In February 2023, cryptocurrency exchange giant Coinbase announced a new Optimism-based Ethereum layer two (L2) chain called "Base". It's designed to increase Ethereum's scalability, provide a new option for dApp development, and bring in the next billion users.

In this article, we will explore what Base is, its main features, challenges and opportunities.

What is Base?

Base is a layer 2 blockchain protocol, currently in the testnet phase. It is built on top of Ethereum and designed to improve scalability, security and user experience. Its main innovation lies in the use of 'off-chain' channels, which enable faster and cheaper transactions without sacrificing the security and decentralization of the underlying blockchain.

One of Base's key advantages is its ability to reduce congestion on the Ethereum network by allowing large volumes of transactions to be processed off-chain. 

This is achieved through the use of state channels, which are secure, bi-directional communication channels that allow a series of transactions to be executed without the need for each individual transaction to be recorded on the blockchain. 

Instead, only the final state of the channel is committed to the Ethereum blockchain, resulting in significant cost savings and faster transaction times.

Key features

Base has several notable features. These include:

Developer-friendly Environment

Base is easy to use and provides simple APIs and toolkits to help developers build anything freely. As the platform offers Ethereum equivalence, developers can implement code without modification. 

This makes Base a developer-friendly platform that is secure, scalable and easy to use.

Security of Ethereum

The Base network relies on the security of the Ethereum blockchain, as it operates on a different blockchain layer to L1. The platform ensures the security of users' data by adopting best practices. 

Base's security and scalability make it an ideal platform for launching dApps, and it easily interacts with Ethereum L1, the Coinbase ecosystem and other compatible chains.

EVM Equivalence

The Base L2 network has an Ethereum Virtual Machine (EVM) feature that offers EVM equivalence, providing an interactive environment for users. 

EVM equivalence makes the Base L2 network more efficient than most EVM-compatible solutions, as it allows for full compatibility with the L1 blockchain. This makes Base a viable solution for executing complex smart contracts.

Cost Effectiveness

Base makes the Ethereum network scalable and lowers its cost. By moving transaction processing off-chain, it reduces the gas fee. The platform may move to gasless transactions in the future. Base does not have a separate native token and uses ETH for all native token purposes, so gas fees are paid in ETH. 

Initially, the platform is charging a fee similar to most popular L2 solutions such as Optimism or Arbitrum, which is around $0.10-$0.20 per transaction. However, Coinbase is working to reduce this fee to a minimum of $0.01, making it one of the most cost-effective L2 solutions. There is no plan to issue a new network token.

Challenge or Opportunity?

One of the key challenges facing Base is adoption. While the platform offers a number of benefits, it is still relatively new and many developers may be reluctant to switch from established Layer 1 or Layer 2 solutions. 

However Base has advantage of established Coinbase ecosystem that can help with that. And that brings us to its opportunity.

Coinbase is one of the largest cryptocurrency platforms in the world, Coinbase's integration with Base gives developers access to a wide range of tools and services, including fiat-to-crypto onramps, offramps and access to over $80 billion in digital assets. 

This integration has potential to drive adoption and increase the platform's user base. Base is also launching with dozens of partners who’ve committed to building in and supporting the ecosystem, including Chainlink, Etherscan, and Aave.


Base is an exciting new development in the world of blockchain technology. By using off-chain channels, Base has the potential to significantly improve scalability and reduce transaction fees on the Ethereum network. 

While it still faces some challenges, its flexibility, interoperability and developed Coinbase ecosystem make it a promising platform for developers and users alike. 

As the blockchain space continues to evolve, it will be interesting to see how Base and other layer 2 blockchain protocols shape the future of decentralized applications and the wider blockchain ecosystem.

Check Base here:
Base Developer Docs
Base Discord
Base Twitter



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