystem evolved, and whether it could become the new dark horse of the L2 race.

The Birth of the Base Network

In 2023, the most talked-about competition among major institutions was undoubtedly the Layer 2 (L2) race. With crypto giants such as Coinbase and ConsenSys actively joining this competition, 2023 became a breakthrough year for L2 projects. On February 23 of that year, Coinbase launched a Layer 2 testnet called “Base.” The project’s name aligned nicely with the company’s stock ticker symbol, “COIN.”

What truly brought Base into the public spotlight was the launch of the latest MEME token on the network — BALD. BALD surged 600-fold in just one day, and the news spread rapidly across the entire industry. This development drew the attention of many speculators. Although the BALD token pool was removed by the project team within two days — causing significant losses for many speculators — the incident succeeded in making Base widely known. Afterward, everyone began to study the Base blockchain and its ecosystem more closely.

From the very beginning, Coinbase aimed to shape its growth in the crypto world through a four-phase roadmap. Over the past decade, the first three phases of this plan have been carried out:

1. Building protocols: Bringing crypto technology to 1 million people
2. Launching the exchange: Expanding Coinbase Exchange to 10 million users
3. Creating mass-adopted DApps: Making decentralized applications accessible to 100 million users

Now, Coinbase is opening the door to the fourth and final phase:

Building an open financial system and integrating more than one billion users into the global crypto economy through DApps. To achieve this vision, the most logical step is to build the underlying infrastructure itself. At this stage, relying on the EVM (Ethereum Virtual Machine) ecosystem to build a Layer 2 network is considered the optimal solution. And that’s precisely why Coinbase chose to develop the Base blockchain.

Introduction to the Base Blockchain

Base is a public Ethereum Layer 2 (L2) blockchain incubated by Coinbase and developed based on the open-source OP Stack by Optimism (OP) project. Coinbase aims to make Base a highly secure, low-cost, and developer-friendly on-chain ecosystem, while also launching various Coinbase on-chain products within it.

Many people know that Coinbase is a publicly listed U.S. company under full regulatory supervision. Therefore, Coinbase must fully comply with various legal policies, including regulations from the U.S. Securities and Exchange Commission (SEC). This makes it difficult for Base to issue its own token. As a result, Coinbase chose to collaborate with OP — a mature L2 network — to create mutual benefit. Through this strategy, Coinbase can strengthen the OP ecosystem while simultaneously accelerating the growth of the Base blockchain.

About the OP Stack

Base is built on OP Stack technology. Projects using OP Stack benefit from the infrastructure developed by Optimism. By adopting the same technology stack, projects can interconnect seamlessly and become part of a unified superchain ecosystem.

Optimistic Rollup (OR) is a Layer 2 scaling technology adopted by Optimism. It does not require extensive computation or storage and can support various transaction types. Its core principle is this: all transaction records are bundled into a single block, which is later verified using fraud proofs.

The optimistic rollup system assumes all transactions are valid by default; in other words, the burden of proving invalidity lies with the challenger. Hence the term “optimistic.” To prevent abuse, the network must include a large number of on-chain validation nodes. If validation succeeds, the block is added to the blockchain; otherwise, it is reverted.
OP Stack is a modular blockchain software stack introduced by Optimism to support next-generation architectures. Each OP Stack component consists of integrated, reliable modules that serve specific functions. This structure provides developers with flexibility to swap existing modules or create new ones tailored to their needs.

Features of the OP Stack

The OP Stack adheres to three core design principles: efficiency, simplicity, and scalability. It enables extensibility across all L1-above domains, including blockchain explorers, messaging systems, governance tools, and other upper-layer components.

Developers can easily launch any L2 and quickly deploy decentralized applications (DApps). This prevents L2s from evolving as isolated “islands” and instead promotes interoperability.
The official Optimism vision envisions these structures forming into a superchain. Thus, different L2s can operate in an integrated manner within a horizontally scalable blockchain network. Security, communication layers, and development kits are shared across all networks.

As a result, this structure supports Coinbase’s fourth-phase mission: enabling over one billion users to join the crypto economy and creating an environment where thousands of DApps can operate efficiently.

The Superchain architecture is simple, and its future development will revolve around two core principles: modularity and gas fee optimization. This concept aims to provide developers with more flexibility, make DApp deployment easier, and leverage both the scalability and decentralization of public blockchains.

Functionally, the Superchain can be compared to the Apple Store model within the iOS ecosystem. However, the difference is that in a Web3 environment, developers who integrate their DApps into this modular structure gain not only ease of use but also user volume rewards based on transaction activity through Superchain fee sharing. This represents one of the most significant economic model advantages Web3 offers over Web2. Coinbase and Optimism (OP) jointly developed this Superchain model. In the short term, this collaboration aims to unify the OP mainnet, Base, and other L2s into a shared Superchain architecture with common bridging and sequencing infrastructure.

In the future, the inclusion of more L2s into this structure will be inevitable. In the long run, the Superchain could evolve into a large-scale blockchain network that maximizes interoperability, shares decentralized protocols, and maintains a standardized core architecture.

