Base Social Protocol Kingdom: Massive Users and Billions of TVL Deposited from Consumer Applications

Written by: IOSG Ventures

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 that this is due to the support from various parties: the Cancun upgrade has L2 Fees are greatly reduced, which greatly reduces the cost of user interaction; backed by Coinbase, funds and user projects are fully supported and delivered, and Coinbase ventures and first-class funds are very active in investing in the Base ecosystem; achieving a win-win situation with the OP Superchain strategy;

• Base focuses on unique social and consumer applications, hoping to become a traffic grabber for capturing users. This article focuses on Base's social and consumer application ecosystem, and divides some of the more popular projects into social/ Communityand user loyalty management/art and NFT/casual games, and introduced some of its projects;

• Summary: The possibility of Base issuing coins under regulatory compliance is low.TokenThe ecosystem still prospers despite the incentives. With a good infrastructure background, Base's consumer applications and social ecosystem are expected to onboard more new users and achieve mass adoption.

背景: 坎昆升级与 EIP4844，L2 费用大幅降低

With the completion of the Cancun upgrade, L2 has benefited greatly from it. The most relevant proposal for L2 in the Cancun upgrade is the EIP4844 proposal. EIP-4844 introduces a new data storage structure: Blob, which is specifically used to store transaction data submitted by L2 to L1. After the introduction, L2's transaction data is directly submitted to Blob for storage, which can be fully downloaded by consensus nodes and deleted after only a short delay, reducing unnecessary storage burden. This means that the introduction of Blob will greatly reduce L2's transaction fees. At the same time, Blob is equivalent to additional block space 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 last part of Ethereum's "Quiet" phase upgrade).

The data availability provided on the Ethereum main chain is Calldata (which can be understood ascontractThe data generated in the transaction call) and the data returned by Layer 2 to Layer 1 are stored in Calldata.Safety, Calldata requires Gas for each step of execution, which results in a high Gas cost. However, the transaction data in Calldata is not very useful after verification. Long-term data can also be downloaded for verification, and it does not even need to be transmitted to the execution layer. Before the Cancun upgrade, taking the average transaction fee history of the OP chain as an example, nearly 80% of the fees came from L1 data fees. Taking the cost of interaction on the Base chain as an example, the gas fee of swap before and after the Cancun upgrade was reduced from US$0.59 to US$0.01, which is about 1.6% of the previous fee, and the gas fee of the sending function was reduced from US$0.178 to US$0.003, which is about 2% of the previous fee. EIP4844 reduces the cost of base to a level that can compete with solana when the network is relatively idle.

source: welovetheblobs.xyz

As the gas fee of L2 has been greatly reduced, the Base chain has seen a substantial increase in TVL and on-chain activities (the green dots in the figure are the time points when the Base mainnet was launched and blobs began to be used). In the past thirty days, the number of on-chain interactions has exceeded 64 million. Currently, its TVL has exceeded 500 million US dollars, a record high, making it the second largest L2 after OP and Arbitrum.

Source:https://l2beat.com/scaling/projects/base

Coinbase’s full support

Base is the L2 built by the Coinbase team, backed by the largest listedexchangeXiaobai Navigation, 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. Therefore, Coinbase only needs to build a chain to connect the Base chain and Coinbase. exchangeandwalletEcosystem. 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 with lower fees and faster settlement times without affecting the Coinbase user experience. Coinbase is happy to continue moving its business to the chain and hopes that other companies will follow Coinbase’s lead.”

Recently, Coinbase wallet推出了 AA 钱包（http://smart-wallet.xyz ），普通用户不再需要繁琐的操作步骤，可以直接用手机或者电脑设备、touchid、google 账户生成账户，并且还可以直接连接 Coinbase 账户，这为 Base 链的大规模吸引用户和资金奠定了基础。

Coinbase Ventures is also very active in investing in the Base ecosystem. 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 social networks in batches.defi Thanks to Coinbase's position in the industry and the network effect of Coinbase Ventures, many base ecological applications have also been sought after and favored by the primary market, such as Farcaster, FriendTech, etc., all of which have well-known capital support. Institutions such as Paradigm, a16z, Multicoin, DragonFly, Variant Funds, and 1confirmation are also very active in base ecological investment.

