TL;DR

No-code tools empower individuals to build decentralized applications without coding abilities

No-code tools simplify complex Web3 processes, making blockchain more accessible to all

There are various limitations associated with no-code tools, such as data security and limited functionality.

What Are No-code Tools?

No-code tools empower individuals to build applications, websites, or automate processes without needing to write code. They largely leverage a visual development environment, enabling users to design interfaces and workflows by dragging and dropping elements.

No-code tools in the crypto space allow people without technical coding skills to interact with, build on, and leverage blockchain technologies. These platforms provide ready-to-use interfaces and workflows, enabling users to perform functions that usually require complex coding, such as creating smart contracts, building a decentralized application (DApp), initiating DeFi (decentralized finance) transactions, and more.

For instance, a no-code platform might let a user set up a smart contract on the Ethereum network by filling in specifics about a transaction, such as parties involved and conditions for the transaction, without any coding. Similarly, it could enable users to create DApps, crypto trading bots, or yield farming operations by simply selecting options and defining conditions.

No-code Tool Use Cases in Web3

No-code tools in Web3 are enabling a wide range of applications, making the decentralized web more accessible to users with non-technical backgrounds. Here are some use cases:

1. Decentralized applications (DApps)

No-code platforms enable people without technical skills to create DApps that run on blockchain technology. Users can easily build games, marketplaces, social networks, and more with no coding.

2. Smart contracts 

Users can funnel simple or complex operations through smart contracts on blockchain platforms like Ethereum and BNB Smart Chain (BSC). No-code tools simplify the process, allowing users to define terms and conditions without coding.

3. Decentralized finance (DeFi) 

No-code platforms can help implement DeFi functionalities, allowing users to create their own yield farming strategies, launch liquidity mining schemes, or even prototype a whole DeFi protocol.

What Are the Benefits of No-code Tools?

Let's look into some of the distinct benefits no-code tools offer within the crypto landscape:

1. Accessible

No-code tools break down barriers to software development, making technology creation accessible to individuals regardless of their coding skills. They democratize application development, empowering anyone to become a creator.

2. Efficient

The drag-and-drop function of no-code interfaces accelerates the design and development process. No-code tools eliminate the need for long coding hours, potentially improving development speed and productivity.

3. Cost reduction

By reducing reliance on specialized programmers, companies can cut down on development expenses. Furthermore, the quick turnaround time of building and updating apps using no-code tools requires less resource usage.

4. User friendly

No-code platforms allow for quick edits and updates, accommodating business changes swiftly. They offer an unmatched level of agility compared to traditional programming, enabling businesses to evolve and innovate faster.

What Are the Limitations of No-code Tools

Let's look into some of the distinct limitations associated with no-code tools:

1. Limited customization

While no-code tools offer a wide range of functionality, they may not meet very specific or complex requirements due to their framework limitations. For high-level customization, traditional coding often remains the best option.

2. Data security concerns

Due to a more accessible development environment, there can be potential security threats or data breaches if privacy standards are not strictly adhered to or if the tool doesn't inherently enforce strong security measures.

3. Dependence on vendor

Using a no-code platform invariably ties businesses to the chosen vendor. Any issues with the platform, updates, pricing changes, or even company fold-ups can significantly impact the use and sustainability of the developed application.

4. Scalability issues

While no-code platforms can efficiently handle small to medium-sized applications, they might face challenges with projects demanding high computational power or handling the complexities of massive data sets. 

Closing Thoughts

In the realm of Web3, no-code tools have become key drivers of innovation by opening up opportunities for broader participation. These tools enhance accessibility, enabling individuals and organizations to quickly and efficiently deploy blockchain-based solutions, in turn helping us all realize the full potential of decentralized technology.

However, these attributes should not overshadow the constraints that come with no-code solutions. The limitations, ranging from customization constraints to data security concerns, are essential to be considered in relation to traditional coding.

In the end, while no-code tools bring blockchain's power closer to a broader populace, deploying them should coincide with a careful evaluation of their potential risks and limitations. Their use, thus, should be part of a diversified approach to blockchain development, blended with traditional coding for complex requirements.

