Original IOSG Ventures IOSG Ventures 2024-04-22 21:16 Guangdong
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Special Thanks: Thanks to Fiona, Ray, Jocy, and Mitu for their valuable suggestions on revising this article!
TL,DR:
Background: Base's recent on-chain data and ecology have seen significant growth. We believe this is due to the help from various aspects: the Cancun upgrade has significantly reduced L2 fees, which has greatly reduced user interaction costs; backed by Coinbase, the funds and user projects are fully supported and delivered, and Coinbase ventures and first-class funds are very active in investing in the Base ecology; and the OP Superchain strategy has achieved a win-win situation;
Base has placed its focus on unique social and consumer applications, hoping that it will become a traffic grabber for capturing users. This article focuses on Base's social and consumer application ecosystem, divides some of the more popular projects into multiple categories such as social/community and user loyalty management/art and NFT/casual games, and introduces some of its projects;
Summary: Base is less likely to issue tokens under regulatory compliance requirements, and has achieved ecological prosperity without using token incentives. With a good infrastructure background, Base's consumer applications and social ecosystem are expected to onboard more new users and achieve mass adoption.
Background: Cancun upgrade and EIP4844, L2 fees are significantly reduced
With the completion of the Cancun upgrade, L2 has benefited greatly from it. The most relevant thing to L2 in the Cancun upgrade is the EIP4844 proposal. EIP-4844 introduces a new data storage structure: Blob, which is specially used to store transaction data submitted by L2 to L1. After the introduction, L2 transaction data is directly submitted to Blob for storage, which can be fully downloaded by the consensus node and can be deleted after only a short delay, reducing unnecessary storage burden. This means that the introduction of Blob will greatly reduce L2 transaction fees. At the same time, Blob is equivalent to additional block space expansion for L2, and L2 transaction throughput will also be significantly improved. EIP-4844 is essentially a transitional upgrade to prepare for the future to achieve full Danksharding (the final part of Ethereum’s “quiet” phase upgrade). The data availability provided on the Ethereum main chain is Calldata (which can be understood as the data generated in contract transaction calls), and the data returned by Layer 2 to Layer 1 is stored in Calldata. In addition, for the sake of security, each step of Calldata requires Gas. This results in a large gas cost. However, the transaction data in Calldata actually does not have much use after verification. Long-term data can also be downloaded and verified, and does not even need to be transmitted to the execution layer. Before the Cancun upgrade, take the average transaction fee history of the OP chain as an example. , nearly 80% of the charges come from L1 data charges. Taking the cost of interaction on the Base chain as an example, the gas cost of swap before and after the Cancun upgrade was reduced from US$0.59 to US$0.01, approximately 1.6% of the previous cost, and the gas cost of the send function was reduced from US$0.178 to US$0.003, approximately US$0.003. 2% of the fee. EIP4844 reduces the cost of base to a level that can compete with Solana when the network is relatively idle.
Coinbase’s comprehensive support
As the L2 built by the Coinbase team, Base is backed by the largest listed exchange in the United States and has unique advantages in all aspects. One of the biggest advantages of the Base chain is that it is backed by Coinbase's huge user base and strong asset accumulation. Then Coinbase only needs to build a chain to connect the Base chain and the Coinbase exchange and wallet ecosystem. On March 27, Max Branzburg, vice president of Coinbase, posted on social media that "In the future, Coinbase will store more corporate and customer USDC balances on Base. This enables Coinbase to manage and protect customer funds at lower fees and faster settlement times without affecting the Coinbase user experience. Coinbase is happy to continue to move its business to the chain and hopes that other companies will follow Coinbase's example." Recently, Coinbase Wallet launched the AA wallet (http://smart-wallet.xyz). Ordinary users no longer need cumbersome operation steps. They can directly use mobile phones or computer devices, touchid, Google accounts to generate accounts, and can also directly connect to Coinbase accounts, which lays the foundation for the Base chain to attract users and funds on a large scale. Coinbase Ventures is also very active in investing in the Base ecosystem, and many projects in its portfolio choose to build the ecosystem on the Base chain. The Base Foundation is also very active, investing in and incubating dozens of projects in various fields such as social networking and DeFi. Thanks to Coinbase's position in the industry and the network effect of Coinbase Ventures, many Base ecosystem applications have also been sought after and favored by the primary market, such as Farcaster, FriendTech, etc., all of which are supported by well-known capital. Institutions such as Paradigm, a16z, Multicoin, DragonFly, Variant Funds, and 1confirmation are also very active in investing in the Base ecosystem.
Superchain Strategy: Win-win with OP
"Hyperchain" is an L2 network, and OP Chain is a single chain in the hyperchain. Regardless of its specific attributes, if it is formally managed by the Optimism Collective, it is considered an OP Chain and is therefore part of the hyperchain, sharing security, communication layers, and open source technology stacks with each other. But unlike multi-chain designs, OP Chain is standardized and designed to be used as an interchangeable resource, which will enable developers to build applications that target the entire hyperchain and abstract the underlying chain that runs the application. Base has reached a win-win strategic cooperation with OP:
Base promises to contribute 2.5% of Base sorter's total revenue to OP. If it exceeds 2.5%, 15% of Base's total profit will be directly contributed to OP.
In return, OP allows Base to participate in ecosystem construction and has the "opportunity" to obtain 2.75% of OP's total token supply.
Farcaster leads a sustainable social universe
Other social products: many innovative attempts
Community Management and User Loyalty
NFT and Art
casual games
On ramp and wallet
Most consumer applications or social projects also pay great attention to the threshold of user registration and use, and have improved and optimized the user experience to a certain extent. Privy, a wallet solution that has raised $18 million, aims to solve the contradiction between the poor user experience of multiple wallets and the privacy risk leakage of integrated login through the Web3 solution. Users can log in to the web3 application through traditional accounts such as Google and Apple ID and automatically generate an encrypted wallet address, which greatly reduces the user's usage threshold.
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Conclusion
Social and consumer applications are undoubtedly the most promising direction for large-scale blockchain applications. From the current development, we believe that the Base ecosystem is in a leading position. The Cancun upgrade has significantly reduced L2 fees, almost eliminated gas friction, and greatly reduced user interaction costs, which can better meet the needs of consumer applications for high-interaction and low-gas infrastructure. Many applications have achieved high incomes relying solely on transaction fees. As L2, Base has unique advantages and community tastes, which makes Base have the potential to attract a large number of new users and achieve large-scale adoption. More and more users are expected to join the Base ecosystem and achieve the goal of Mass Adoption.
Reference：
https://dune.com/cs-research/base-mainnet-bridge-activity
https://foresightnews.pro/article/detail/56194
https://www.theblockbeats.info/news/49785
https://unchainedcrypto.com/3-reasons-why-layer-2-network-base-has-more-than-doubled-its-total-value-locked-this-year/
https://www.chaincatcher.com/article/2088168
