Base, Coinbase's layer-2 blockchain, has become the second-largest L2 network. It's a surprising twist. Base isn't exactly cutting-edge tech.
The project launched last year using borrowed code - it's built on Optimism's OP Stack framework. Yet Base now holds an 18% market share among 74 active L2 networks.
Only Arbitrum One beats it, with a 40% share. Base has leapfrogged over established players like Starknet, Polygon, and even Optimism itself.
L2 networks aim to make Ethereum faster and cheaper. They bundle transactions and settle them on the main chain. It's a bit like filing records at the county clerk's office. But here's the kicker: marketing prowess trumps tech chops in the blockchain race. Coinbase's deep pockets and promo events have fueled Base's growth.
Take their recent "Onchain Summer" campaign. It drew over 2 million unique wallets, and creators pocketed more than $5 million in mint revenue.
"The results really blew us away," a Coinbase spokesperson gushed. Participation was 8x higher than last year, doubling internal expectations.
Blockchain data backs this up. Token Terminal shows Base accelerating while other L2s slow down.
Coinbase's not shy about splashing cash. They spent $165 million on marketing in Q2 2023 alone. That's double the previous year's figure.
Base is raking it in, too. In Q1 2024, Coinbase reported $52.5 million in "other" transaction revenues, including Base's sequencer fees.
But is it all smoke and mirrors? Are these real users or just crypto tire-kickers? Some reckon it's down to memecoins and easy onboarding from Coinbase. Rob Hadick of Dragonfly VC notes Base's popularity for swapping "longer-tail assets". But a closer look shows lots of memecoin action. That's notoriously fickle.
Coinbase's smart contract wallet makes it a breeze to move tokens over. No seed phrases, no hassle. It's a game-changer for curious newbies.
Oskari Tempakka from Token Terminal credits the Coinbase-Optimism combo. A U.S.-listed exchange plus Optimism's tech smarts? It's a potent mix.
Base's rise shows that in crypto, as in life, it's not just what you know. It's who you know – and how well you can sell it.