Further Reading

What Are Smart Contracts and How Do They Work?

Blockchain Scalability - Side Chains and Payment Channels

Optimistic vs. Zero-Knowledge Rollups: What’s the Difference?

Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

TL;DR

Two-Factor Authentication (2FA) is a security mechanism that requires users to provide two distinct forms of verification before gaining access to an account or system.

Typically, these factors involve something the user knows (a password) and something the user has (a smartphone-generated one-time code), adding an additional layer of protection against unauthorized access.

Types of 2FA include SMS-based codes, authenticator apps, hardware tokens (YubiKey), biometrics (like fingerprint or facial recognition), and email-based codes.

2FA is particularly crucial for the safeguarding of your financial and investment accounts, including those associated with cryptocurrency.

Introduction  

The significance of robust online security can’t be overstated today when our lives are increasingly intertwined with the online realm. We constantly share our sensitive data, from addresses, phone number, ID data, to credit card information across numerous online platforms.

Yet, our primary line of defense is generally a username and password, which has proven itself vulnerable to hacking attempts and data breaches time and again. This is where Two-Factor Authentication (2FA) emerges as a formidable safeguard against these dangers.

Two-Factor Authentication (2FA) is a pivotal security measure that goes beyond the traditional password model and introduces an additional layer of security: a second barrier that fortifies the walls safeguarding your online presence. 

At its core, 2FA is the shield that stands between our online presence and the potential malevolent forces seeking to exploit it. 

What Is 2FA Authentication?

2FA is a multi-layered security mechanism designed to verify the identity of a user before granting access to a system. Unlike the traditional username and password combination, 2FA adds an additional layer of protection by requiring users to provide two distinct forms of identification:

1. Something you know

This is typically your password, a secret that only you should know. It serves as the first line of defense, a gatekeeper to your digital identity.

2. Something you have

The second factor introduces an external element that only the legitimate user possesses. This could be a physical device (like a smartphone or hardware token such as YubiKey, RSA SecurID tokens, and Titan Security Key), a one-time code generated by an authenticator app, or even biometric data (such as fingerprint or face recognition).

The magic of 2FA lies in the combination of these two factors, creating a robust defense against unauthorized access. Even if a malicious actor manages to obtain your password, they would still need the second factor to gain entry. 

This two-pronged approach significantly raises the bar for potential attackers, making it considerably more challenging to breach your security.

Why Do You Need 2FA Authentication?

Passwords have been a long-standing and ubiquitous form of authentication, but they have notable limitations. They can be vulnerable to a range of attacks, including brute force attacks, where an attacker systematically tries various password combinations until they gain access. 

Additionally, users often use weak or easily guessable passwords, further compromising their security. The rise of data breaches and the sharing of compromised passwords across multiple online services have also rendered passwords less secure. 

A recent case in point involves the hack of Ethereum co-founder Vitalik Buterin's X account (formerly Twitter), which posted a malicious phishing link, resulting in the theft of nearly $700,000 from people's crypto wallets.

Although the specifics of the hack remain undisclosed, it underscores the significance of access security. While not immune to attacks, 2FA significantly increases the difficulty for unauthorized individuals attempting to access your accounts.

Where Can You Use 2FA Authentication?

The most common 2FA applications include:

1. Email accounts 

Leading email providers like Gmail, Outlook, and Yahoo offer 2FA options to protect your inbox from unauthorized access.

2. Social media 

Platforms like Facebook, X (formerly Twitter), and Instagram encourage users to enable 2FA to secure their profiles.

3. Financial services

Banks and financial institutions often implement 2FA for online banking, ensuring the safety of your financial transactions.

4. E-commerce

Online shopping websites like Amazon and eBay provide 2FA options to safeguard your payment information.

5. Workplace and business

Many companies mandate the use of 2FA to protect sensitive corporate data and accounts.

