Letter 46: Base, A New L2 Blockchain
All your base are belong to us
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Even in a bear market, there are countless things happening at all times in the crypto space. It is really difficult to stay on top of even a fraction of them; I sure as hell don’t, and this is my full time job.
I do try and catch the big ones though and Base seems like a big’n, so let’s dive in and see what the heck Base is, why you might want to pay attention, and how you can bridge funds over and interact with the new blockchain:
This free Newsletter is sponsored by Primordia, An Ethereum NFT collection that utilizes WEB2 vehicles including carbon credits from forestry and a pet vitamin ecommerce company to deliver quarterly USDC reward claims for its holders.
REAL utility, real rewards, in real life.
WL & Public mint is on the 17th of August, 12PM EST.
What is Base?
A good a place as any to begin. Simply put, Base is a new L2 (Layer 2) Blockchain built on top of Ethereum. It is created by Coinbase (hence the name), one of the largest and most reputable crypto exchanges in the world.
Uhh.. what is an Layer 2?
Fair and good question — I should not assume that everyone knows. To answer it appropriately though would take an entire Letter in and of itself, so I’ll give you the cliff notes version:
Basically, a Layer 2 is a separate blockchain that is built on top of an existing chain (a Layer 1). For instance, Bitcoin and Ethereum are both referred to as Layer 1s. Layer 1s are great because of their security and decentralization, but they sometimes suffer in their ability to scale with lots of active users (due to high fees or long transaction times).
L2s are a clever way of leveraging the underlying security of the original L1 chain, while increasing transaction speeds and reducing fees.
If you want to learn more, I highly recommend reading this page.
So, Base is an L2 built by Coinbase, on top of Ethereum. It is not the only L2 — there are many others (Optimism and Arbitrum One are two of the most popular other examples).
In fact, Base is built using the “OP Stack”, an open-source set of software that powers Optimism. A huge shoutout to Optimism for helping power Base (and other L2s); this is a great thread on why they built the OP Stack to be “the most forkable, modular scaling infrastructure out there”.
This all begs the question though…
If there are already other L2s — and Base is simply using the same tech as Optimism — why not use that, or another one?
In a word: Coinbase.
Those of you who have been around for a couple of years might remember the wild excitement we all in the NFT space had when we heard that Coinbase was releasing their own marketplace at the end of 2021 / early 2022.
We were so excited because Coinbase has over 100 MILLION users on their platform. Yes, you read that right. And we were oh-so-naively thinking / hoping / coping that their marketplace would launch and all of a sudden we’d have millions of people buying our bags.
Alas, their marketplace launched and was effectively DOA, never getting much volume at all (for a variety of reasons, again, outside the scope of this Letter).
The point being though that the prospect of introducing 100 million users who mostly held their assets custodied within Coinbase (ie not actually on a blockchain) to interacting on-chain is… highly appealing, and frankly, freaking awesome.
Like when you think about it, really think about it.. Coinbase’s entire business model is to have users use their platform, keeping funds on their platform, swap and exchange on their platform, and make money from all of this.
They’re now expanding and encouraging users to take funds off their platform and into their own self-custodied wallets (admittedly, they have their own Coinbase Wallet that they’re pushing hard). But still. This is clearly a company with a long term vision, that believes in the fundamentals of crypto, and they are even committed to decentralizing Base over the next few years.
And all this shows in their vision for Base:
“Base was created with a clear vision: bring the next million builders and billion users onchain” - Jesse Pollak
Where Coinbase’s NFT Marketplace may have stumbled, it seems like Base might thrive. They’re pulling out all the stops, and so far, the launch appears to be going very well. They’re self-proclaiming it to be…
They have lined up a series of pretty damn incredible mints and partnerships, starting today (9th August). You can find all the details at https://onchainsummer.xyz, but to give you an idea..
Parallel is legitimately one of the best gaming NFT companies I have ever seen — they’ve been around for years, have built the right way, have an actually great game, a strong ecosystem, and are launching a starter-deck that anyone can buy and then immediately use to play with. How’s that for utility?
Coca-Cola is freaking Coca-Cola, literally the most recognizable brand on earth. Okay they’ve done some NFT stuff before and it didn’t go superbly, but this time.. what on earth do they mean they’re bringing works from Munch, Vermeer, and Van Gogh?! Like, what? Not to mention a whole host of wonderful emerging artists. But seriously, Van Gogh? I don’t even know what that means, but
There are another 2 weeks of drops after that, taking us to the end of August.
I honestly have no idea if any of this will be profitable, or if you’re going to make money minting these things. I think there’s a reasonable chance you will, especially if people are sleeping on these drops (and, generally, when you have to bridge ETH to a new chain and there’s friction involved, way too few people actually do the things needed).