Advantages of the Base Network

As outlined above, Base’s four key advantages can be summarized as follows:

1. Base provides the security and scalability required to support decentralized applications. By leveraging Ethereum’s base security and Coinbase’s industry experience, it enables seamless migration from the Coinbase exchange, Ethereum Layer 1, and other interoperable chains to the Base network.
2. Base offers full EVM compatibility at an extremely low cost. Its developer-friendly structure encourages dApp development. At the abstraction level, developers can adjust gas fees using simple APIs. In addition, multi-chain applications can be securely built through cross-chain bridges.
3. Base aims for a decentralized and permissionless structure. It is an open project for anyone seeking to build a “superchain” in collaboration with Optimism.
4. Coinbase has a large and verified user base managing hundreds of billions of dollars in assets. Base can be seamlessly integrated with Coinbase’s diverse products in the future. In this way, it can serve as a natural bridge between CeFi (centralized finance) and DeFi (decentralized finance), bringing a large user base into the DeFi ecosystem.

The Development Process of the Base Blockchain

• February 23, 2022: Coinbase announced the launch of Base, an Ethereum Layer 2 network, and the establishment of the Base Ecosystem Fund.
• February 27, 2023: Base began its integration with Coinbase’s personal custody and dApp wallet.
• March 26, 2023: The ecosystem fund announced four main support areas: stablecoin projects, reputation platforms, limit order books (LOB), and safer DeFi products.
• April 1, 2023: Base announced that its Layer 2 network would transition to the mainnet in the coming months.
• May 24, 2023: On its official website, Coinbase listed five prerequisites to be met before the Base mainnet launch:
• Regolith hard fork completed on the testnet (completed)
• Infrastructure review with the OP Labs team completed (completed)
• Completion of Optimism’s Bedrock upgrade
• Smooth completion of internal and external audits
• Demonstration of testnet stability
• July 13, 2023: The start of the full mainnet development phase was announced for early August.

The Base Blockchain Team and Coinbase Background

Base was developed by Coinbase, founded in June 2012 by former Airbnb engineer Brian Armstrong, and now one of the world’s largest cryptocurrency exchanges.
Coinbase currently operates in more than 100 countries and regions. Approximately 245,000 ecosystem partners trust Coinbase to invest, spend, store, earn, and use cryptocurrencies quickly, securely, and conveniently.

• Total assets on the platform: $128 billion
• Quarterly trading volume (2023): $92 billion
• Number of employees: Over 3,400
• October 30, 2018: Completed a $300 million Series E funding round with an $8 billion valuation
• April 14, 2021: Coinbase went public on NASDAQ under the ticker symbol COIN

Introduction to the Base Ecosystem

Source: DeFiLlama
As mentioned above, Base’s position among public blockchains is rapidly rising. As of August 20, Base’s Total Value Locked (TVL) reached $176 million, ranking it 12th among all public blockchains. Although this figure still lags behind major Layer 2 (L2) projects — for example, Arbitrum One alone accounts for more than 50% of the total market share — Base is currently the fastest-growing L2 project of the past month.

It may be useful to compare Base with Linea, another recently launched L2 project. Linea was launched about half a month before Base’s mainnet, on July 18. However, its current TVL is less than one-tenth of Base’s. This clearly shows that market attention is focused on Base.

It is true that Base first gained attention through the swap application Leetswap and the viral MEME token BALD. However, the subsequent rise in TVL shows that this interest is not just based on speculation, but also on user confidence in the quality of Base’s infrastructure.
Although only basic infrastructure products such as wallets, explorers, node tools, and data indexers are available so far, most of them are being developed by third-party builders. The number of official on-chain products is still limited. However, as the overall market recovers, the Base ecosystem is expected to grow rapidly and diversify its range of products.

Conclusion: What Is the Source of Base’s Strength?

As a new L2 public chain, Base’s greatest advantage is undoubtedly its backing by the Coinbase ecosystem. Coinbase currently has over 100 million verified users and manages tens of billions of dollars in crypto assets.

Additionally, Coinbase chose to follow an integrated path within the Ethereum ecosystem instead of creating an independent blockchain. This approach allows Coinbase to benefit from Ethereum’s security and network effects while making it easier to direct its existing user base toward Base.

However, it should be noted that Base does not offer significant technological innovation compared to other L2 projects. Furthermore, due to the strict regulatory constraints Coinbase must comply with, it currently seems impossible for Base to issue its own token. This, in turn, deprives Base of a natural token-based incentive mechanism. Nevertheless, this shortcoming is balanced by a deliberate strategy. By collaborating with the OP network, Coinbase chose to distribute incentives directly through the OP ecosystem. This approach contributes to OP while accelerating Base’s growth. A mutually beneficial “win-win” model has therefore emerged.

In conclusion, Base’s future should rely not on hype-driven MEME tokens, but on the original and sustainable applications it fosters within its ecosystem. Base could indeed become the “dark horse” capable of challenging leading L2 projects — but it still has a long way to go.