2FA authentication has increasingly become a ubiquitous and indispensable feature, enhancing security across a wide range of online interactions.

Different Types of 2FAs and Their Pros and Cons

There are various types of Two-Factor Authentication (2FA), each with their advantages and potential drawbacks. 

1. SMS-based 2FA

SMS-based 2FA involves receiving a one-time code via text message on your registered mobile phone after entering your password.

The advantages of this method is that it’s highly accessible, as almost everyone has a mobile phone capable of receiving text messages. It’s also easy as it doesn't require additional hardware or apps.

But the limitations are that it’s vulnerable to SIM swapping attacks, where someone can hijack your phone number and intercept your SMS messages. This type of 2FA is also reliant on cellular networks, as the SMS delivery may be delayed or fail in areas with poor network coverage. 

2. Authenticator apps 2FA

Authenticator apps such as Google Authenticator and Authy generate time-based One-Time Passwords (OTPs) without the need for an internet connection.

The benefits include offline access, as these work even without internet connection, and multi-account support, which means that a single app can generate OTPs for multiple accounts. 

The drawbacks include the requirement of setting up, which could be slightly more complex than SMS-based 2FA. It’s also device dependent, because you need the app on your smartphone or another device. 

3. Hardware tokens 2FA

Hardware tokens are physical devices that generate OTPs. Some popular ones include YubiKey, RSA SecurID tokens, and Titan Security Key. 

These hardware tokens are typically compact and portable, resembling keychain fobs or USB-like devices. Users must carry them to use them for authentication. 

The advantages are that these are highly secure, because they are offline and immune to online attacks. These tokens often have a long battery life of several years. 

The limitations are that users need to buy them, which incurs an initial cost. Additionally, these devices could be lost or damaged, which require users to buy a replacement. 

4. Biometrics 2FA

Biometric 2FA uses unique physical characteristics such as fingerprints and facial recognition to verify identity.

Its pros include high accuracy and being user-friendly, which is convenient for users who prefer not to remember codes.

The potential drawbacks include privacy concerns, as biometrics data must be securely stored to prevent misuse. Biometric systems can also occasionally produce errors. 

5. Email-Based 2FA

Email-based 2FA sends a one-time code to your registered email address. This method is familiar to most users and requires no additional apps or devices. But it’s susceptible to email compromises that could lead to insecure 2FA. Email delivery would also sometimes be delayed. 

How to Choose the Right Type of 2FA?

The choice of 2FA method should consider factors such as the level of security required, user convenience, and the specific use case.

For high-security situations like financial accounts or crypto exchange accounts, hardware tokens or authenticator apps may be preferred. 

In cases where accessibility is crucial, SMS-based 2FA or email-based 2FA could be more suitable. Biometrics are excellent for devices with built-in sensors, but privacy and data protection must be priorities.

Step-by-Step Guide for Setting Up 2FA

Let’s walk you through the essential steps to set up Two-Factor Authentication (2FA) on various platforms. The steps may differ depending on the platform, but they generally follow the same logic. 

1. Choose your 2FA method

Depending on the platform and your preference, select the 2FA method that suits you best, whether it’s SMS-based, authenticator app, hardware token, or others. If you decide to use an authenticator app or a hardware token, you would need to purchase and install them first. 

2. Enable 2FA in your account settings

Log in to the platform or service where you want to enable 2FA, and navigate to your account settings or security settings. Find Two-Factor Authentication option and enable it.  

3. Choose a backup method

Many platforms offer backup methods in case you lose access to your primary 2FA method. You can opt for a backup method such as backup codes or secondary authenticator apps when available.

4. Follow setup instructions to verify your setup

Follow the setup instructions for your chosen 2FA method. This usually involves scanning a QR code with an authenticator app, linking your phone number for SMS-based 2FA, or registering a hardware token. Complete the setup process by entering the verification code provided by your chosen 2FA method.

5. Secure backup codes

If you receive backup codes, store them in a safe and accessible place, preferably offline. You can print or write them down and keep them in a locked drawer, or securely store them in a password manager. These codes can be used if you ever lose access to your primary 2FA method.

