Author: defioasis, Wu said

Since its launch at the end of July, Base, an L2 network based on Optimistic Rollup built by Coinbase, has accumulated $7 million in transaction fees, exceeding most L2 networks in the same period; the on-chain TVL exceeds $540 million, almost equal to the sum of zkSync Era and StarkNet, becoming the third largest L2 network after Arbitrum and Optimism. As a public chain with minimal airdrop expectations, it takes less time and achieves greater success than public chains driven by potential airdrop farming. In this big pattern of one-click chain launch and relying on potential airdrops, Base's experience seems to show us another possibility for the development of public chains.

Looking back at the past three months, Base has experienced at least four major events that are worthy of being recorded in history.

(1) No pre-promotion, relying on Memecoin to ignite social media

At the end of July, the Base mainnet was quietly launched, but the public learned the news not through official media announcements, but from the heated discussions on the huge increase in the price of Base's first Memecoin BALD on different social accounts and communities. On the evening of July 30, a total of about 25,000 ETH was deposited in the Base network, of which more than 10,000 flowed into the BALD/WETH liquidity. More than half of the funds on the entire network flowed on this Memecoin, showing a strong ability to attract money.

At that time, the market value of BALD was close to 100 million US dollars, with an increase of more than tens of thousands of times. However, in the huge increase, the development team lost themselves and withdrew a large amount of liquidity on the second day, causing BALD to fall sharply, which was tantamount to a provocation to most of the users of this new network. What followed was a massive search on social media for the identity behind the BALD deployer team, who were believed to be closely related to the bankrupt FTX/Alameda, or even SBF himself. Although it ended dismally, BALD undoubtedly brought huge exposure to the newly born Base.

(2) Venture capital supports super applications, surpassing public chains

The failure of BALD and the collapse of other Memecoins driven by BALD briefly labeled Base as having a worrying ecological quality, until the emergence of the super social application friend tech a week later. It was tied to Twitter, relied on the novel personal social value buying and selling relationship, and the invitation system to quickly become popular in major communities, and it was once difficult to find a code. On August 10, the number of Base network daily active users exceeded 100,000 for the first time, reaching 136,000, of which 42,000 were new users.

However, the simple functions and poor user experience caused users to quickly leave after a short moment of excitement. However, just when people thought that it would quietly exit the stage of history, friend tech returned with a high-profile financing of the crypto venture capital paradigm seed round, and with the first round of points issued for potential airdrops, the users who had originally exited quickly returned and set off a trend on social media again, attracting more new users. The participation of celebrities such as Chen Jiaxing, president and CEO of the famous startup incubator Y Combinator, and FaZe Banks, founder of the American e-sports club FaZe Clan, as well as the exponential growth of friend tech MEV robots, have brought more high-quality traffic and word of mouth to this young social network friend tech and the new public chain Base.

Base's achievements in the L2 network are already excellent enough, but the Base-based application friend tech has far surpassed the Base network itself. DeFiLlama data shows that as of September 27, Base captured $1.93 million in September and revenue reached $1.06 million; while friend tech captured $21.74 million in fees and revenue reached $10.87 million during the same period, ten times that of the Base network itself, becoming a super application protocol that can be compared with Bitcoin, Uniswap, etc. At present, friend tech's active users account for about 25%-30% of the Base network, and transaction gas consumption accounts for about 20%-40% of the Base network, which is enough to show the influence of super applications on public chains.

Source: https://dune.com/21co/friendtech-analysis

(3) DeFi flywheel helps TVL reach a new level

On August 31, Optimism's largest DEX protocol Velodrome deployed a new forked DEX called Aerodrome on the Base network. Less than two days after its launch, Aerodrome TVL once reached 200 million US dollars, accounting for 50% of the entire Base TVL. Aerodrome inherited Velodrome V2 and improved the defects of Solidly Ve (3, 3).

The Aerodrome team provided nearly 7% of AERO emission incentives to the AERO-USDC LP Pool by controlling veAERO. However, when the token was launched, the circulation of AERO was small and the overall size of the LP Pool was small. The high LP returns attracted liquidity providers to buy a small amount of AERO in the market, further increasing the scarcity and driving a sharp rise in the price of AERO. The price increase, in turn, allowed liquidity providers to obtain higher returns, forming a positive flywheel, thereby attracting a large amount of external liquidity to the Aerodrome protocol and the Base network in a short period of time.

