Coinbase's On-Chain Evolution: The Base Connection

TL;DR

• Base from Coinbase is helping to pave the way for a 'Superchain' with bold visions for the future
• Coinbase's 108 Million users will soon get access to Smart Wallets which will "bring Coinbase on-chain"
• Large number of retail money gets instant access to DeFi via Base, from within their already existing Coinbase wallet
• As the volume on Base likely goes higher, this might just achieve second place in TVL after Ethereum

With the current hype of degenerates actively trading on Base chain experiencing the joy of little to no gas fees, it is setting a precedent that can be hard to follow, especially with what's coming next. Soon the 73 million existing Coinbase customers will be able to login with their new sleek Smart Wallets on Coinbase and immediately start trading tokens on Base blockchain.

With this turn of events, Base might well be the retail casino of this cycle replacing Binance Smart Chain from the previous bull run. And guess what? The people onboarding to it will be using Ether to trade.

So what is Base and what is all the hype about? Let's dig in and find out.

What is Base?

Base is an Ethereum Layer 2 (L2) platform that proudly claims to offer "The best of Ethereum but 10x cheaper." Think of Base as Ethereum's sleeker, more cost-effective cousin. It's like Ethereum on a diet, shedding those hefty gas fees and delivering a lightning-fast experience for developers and users alike.

Base is all about creating a fast, low-cost environment to revolutionize the crypto economy. Built using the open-source OP Stack from Optimism, Base has its sights set on full decentralization, aiming to elevate the state of crypto to new heights.

If you're not familiar with Layer 2 solutions, imagine a blockchain that sits on top of another blockchain (in this case, Ethereum) to enhance and expand upon its existing functionality. Now, Base isn't the first L2 we've seen at Flagship, and it likely won't be the last. But what sets Base apart from the pack? Well, for starters, it's backed by the power house that is Coinbase.

What makes Base truly stand out is its ambitious vision of becoming part of a 'Superchain' – a collaborative effort spanning the entire crypto economy. This 'Superchain' aims to achieve full interoperability, seamlessly connecting different platforms and networks.

Base isn't just out to beat Ethereum; it's aiming to work alongside it, contributing to a shared vision of the future. Take, for example, their partnership with the Optimism Collective, where they're jointly developing foundational elements for integration into various L2s within the 'Superchain' ecosystem, including Base and Optimism Mainnet.

Now, let's talk about Coinbase. They were pioneers in making it easy for retail investors to buy Bitcoin, laying the groundwork for crypto adoption. And now, Brian Armstrong, CEO of Coinbase, is taking a bold step by bringing Coinbase on-chain.

But it's not all serious business at Base. Did you know that the first memecoin to gain traction on Base was $BALD? A cheeky nod to Brian Armstrong's shiny dome. Unfortunately, like many good shitcoins, the journey to Base wasn't without its bumps, and some investors found themselves caught in a dev rug pull.

What is the Coinbase Smart Wallet and why should I care?

The Coinbase Smart Wallet is like any other Ethereum Virtual Machine (EVM) based wallet, just as you would use with Metamask for example (or Rabby Wallet: a much better feature-rich alternative), except it’s specific to Coinbase's customers. No need to fret about seed phrases and private keys; Coinbase has got you covered with a user-friendly experience that's as easy as ordering your morning coffee.

It's basically going to be an upgrade to what DeFi users are already accustomed to, whereby noticeable features will pull through in the experience of using it across different and new applications. With Smart Wallets set to become the default option in 2024, Coinbase users can seamlessly move funds on and off the exchange with just a tap, blurring the lines between on-chain and off-chain transactions.

And with the floodgates opening for DeFi adoption, thanks to Coinbase's massive user base, Base is gearing up for a tsunami of liquidity that could propel it to new heights.

The experience of trading for users with Smart Wallets is aiming to be seamless, with no difference being on-chain vs off-chain, the experience should be super smooth so as to bring more people on-chain without the poor user experience usually attributed to Web3 Dapps.

When is Base due to integrate with Coinbase?

The first weeks of April, it was said... But in Web3 time, deadlines are more like suggestions, so mark your calendars for this and the next month for updates from their Twitter. They have promised to begin with the integration by April 2024 according to their blog, but it may be a case of slowly implementing feature by feature, as opposed to bringing Coinbase on-chain all at once.

While there may be some sell-the-news action leading up to the launch, fueled by speculation and anticipation, the real fireworks will come afterward. With 100-200 thousand active wallets from Coinbase flooding into DeFi on Base, any retracement in token prices will likely be short-lived. Soon every Jim, Jack and Harry with enough Ethereum in their smart wallet might start putting their life savings into memecoins too.

Just take a look at the Total Value Locked (TVL) on Base; it's been skyrocketing since late February, and there's no sign of it slowing down.

And with Base already nipping at the heels of Ethereum in terms of active addresses, it won't be long before it claims its spot as Ethereum's worthy adversary. To give a perspective of how far Base chain has come in such a short amount of time look at the competition in terms of TVL on chain.

Base is ranked 7th which is an impressive height given that they launched 9th August 2023. What's more, with already a very comparable active addresses number to Ethereum's, we could hypothesize that a lot of the total value locked currently on Ethereum will start to move over as Base becomes a more dominant competitor in the crypto economy.

Closing Thoughts:

Base has an interesting history and trajectory. It is the only L2 to exist that predominantly came from an already established large functioning exchange and user base so huge which begs the question, why even build it?

"Base is our 'all in' commitment to on-chain."

Base isn't just another Layer 2 solution; it's the culmination of Coinbase's vision to scale Ethereum to new heights. With its eye on the prize and a relentless pursuit of innovation, Base could very well be the Ethereum killer we've been waiting for.

But even if it doesn't dethrone Ethereum, it's poised to become a dominant force in the crypto economy, thanks to Coinbase's global reach and unwavering commitment to on-chain excellence and a shared vision for the ‘Superchain’.

What’s more, given that Coinbase is primarily used by Americans, but base being global and beyond borders, it could well be that Coinbase has set up the next perfect revenue stream to develop the company even further. Smart move.

So, buckle up and get ready for more hype to continue on Base. This L2 is definitely one to watch. Base hasn't even gotten started yet. The train is about to leave the station, and you won't want to miss this ride!

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