Once you've set up 2FA, it's crucial to use it effectively while avoiding common pitfalls and ensuring your backup codes are secure.

Tips for Using 2FA Effectively

Setting up your 2FA is just the beginning of keeping your accounts secure. You need to follow best practices while using them. 

These include regularly updating your authenticator app, enabling 2FA on all eligible accounts to prevent security threats to your other online accounts, and continuing using strong and unique passwords. 

You also need to remain cautious against potential pitfalls or mistakes. This includes never sharing your OTPs with anyone, stay alert to phishing scams, and always verify the authenticity of requests you receive. 

If you ever lose a device used for 2FA, you must immediately revoke access and update your 2FA settings across all accounts. 

Closing Thoughts 

The biggest take away from this article is that 2FA isn't an option, it's a necessity. 

The ongoing prevalence of security breaches and the consequential losses we witness daily serve as a stark reminder to adopt Two-Factor Authentication (2FA) for your accounts. This becomes particularly crucial for the safeguarding of your financial and investment accounts, including those associated with cryptocurrency.

So, get to your computer, pick up your phone, or buy a hardware token and set up your 2FA right now. It’s an empowerment that gives you the control over your digital safety and protects your valued assets. 

If you already have 2FA set up, remember that keeping safe online is a dynamic process. New technologies and new attacks will continue to emerge. You must stay informed and vigilant to stay secure. 

Further Reading

Common Scams on Mobile Devices

5 Common Cryptocurrency Scams and How to Avoid Them

Why Public WiFi Is Insecure

Common Bitcoin Scams and How to Avoid Them

Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

TL;DR

MiCA is the EU's first crypto regulatory framework, focusing on consumer protection, financial stability, and innovation by establishing clear standards for market participants.

The EU's MiCA regulation streamlines licensing, supervises stablecoins, and improves anti-money laundering measures.

While positioning the EU far ahead of other regions in crypto regulation, MiCA has some  potential drawbacks including increased compliance costs, reduced anonymity for users, and concerns about overregulation.

What Is MiCA (Markets in Crypto Assets Regulation) ?  

The Markets in Crypto Assets Regulation (MiCA) is a crucial regulatory framework devised by the European Union that reached consensus in October 2022. Ratified by the European Parliament on April 20, 2023, MiCA is the first framework of its kind in the world and provides clear guidelines and standards for crypto market participants with the aim to ensure consumer protection and maintain market integrity.

MiCA implementation is scheduled between mid-2024 and early 2025, which could position Europe as the first to implement a regulatory framework of this type. By creating a standardized approach, MiCA looks to support innovation and growth in the crypto market while addressing potential risks and challenges.

What Are the Key Components of MiCA?

MiCA encompasses several key components that aim to bring transparency, stability, and consumer protection into the European crypto market.

1. Licensing requirements

One of MiCA’s primary components is the licensing requirements for issuers of crypto assets (with some exceptions) and providers of crypto-related services such as exchanges and wallet providers. These rules help streamline processes for initial coin offerings (ICOs) and security token offerings (STOs) and ensure that issuers adhere to disclosure and transparency requirements.

2. Stablecoins and asset-backed tokens

MiCA includes specific requirements for asset-referenced tokens (ART) and electronic money tokens (EMT), which could potentially pose risks to financial stability. ART denotes crypto tokens exchangeable with multiple fiat, physical assets, or cryptocurrencies, while EMTs refer to tokens pegged to one fiat currency. The framework delineates authorization processes, capital requirements, and governance structures for issuers of stablecoins, helping maintain their stability and ensure that they meet minimum asset reserve requirements.

3. Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) rules

MiCA strengthens Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) rules for crypto assets service providers. This requires that these providers implement robust AML/CTF procedures in line with existing regulations like the Anti-Money Laundering Directive (AMLD) of the EU. Consequently, it makes tackling the risks associated with illegal activities in the crypto ecosystem more manageable.