But even if there’s no immediate profit to be had — there are some amazing things to collect, some new experiences to be a part of, and a new ecosystem to support and explore. If you’re a builder, then it’s worth considering building on Base too — check out this post for more info for builders.
You can explore their whole ecosystem on this page.
And if making money is your thing, and you want to be a degen, there’s no shortage of meme coins already launched (and surely more to come) over on Base.
Sidenote but it’s important to note that they have said numerous times that they have no plans to issue a new network token. So, don’t expect a $BASE token drop any time soon (or any time ever). That said… Optimism once upon a time also said they had no plans to release a token...
Who knows what the future holds — if the regulatory landscape opens up, perhaps in a few years, there’s a token, and the early users are rewarded. Just don’t hold your breath for it.
How to be Based?
Okay so you’re interested in checking things out, uhh, how do you actually use an L2?
It’s super easy, and literally only takes a few minutes and a few dollars.
Basically, you need to “bridge” your funds over. Think of it like transferring your ETH from one blockchain (Ethereum) to another (Base). The easiest way, if you’re already accustomed to using your own wallet like MetaMask or Coinbase Wallet, is to use the official bridge: https://bridge.base.org/deposit.
Connect your wallet to the site, enter an amount of ETH to bridge over, hit “deposit ETH”, and confirm in your MetaMask (there’ll be a gas cost). It’ll take 5-10 minutes for your funds to appear on the Base chain.
It’s worth noting that bridging back can take longer. The official website says it will take 7 days to bridge your funds back to Ethereum Mainnet, but there may be 3rd party bridges and services that can do it in a shorter time span (though these carry additional risks).
I would only send an amount you’re comfortable dabbling with, and won’t have an urgent need for in the short term.
Now if you want to “see” your funds, and “do stuff” with them, you need to change the network settings of your wallet. This can seem confusing, but there’s a shortcut and easy way to do this. Go to https://onchainsummer.xyz/base and you should see the following:
Click on Switch To Base, and then you’ll get a pop-up in your wallet (I use MetaMask, and this is what I see):
There may be a warning or two telling you that it’s risky to add networks if you’re not sure what they are. You can verify these details by checking the official Base Documentation here. The most important things are that the Chain ID and Currency Symbol are the same.
And… you’re all set! You can now mint NFTs, swap tokens, and generally transact on Base just as you would on Ethereum (except with much lower fees).
If you’re reading this as soon as it goes out, you can mint a commemorative “Base Day One” NFT for 0.000777 ETH ($1.44) on the onchainsummer home page. Tomorrow (Thursday) at 9am PT you will be able to mint the DeeKay piece. The price isn’t known yet but apparently it’s “a very low price”, and an open edition, so is hopefully very accessible to all.
Congrats, you’re now based.
If you’re having any trouble or have any questions, I am always hanging out in the ZenAcademy Discord ready to help anyone (as is our amazing team of mods and other team members).
Final Words on L2s
I am monstrously bullish on Ethereum. I think it is the blockchain that will power the future of the internet. While I believe in a multi-chain future, I think Ethereum will be the dominant Layer 1 for all application-based use cases (and Bitcoin the dominant Layer 1 for “store of value” purposes).
One of the greatest issues with Ethereum being “the world computer” though is how damn expensive it is to use! Transaction fees are absurdly high, and 99.9% of the world will never be able to justify transacting on mainnet when it costs between $3-$100 for an on-chain transaction.
Enter L2s. These are the scaling solutions we need, and they are so elegantly designed to be a layer on-top of Ethereum that it really is like having your cake and eating it too. You get all the security of Ethereum with the speed and low fees of a faster blockchain. If you’re bullish on Eth, you should be bullish on L2s. I sure as heck am.
“Which L2s are gonna win?”
I don’t think it matters, nor do I necessarily think there will be “one” winner. I think we’ll have many thriving L2s, creating a thriving Ethereum ecosystem.
I think we will all be using more and more L2s as time goes on.
It is a good time to learn about them now. Yes it’s a bear market, and sure maybe there’s not as much money to be made now than in the bull times, but you can invest in something even more valuable than $: yourself, and your knowledge, and your future.
I used to sign off all these Letters with “we’re still early”. While I wholeheartedly still believe that we are early (ironically, I think we’re earlier now than we were 18 months ago), I think there’s a better sign off:
Never stop learning.
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Disclaimer: The content covered in this newsletter is not to be considered as investment advice. I’m not a financial adviser. These are only my own opinions and ideas. You should always consult with a professional/licensed financial adviser before trading or investing in any cryptocurrency related product.