Source: https://www.wu-talk.com/index.php?m=content&c=index&a=show&catid=47&id=17856

Although AERO has fallen into and has not escaped the negative feedback spiral of ve (3, 3) over time, and Aerodrome TVL has fallen by more than 50% from its peak, it still has a locked value of $97 million, making it the largest DeFi protocol on the Base network, accounting for about 18%. Velodrome on Optimism has already dealt with the negative feedback spiral of Ve (3, 3), which is to increase the lock-up rate through the OP incentive of the Optimism Foundation. Whether this method can be applied on the Base network without token incentives is worth keeping an eye on.

(4) Create a precedent for OP Stack and share revenue with Optimism Collective

In order to ensure that the open source OP Stack and the announced products that support Base receive sustainable funding, thereby creating a virtuous cycle within the ecosystem, on August 25, Base announced a deep cooperation with Optimism Collective, and will contribute 2.5% of the total revenue of Base sorters to Optimism Collective, or contribute 15% of the profits Base earns from L2 transactions to Optimism Collective after deducting the cost of submitting data to L1, and the two choose to share the higher income. Base will also actively participate in the governance of Optimism Collective. As part of its contribution, Base will have the opportunity to earn up to 2.75% of the OP supply for the next 6 years, and promise that its voting rights in Optimism Collective will not exceed 9% of the total voting supply at any time. This undoubtedly sets a precedent for the L2 network based on OP Stack to achieve deep ecological binding with the builder Optimism, which may accommodate more OP Stack-based networks to share revenue with Optimism in the future, thus forming a huge pan-OP Stack ecosystem.

Thoughts on the development of Base

(1) On-chain marketing will become the best marketing method in the future

Marketing methods need to guide users to the next link and finally achieve the target conversion. The discovery of the Base mainnet did not come from official marketing, but from the tracking of on-chain data by countless on-chain detectives in the community, the pursuit of on-chain wealth effects, and the use of social influence to radiate to more ordinary users. BALD is a model of on-chain marketing. The on-chain detectives first noticed the informal opening of the Base mainnet, the birth of the first on-chain token, and the FOMO of funds pouring into Memecoin. Through community and social influence, they gradually attracted user attention and injected funds into the Base network, and finally brought a grand increase to players in less than 1 day. If it is just the usual official marketing discourse, flooding L2, for a network with almost no airdrop expectations, it must be difficult to give birth to such a lovable Memecoin, and it is also difficult to bring such a huge traffic to the network launch.

(2) Building super applications for the Internet

Although friend tech's high fee collection and value growth curve model are criticized, it is still undeniable that friend tech has created a unique social track, that is, turning the social data owned by users into tradable social assets. With the support of the new model, friend tech has attracted investment from paradigm, which is good at betting on innovative branch tracks, and further attracted social big Vs, celebrities, etc. to settle in. In addition, the point incentive system for potential airdrops learned from Blur, another investment of paradigm, and the continuous improvement of functions have formed a sustainable positive growth of the application, which will ultimately benefit the Base network itself. With the super application, Base has shifted users' pursuit of airdrops from the network to network applications, achieving a win-win situation for all three parties.

The fate of friend tech and Base does not seem to be accidental. As early as in March this year, when the social application Stealcam built by friend tech founder Racer was launched, it was highly praised by Base's chief core developer Jesse Pollak on social media, which may have laid the groundwork for the birth of friend tech in the Base network.

(3) From the competition among public chains to the cooperation among public chains

There seems to be a significant competitive relationship between most public chains, such as the orthodoxy dispute between EVM chains and non-EVM chains, the expansion road dispute between rollups and Validiums and Optimiums, and the L2 dispute between Arbitrum and Optimism. The battle for the leading position, etc. Different from various public chains with the halo of luxury VC and huge financing, Base has a much lower profile. The cooperation with the Optimism ecosystem breaks the "hostile" prejudice between L2 and absorbs the Fork from Optimism's largest DEX to become Base is the largest TVL protocol, pioneering revenue sharing to Optimism and extensive participation in governance. The cooperation between Base and Optimism may bring more 1+1>2 effects in the future.