4. Consumer protection

MiCA's consumer protection measures are designed to safeguard investors and traders by imposing several obligations on market participants. This includes pre-contractual disclosures, rules regarding targeted advertising, and mandatory transparency in service offerings. Enforcing strict transparency and disclosure requirements allows MiCA to hold market participants accountable, which helps reduce the likelihood of fraud and other unsanctioned activities.

5. Supervision and enforcement

MiCA provides a framework for supervision and enforcement through the establishment of supervisory authorities at national and supranational levels. National authorities will oversee service providers, while the European Securities and Markets Authority (ESMA) will supervise specific aspects, such as stablecoins and cross-border services. The collaboration between national and supranational authorities could aid the smooth implementation of MiCA regulations across the European Union.

What Is the Impact of MiCA on the Crypto Market?

MiCA's implementation will have myriad effects on various stakeholders in the European crypto market. For businesses, the adoption of standardized guidelines could streamline operations and provide regulatory certainty. Exchanges and wallets may need to modify their platforms to accommodate the new requirements. 

On the other hand, individual investors are expected to benefit from enhanced consumer protection and increased transparency, though some may be concerned with potential privacy concerns resulting from strict Anti-Money Laundering (AML) and Know Your Customer (KYC) provisions.

What Are the Benefits of MiCA? 

The Markets in Crypto Assets Regulation (MiCA) offers numerous potential benefits for the European crypto market and its participants.

1. Consumer protection 

MiCA establishes clear rules and standardized disclosure requirements, which are designed to protect investors from fraudulent activities and malicious actors in the crypto market. Enhanced consumer protection can bolster investor confidence and promote market participation.

2. Market integrity 

By regulating and supervising market participants, such as exchanges and wallet providers, MiCA enhances market transparency and integrity, fostering a fair and competitive environment.

3. Increased institutional investment

The legal certainty and robust regulatory framework provided by MiCA could attract more institutional investments. Greater participation from institutional investors can inject more capital into the market, further facilitating the growth and maturity of the crypto market.

4. Legitimization and innovation

With a standardized regulation in place, the crypto market could obtain a greater level of legitimacy and is more likely to receive support from governments. A consistent and transparent regulatory environment can also encourage innovation and investment within the European Union.

What Are the Limitations of MiCA? 

While MiCA aims to create a comprehensive regulatory environment for the crypto market to thrive in the European Union, its implementation presents several challenges.

1. Increased compliance costs 

MiCA mandates additional compliance procedures for market participants, which could increase operational expenses, especially for smaller firms and start-ups that may struggle to allocate resources for compliance.

2. Reduced pseudonymity

MiCA's stringent Anti-Money Laundering (AML) and Know Your Customer (KYC) provisions may result in a loss of pseudonymity  for some market participants. This aspect could dissuade privacy-focused individuals and companies from engaging in the EU crypto market.

3. Overregulation concerns 

Some industry participants argue that overregulation could stifle innovation and competition, as market players may find it difficult to navigate a vast array of legal requirements. Implementing MiCA without hindering innovation is a significant challenge for regulatory bodies.

4. Market barriers for small businesses 

The resources required to comply with MiCA might create barriers to entry for smaller businesses and start-ups, potentially benefiting established, larger players with more resources. Such barriers may reduce diversity in the crypto market and stifle emerging developments.

Closing Thoughts 

MiCA represents a significant and comprehensive initiative to regulate the burgeoning crypto market within the European Union. Through standardized regulations, the framework seeks to balance consumer protection, market integrity, and innovation and foster a safer, transparent, and accountable crypto market environment. 

However, the implementation of MiCA presents both opportunities and challenges, and stakeholders must be aware of their potential impacts. As the implementation of MiCA proceeds, being informed and proactive in ensuring a compliant and thriving market is critical for all concerned parties.

Further Reading

How to Trade Crypto Responsibly

How Is Cryptocurrency Taxed?

Asset Allocation and Diversification Explained

Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

TL;DR

Base is an Ethereum Layer 2 solution developed by cryptocurrency exchange Coinbase, in partnership with Optimism to provide a secure, cost-effective and developer-friendly environment to build on-chain applications. 

