What is Coinbase’s Layer 2 Network “Base”? A Comprehensive Guide on How to Use It
Overview of Base: Why is it Gaining Attention Now?
In August 2024, Coinbase introduced a new Layer 2 network called “Base,” which has quickly become a hot topic in the cryptocurrency industry. This network is based on “Optimism,” an Ethereum scaling solution, and aims to provide secure transactions at low costs.
However, with such technological advancements come potential concerns for users. Transitioning to a new network might change how assets are managed and raise concerns about regulatory uncertainties.
Base is Coinbase’s Ethereum Layer 2 solution, designed with beginner users and decentralized finance (DeFi) access in mind. This design allows users to avoid the high gas fees on the traditional Ethereum network, making it easier for more users to participate in the DeFi ecosystem.
Key Features of Base
1. Utilization of Optimistic Rollup Technology
Base leverages Optimistic Rollup technology, which enables off-chain transaction processing. Specifically, it reduces fees by bundling multiple transactions into a single batch and sending it to the Ethereum mainnet. This allows users to benefit from Ethereum’s security while significantly lowering transaction costs.
2. Strong Support for Developers
Base targets the Ethereum developer community and offers access to Coinbase’s vast user base. Major decentralized applications (dApps) like Aave and Sushiswap have already announced their deployment on Base, and it is expected that many new dApps will become available on this network.
3. Strategic Deployment by Coinbase
Base is positioned as part of Coinbase’s long-term strategy. It aims to become part of a “Superchain” in the future, providing a solution to Ethereum’s scaling issues. Additionally, through Base, Coinbase seeks to accelerate its expansion into the DeFi space and establish new revenue streams.
How to Use Base: A Beginner’s Guide
1. How to Connect to Base
To connect to Base, it is recommended to use Coinbase Wallet. By selecting the Base network from the wallet settings and bridging from Ethereum to Base, you can start using it right away. The process of moving tokens from the Ethereum network to Base is straightforward and can be completed with just a few clicks.
2. Using Major dApps
Several major dApps are already available on Base. For example, you can use Aave for lending or Sushiswap for token swaps. These dApps take advantage of the low-cost and fast transactions on Base to enable more efficient operations. Additionally, the NFT marketplace Magic Eden is also deployed on Base, and more assets are expected to be traded on Base in the future.
3. Managing Gas Fees
One of the biggest advantages of using Base is the reduction in gas fees. Thanks to Optimistic Rollup technology, the high gas fees that occur on the traditional Ethereum network are significantly reduced, allowing for more frequent and cost-effective transactions.
Future Prospects and Risks of Base
1. Regulatory Uncertainty
With the launch of Base, regulatory issues have once again come under scrutiny. As a network operated by Coinbase, there is a possibility that regulatory oversight will be strengthened in the future. Coinbase is cautiously addressing this issue, aiming to operate the network in compliance with regulations.
2. Possibility of Token Issuance
Currently, Base does not issue its own token, but there is a possibility that it might do so in the future. However, considering regulatory impacts, this move is likely to be limited for now. Similar to Arbitrum and other Layer 2 networks, methods like airdrops might be used to attract users.
Conclusion
Coinbase’s Base is a significant project that offers new possibilities in the cryptocurrency industry. As a technology foundation that enables low-cost and fast transactions, it functions particularly well as an entry point to the DeFi ecosystem.
Designed for ease of use, even for beginners, more applications are expected to be deployed on Base in the future. However, due to the risks associated with regulatory uncertainties and the maturity of the network, cautious handling is required.
If you are considering using Base, it’s important to stay updated on the latest developments and choose the usage method that best suits your needs. For more detailed information, refer to Coinbase’s official guide to deepen your understanding.
8 Alternatives to Coinbase’s Layer 2 Network “Base” That You Can Try Right Now
While Coinbase’s “Base” is undoubtedly a powerful Layer 2 network, there are other alternatives worth exploring. Here, we propose eight alternatives that are worth considering not just from a technical perspective but also in terms of user experience, cost, security, and developer support.
1. Arbitrum One: A Scalable and Low-Fee DeFi Ecosystem
Overview: Arbitrum One, like Base, is an Ethereum-based Layer 2 solution that uses Optimistic Rollup technology, significantly reducing transaction costs. It has already been adopted by many DeFi projects, and it is known for its low fees and high scalability.
Advantages: With ongoing integration with existing DeFi projects, users can perform low-cost transactions on Arbitrum. Additionally, it has a more established ecosystem compared to Base, offering higher reliability.
2. Optimism: A Superchain Supported by a Decentralized Developer Community
Overview: Optimism is the technical foundation of Base and plays a central role in the superchain concept. This network is supported by a decentralized developer community, providing an environment for quickly deploying new projects.
Advantages: With a longer operational history than Base, Optimism offers extensive tools and support for developers. It is also advancing technological innovations aimed at fundamentally solving Ethereum’s scaling problems, with future developments highly anticipated.
3. zkSync Era: A High-Security Layer 2 Solution Using Zero-Knowledge Proof Technology
Overview: zkSync Era adopts zero-knowledge proof (zk) technology, offering very high security. By using zkRollup technology, it enables fast and cost-effective transactions while maintaining transaction integrity.
Advantages: zkSync Era is ideal for users who prioritize security. Its unique security mechanism ensures transaction certainty without relying solely on the Ethereum mainnet.
4. Polygon: A Multi-Functional and Highly Compatible Layer 2 Network
Overview: Polygon is an Ethereum-compatible Layer 2 network where many projects are already deployed. It offers high security at low costs, with a wide range of dApps available.
Advantages: Polygon is particularly user-friendly for beginners due to its multifunctionality and high compatibility with existing projects. Additionally, it has robust cross-chain functionality with other blockchains, making asset movement easier.
5. Avalanche: High Throughput and a Rich Ecosystem
Overview: Avalanche is a blockchain platform with a unique consensus algorithm, boasting very high throughput. Its unique subnet feature allows for the creation of multiple custom blockchains.
Advantages: Avalanche is ideal for applications that require high-frequency transactions, such as gaming or NFT marketplaces, due to its ability to process large volumes of transactions quickly.
6. StarkNet: A Next-Generation Layer 2 Focusing on Scalability
Overview: StarkNet is a Layer 2 solution that uses the innovative STARK (Scalable Transparent Argument of Knowledge) technology. This technology compresses transaction data and sends it securely to the Ethereum mainnet.
Advantages: StarkNet offers very high scalability and security simultaneously, making it ideal for decentralized finance (DeFi) and NFT-related projects. Additionally, its low transaction fees make it advantageous for large-scale data processing.
7. Immutable X: A Layer 2 Network Specializing in NFTs and Gaming
Overview: Immutable X is a Layer 2 network specializing in NFTs and blockchain gaming. It allows for zero gas fees on trades and enables fast transactions.
Advantages: Immutable X is ideal for NFT artists and blockchain game developers. Many major game studios have already adopted Immutable X, with significant future growth expected.
8. Fantom: A Layer 1 Platform Offering Fast and Low-Cost Transactions
Overview: Fantom is a Layer 1 platform known for its high throughput and low-cost transactions. It is Ethereum-compatible, with many dApps already deployed.
Advantages: Fantom is suitable for projects requiring their own blockchain rather than a Layer 2 solution. It is also ideal for projects with high transaction volumes due to its fast and low-cost transactions.
While Base is undoubtedly a powerful platform, many alternatives offer unique strengths. The best choice depends on your project’s needs and usage purposes. Start by selecting the platform that best fits your needs, and conduct further research to make the optimal choice.
