In a significant move that marks Coinbase’s commitment to shaping the future of the crypto space, the leading crypto wallet and exchange unveiled Base on August 9, 2023. Coinbase describes Base as a groundbreaking “bridge” into the cryptoeconomy, aiming to serve as the new home for its on-chain products and create an open ecosystem for countless decentralized applications (dApps). This article delves into the world of Base, exploring its development, features, and the potential it holds for revolutionizing the crypto landscape.

The Genesis of Base

Base is Coinbase’s very own Ethereum Layer-2 (L2) network, designed to usher in a new era of blockchain innovation. It serves as an essential infrastructure, poised to house Coinbase’s existing on-chain products while fostering an expansive, open environment for emerging dApps. To get a better understanding of this innovative endeavor, let’s take a closer look at its development.

Development and Early Enthusiasm

Even during its development stage, Base garnered immense attention and excitement from the crypto community. Jesse Pollak, Coinbase’s Senior Director of Engineering, expressed his enthusiasm about the overwhelming interest in Base before its public launch. In an interview with Decrypt, he highlighted the palpable energy and appetite within the crypto space for what Base could offer.

Base’s Launch and Regulatory Considerations

While Coinbase’s release of Base is undoubtedly a significant stride toward blockchain innovation, it’s important to note that the company currently has no plans to introduce a corresponding native token. This strategic decision may be influenced by a desire to navigate the complex regulatory landscape effectively. Coinbase has faced legal challenges recently, including allegations of operating as an unlicensed securities exchange and dealing in unregistered securities.

Early Success and Achievements

Despite its relatively short existence, Base has already achieved remarkable success. As of September 19, 2023, it has emerged as the ninth-largest blockchain by Total Value Locked (TVL), surpassing established contenders like Solana. DeFi protocols operating on Base have amassed a substantial $370.50 million in deposits, signaling strong support and adoption within the crypto community. Contributing to Base’s rapid growth are increased activities on the Web3 social media platform Friend.tech and the integration of reputable DeFi applications.

Exploring Base’s Functionality

With Base’s official launch, users can now explore its diverse functionalities, which have the potential to reshape the way we interact with blockchain technology and cryptocurrencies. Here are some key activities users can engage in on Base:

1. Bridging Tokens: Users can seamlessly transfer Ether (ETH) from the Ethereum mainnet to Base using the official Base bridge, which introduced a user-friendly interface on August 3. Additionally, the cross-chain bridging protocol Wormhole has become available on Base.
2. Swapping Tokens and Providing Liquidity: Base hosts at least two decentralized cryptocurrency exchanges (DEXs), including Uniswap and Maverick Protocol. These DEXs offer users the ability to swap tokens and participate as liquidity providers. LeetSwap, another DEX, is set to relaunch in the future.
3. Making Payments: Base provides a payment application called Beam, enabling users to make payments using U.S. Dollar Coin (USDC) or the app’s native coin, Eco. Beam offers a hassle-free experience, as users can log in with their Twitter accounts and pay for gas fees using USDC or Eco.
4. Registering Usernames: Masa Finance offers a soulbound token protocol for Base, allowing users to register “.base” Masa usernames. These usernames have the potential for use in credit underwriting and other Know Your Customer (KYC)-compliant services.
5. Launching DAOs: Aragon, a decentralized autonomous organization (DAO) creation protocol, has introduced its “no-code Aragon app” and “modular Aragon OSx” on Base. This empowers developers and end-users alike to create DAOs on Base with ease.
6. Minting and Collecting NFTs: Base has attracted multiple brands and projects, including Coca-Cola, Coinbase’s Stand With Crypto campaign, Showtime, Atari, Optimism, and OpenSea, to mint exclusive NFTs on its platform. This ongoing event, known as the Onchain Summer festival, promises unique NFT launches throughout August and early September.

Challenges and Lessons Learned

Despite its promising start, Base has not been without its challenges. During its phased launch, some users experienced difficulties, leading to financial losses. For instance, the July 28 Pond0x memecoin launch on Base resulted in an estimated $2.2 million in losses due to distribution confusion. Another incident involved a $1.9 million loss during the July 31 BALD token launch when liquidity was pulled unexpectedly.

The Future of Base

As Base continues to evolve, one can’t help but wonder about its future trajectory and the opportunities it will present. While the roadmap to the mainnet remains undisclosed, it’s certain that Base will play a pivotal role in shaping the cryptoeconomy.

The Coinbase-Base Connection

Base serves as a strategic endeavor to integrate Coinbase’s products, users, and assets into the decentralized cryptoeconomy. By leveraging Ethereum and collaborating with Optimism on the open-source OP Stack, Coinbase aims to progressively decentralize Base over time, ensuring a decentralized approach to innovation.

Future Token Considerations

While Base currently has no plans to issue a new network token, it’s essential to remain cautious of potential scams involving fake Base tokens. Users are encouraged to avoid interactions with such entities and exercise vigilance in their crypto transactions.

Key Takeaways

In the rapidly evolving world of cryptocurrencies and decentralized technologies, Coinbase’s Base stands as a testament to innovation and adaptability. Its emergence as an Ethereum Layer-2 network with a broad array of functionalities opens up new possibilities for developers and users alike. As Base continues to flourish and expand its ecosystem, it promises to play a pivotal role in shaping the future of the cryptoeconomy.

Disclaimer: Embr is not a financial advisor, and nothing in this article is intended to be financial advice. Please consult with a licensed professional before making any investment or trading decisions.

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