Base is compatible with all EVM-wallets and the Coinbase wallet.

Base has diverse use cases including payment apps, token swaps, liquidity provision, token bridging and launching DAOs.

What Is Base?  

Base is an Ethereum Layer 2 (L2) blockchain officially released on August 9, 2023 by US-headquartered crypto exchange Coinbase. Base garnered attention in the crypto community because it’s the first blockchain launched by a publicly traded company. 

Base was developed in partnership with Ethereum L2 blockchain Optimism on the OP Stack, a standardized and open-source development stack that powers Optimism. Base allows developers to build decentralized apps (DApps) with access to Coinbase’s ecosystem of 110 million verified users and more than $80 billion assets. 

Base’s vision is to create a so-called Superchain powered by Optimism supported by a community of developers. Base has publicly announced that it doesn’t currently plan to issue a new network token for Base, therefore users should be extremely cautious about scammers that offer fake Base tokens. 

What is Layer 2?

Layer 2 blockchain is a term used to describe secondary protocols or frameworks built on top of an existing blockchain network (Layer 1) such as Ethereum. The primary purpose of Layer 2 solutions is to improve the scalability, transaction throughput, and efficiency of the underlying Layer 1 blockchain, without compromising its security or decentralization.

There are several types of Layer 2 blockchain technologies, including state channels (Lightning network for Bitcoin and Raiden network for Ethereum), sidechains (Liquid network for Bitcoin and Loom network for Ethereum), and rollups (Optimistic rollups and ZK-rollups). 

Some of the most widely used Layer 2 blockchain networks include Optimism, Polygon, zkSync, and Arbitrum. 

What is Optimism?

Optimism is a Layer 2 blockchain solution built on top of the Ethereum network, aiming to improve its scalability, transaction throughput, and reduce associated fees. Optimism leverages a technology called Optimistic Rollups, in which multiple off-chain transactions are aggregated into a single on-chain data representation and submitted to the main Ethereum chain. 

Optimism utilizes a fraud-proof system, which assumes all aggregated rollup transactions are valid initially. Users can challenge these transactions and submit potential fraud proofs within a specified time frame. If any fraudulent activity is detected during this period, the malicious user is penalized, and the transaction is rolled back.

What Are the Use Cases of Base? 

Like other L2 networks, Base can be used for a wide range of use cases. Here are some applications that have been built on Base. 

1. Payment apps

Beam is a payment app that enables users to conduct transactions using either the stablecoin USDC or the app's native token, Eco. Users can sign in using their Twitter accounts and cover gas expenses through USDC or Eco. Additionally, Beam includes an integrated fiat-to-crypto and crypto-to-fiat conversion gateway.

2. Token swaps 

Token swapping on decentralized exchanges (DEXs) allows users on Base to trade various cryptocurrencies. Currently there are several decentralized exchanges that are running on Base, such as Uniswap, Maverick and Dackieswap. 

3. Liquidity provision

Users can provide liquidity on the Base blockchain through various DApps such as Uniswap, BaseSwap and Dackieswap. These DApps allow liquidity providers to earn fees from transactions in liquidity pools. 

4. Bridging

Base has developed an official bridge known as the Base Bridge that is compatible with the majority of Ethereum wallets, such as MetaMask or Coinbase Wallet. Users  are able to bridge ERC-20 tokens across Base and Ethereum. 

Bridging from Ethereum to Base usually takes a couple of minutes, whilst bridging from Base to Ethereum takes roughly 7 days. 

5. Launching DAOs

A Decentralized Autonomous Organization (DAOs) is a blockchain based organization characterized by community driven decisions and operated through smart contracts. Aragon, a protocol for creating DAOs, has introduced a no-code DApp on the Base network, simplifying the DAO creation process. 

Will There Be a BASE Token?

Base’s roadmap and official twitter bio state that they have no plans to issue a network token in the future.

