One of the main challenges Ethereum is facing are scalability issues such as high gas fees and slow transaction speeds as it continues to onboard more users.
In response, Layer-two blockchains such as Base have emerged to offer more efficient, faster, and cheaper alternatives, all while leveraging the underlying security and infrastructure of Ethereum.
In this beginner guide, we'll explore Base’s key features and highlight the network’s growing application ecosystem.
The rise of Layer-2 blockchains
When Ethereum became the go-to blockchain for decentralized finance (DeFi) and non-fungible tokens (NFTs), it routinely encountered network congestion, resulting in high gas fees and slower transaction times—leading to a lot of frustrations. This is why Layer-two (L2) blockchains have increasingly gained popularity.
Essentially, a Layer-two blockchain is a secondary network built on top of Ethereum. It processes transactions offchain or in batches, then settles them on Ethereum—preserving the security of Ethereum while reducing network congestion and enhancing performance.
This blend of security and performance makes Layer-two solutions essential for scaling the Ethereum ecosystem and enabling mass adoption.
What is Base?
Launched in 2023, Base is a Layer-two blockchain developed by Coinbase and built on Ethereum's optimistic rollup technology.
Some of Base’s key features include:
- Ethereum compatibility: Base is fully compatible with the Ethereum Virtual Machine (EVM), which means that developers can easily port their Ethereum applications to the network without needing to rewrite code. This opens the door for Ethereum developers to expand their reach and tap into Base’s growing user base.
- Low fees and high throughput: Compared to Ethereum, Base is able to dramatically increase throughput and reduce transaction fees due to its optimistic rollup technology—making it an ideal network for applications that require frequent, low-cost transactions.
- Network security: Since Base is built on Ethereum, it leverages the network's infrastructure, which is battle-tested and trusted by millions of users and developers worldwide.
- Interoperability: Base is interoperable with other Ethereum-based Layer-two solutions and networks, ensuring smooth interaction between different chains and platforms within the broader Ethereum ecosystem.
That said, Base faces strong competition from other Layer 2 solutions with established or emerging ecosystems.
Who are Base's competitors?
Base has entered a competitive landscape, which includes well-established brands such as Optimism, Arbitrum, Polygon, and Blast:
- Polygon, initially known as a sidechain solution, has evolved into a fully-fledged Layer-two network with a well-established ecosystem that supports major DeFi, NFT, and gaming projects, as well as prediction markets such as Polymarket.
- Arbitrum benefits from early-mover advantages in the Layer-two space, having attracted a strong developer base and user community, as well as many prominent DeFi projects such as GMX.
- Optimism is another prominent L2. With a large and growing number of DeFi applications and dynamic developer ecosystems, the network poses a strong competitive challenge to Base.
- Blast is a newer entrant in the L2 landscape, but it is quickly gaining traction. In particular, the network’s emphasis on improving the developer experience makes it an emerging competitor to Base.
Despite facing tough competition from other Layer-two solutions, Base is carving out its own niche with a growing ecosystem focused on DeFi, NFTs, gaming, and SocialFi.
The Base ecosystem
Base offers a growing ecosystem for NFTs, gaming, and SocialFi (e.g. friend.tech), but it's true strength lies in DeFi.
The network hosts a growing ecosystem of DeFi platforms, providing numerous opportunities for trading, lending/borrowing, farming, and staking:
- Aerodrome and Uniswap (DEXs): Both Aerodrome and Uniswap are decentralized exchanges (DEXs) that leverage an AMM model. Simply put, these platforms enable you to access liquidity across multiple pools and swap tokens with low fees.
- Aave and Morpho (Lending/Borrowing): Aave and Morpho are decentralized lending/borrowing platforms where you can lend and borrow crypto assets with improved rates.
- Extra Finance (Leveraged Farming): Extra Finance is a decentralized platform that offers features such as leverage farming, market-neutral farming strategies, and LP rebalancing.
- Beefy (Yield Aggregator): Beefy helps you maximize your profits by automatically compounding yields from various DeFi protocols—unlocking higher returns.
While Base's ecosystem is flourishing, Coinbase is already looking ahead with plans to firmly establish the network in the growing onchain economy.
What’s next for Base?
Coinbase has ambitious plans to scale and develop Base and its associated ecosystem.
Future enhancements include:
- Increased decentralization: While Base currently benefits from Coinbase’s infrastructure, plans are underway to gradually decentralize the network and reduce reliance on a single entity for security and governance.
- Interoperability with other L2s: Coinbase is working to make Base more interoperable with other L2 solutions, ensuring a seamless experience for users and developers across various platforms.
- Partnerships and ecosystem growth: Coinbase also aims to foster partnerships with other blockchain projects, applications, and developers to enhance Base’s ecosystem. This includes expanding DeFi offerings, NFT marketplaces, and gaming applications.
As Coinbase works to expand Base’s footprint, Phantom’s Base support will make it even easier for users to gain access to its ecosytem of DeFi, NFTs, and gaming.
Getting started on Base with Phantom
Our Base support makes it easy for you to use your Phantom wallet to interact with Base’s ecosystem, just as you already with Solana, Ethereum, Bitcoin, and Polygon.
Additionally, our Crosschain Swapper allows you to swap tokens between Base, Ethereum, Solana, and Polygon with ease, offering a streamlined experience for those looking to transfer assets between different ecosystems.
Phantom offers browser extensions for Firefox, Chrome, Brave, and Edge, as well as apps for iOS and Android to get started on Base.
- First, download Phantom. Then, create a new wallet.
Once you do that, you're ready to go.
How to bridge tokens to Base with Phantom?
If you already have a Phantom wallet and would like to bridge funds to Base, use our very own Crosschain Swapper. With our Crosschain Swapper, you can bridge tokens across Base, Ethereum, Solana, and Polygon right in your Phantom wallet.
Here’s how:
Disclaimer: This guide is strictly for educational purposes only and doesn’t constitute financial or legal advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