However, projects may initially claim to have no plans for airdrops and execute an unannounced airdrop in the future. This is usually done to reward early supporters for contributing to the network and fostering a community.  

How to Connect to the Base Network and Use the Testnet?

Connecting to the Base network is fairly straightforward, and it can be done with the Coinbase wallet or any EVM compatible wallet. 

1. Connect to Base with a Coinbase wallet

To utilize Base with Coinbase Wallet follow the subsequent steps:

1. Launch the Coinbase Wallet browser extension and sign in to your account.

2. Connect to an application using Coinbase Wallet (in this example we will use BaseSwap).

3. Access the network selection menu by clicking the network symbol located in the top right corner.

4. Choose Base from the list.

5. The active network will now be set to Base.

2. Connect to Base with MetaMask

Users can connect to Base with numerous EVM wallets. Let’s see how to connect the Base network with the MetaMask wallet as an example.

1. Launch the MetaMask browser extension.

2. Access the network selection dropdown menu by clicking the dropdown button situated at the top of the extension.

3. Select the add network button.

4. Select add a network manually.

5. In the “add a network manually” dialogue box, input the following details for the Base Goerli testnet and click save:

6. You should now be able to connect to the Base network in the network selection dropdown section.

What Are the Benefits of Base Network?

The key benefits of using the Base network include the following:

1. Low-cost

Like other optimistic rollups, Base features low gas fees, designed to significantly reduce transaction costs and enhance transaction throughput. It achieves this by processing transactions off-chain and consolidating them into a single proof.

2. Accessibility

EVM-compatible chains, like Base, improve accessibility by enabling developers to easily deploy and leverage existing Ethereum-based tools, frameworks, and smart contracts across multiple platforms.

3. Scalability 

L2 scalability offers significant advantages by enhancing the capacity and transaction throughput of blockchain networks. This improvement addresses bottlenecks and reduces inefficiencies, ultimately providing quicker, more cost-effective solutions for users and developers.

What Are the Disadvantages of Base Network?

The primary limitations and concerns associated with Base are as follows:

1. Centralization 

One of the primary concerns around Base is the degree of centralization. Coinbase functions as the only sequencer node on Base, giving them considerable control over transactions. A sequencer node is a specialized node in a blockchain network responsible for sequencing and finalizing transactions in a specified order, improving transaction throughput. 

Having one sequencer node concentrates the power of transaction processing and ordering in a single entity. Additionally, this centralized authority has the ability to set and modify fees associated with the Coinbase Sequencer. Coinbase has hinted at the potential integration of third-party nodes in the future.

2. Long withdrawal periods 

One of the main limitations of the Base blockchain is the long withdrawal periods, which takes approximately 7 days. This delay is attributed to the design of Optimism's fraud-proof system, which permits users to challenge transactions and submit potential fraud proofs within this specified time frame. 

The long withdrawal periods could result in a suboptimal experience for users. 

3. Security

As a L2 built on the OP Stack, Base faces a set of security risks. The first concern relates to the efficacy of fraud-proof mechanisms as a security measure.. Fraud proof relies on the vigilance of network participants to monitor and challenge any invalid off-chain transactions before they are finalized on the main blockchain. 

However, this mechanism faces various challenges including reward incentive issues for participants and vulnerability to data withholding attacks. 

Closing Thoughts 

Base has gathered significant interest since its launch. It has hit a total of over one million users and over $385 million in total value locked (TVL) as of September 7, 2023. This incredible accomplishment places Base as the number 8 ranked chain in terms of TVL, overtaking popular blockchains such as Cardano and Solana. 

As the first blockchain launched by a publicly traded company, Base is opening up new possibilities to attract a broader audience and bring more users into the world of Web3. As the platform continues to grow and evolve, it remains essential for users and developers to evaluate and make informed decisions when engaging with Base.

Further Reading

Blockchain Layer 1 vs. Layer 2 Scaling Solutions

What Is Polygon (MATIC)?

Optimistic vs. Zero-Knowledge Rollups: What’s the Difference?

Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.