Superchain Strategy: Win-win with OP

The "Hyperchain" is an L2 network. The 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 and shares the sameSafetyBut 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 on which the application runs.

Base and OP have reached a win-win strategic cooperation:

• 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% Tokens of OP's total supply.

The Base chain built on OP Stack is currently maintained by Coinbase, which will be gradually decentralized in the future. According to DeFiLlama data, the Base chain's daily revenue is second only to Arbitrum in L2.

Source: https://dune.com/niftytable/rollup-economics

In the short term, this cooperation will help upgrade the Optimism mainnet, Base and other L2s to an initial super chain structure with shared bridging and sorting. In the future, more L2s will inevitably be incorporated into the "super chain" ecosystem; in the long term, the "super chain" can develop into a huge network that maximizes interoperability, shares decentralized protocols and standardizes its core primitives, which will facilitate the flow and development between chain abstractions and ecosystems.

Farcaster leads a sustainable social universe

Farcaster is a decentralized social network protocol that aims to establish direct connections between users, while developers can access public data without permission, support diverse and flexible client and application development, encourage innovation and experimentation, and provide users with rich social experiences and choices. Farcaster manages user identities on the chain based on Ethereum and OP, but stores messages and posts in the Hub network off-chain to increase speed and reduce costs. As an open social protocol, Farcaster allows a variety of applications to be built on it. Currently, Warpcast is the most popular client on Farcaster. Frames is a newly developed function similar to embedded applets, which allows developers to embed interactive experiences in Farcaster posts (casts). These interactive experiences can range from voting, casting NFTs to building games, and even integrating instant transaction checkout links directly in social media dynamics, meeting the needs of diverse social platforms.

作为 Base 生态的重要组成部分，Farcaster 开放的协议之上衍生出了诸多产品，比如创作者平台 Paragraph，内容金融化客户端 Jam，社区任务平台 Bountycaster，开发者工具 Neynar 等。

Source: @vahidsuperstar

In addition to top-down project construction, Farcaster also has a strong meme culture and wealth-creating effect, which undoubtedly plays a great role in attracting users and enriching the ecosystem. Take $Degen, the leading meme on Base, as an example. It has already gone beyond the scope of primary memes and plays an important role in the entire social ecosystem of Base: $Degen was originally born from the top social protocol Farcaster, and airdropped rewards to active users of the /degen channel. With the launch of the mini-program function by Farcaster and the opening of registration for the Warpcast client in February this year, the number of users has surged, and $degen has also gained more attention. The first airdrop issued a total of 15%. Currently, users can still obtain rewards by being LPs on Uniswap, participating in the meme competition on Farcaster, and accepting rewards. The team raised an angel round of 490.5eth, and individual investors were mainly Ethereum og, led by 1confirmation. The team website revealed that Degen also built its own L3, using $degen as the basisToken, the current market value of $degen is $1.24b.

A trend worth noting at present is that many emerging projects in the base ecosystem use $degen as project functional tokens, relying on the huge flow of $degen holders to achieve the cold start of the project. For example, perl_xyz rewards $degen to users who play games daily. Users can withdraw/deposit $degen in the app or convert it to $perl. The project also received an ecological reward of 10m degen. drakulaapp, Web3 Tiktok, or the video version of FriendTech, received 20 million degen incentives to reward creators on the application. The price of each creator is quoted in $degen. Superfluid_HQ developed a framework called StreamYoink, which also uses degen payment. BracketHQ is a sports lottery game where users can trade votes for sports teams in various sports leagues (NFL, NBA, NCAAB, etc.). http://Rounds.wtf initiated by Nouns also uses $degen as a token.

With the development of base and Farcaster, it is obvious that degen will gradually grow from a meme to an indispensable part of the social graph. A healthier meme culture atmosphere will also contribute to the long-term healthy development of the ecosystem.

Other social products: many innovative attempts

In addition to Farcaster, there are many innovations and attempts in social products on Base, such as the popular Friend.Tech, which has received nearly 30 million US dollars in fees in the past six months, and its current TVL is still nearly 40 million US dollars. Friend.tech is a decentralized social application based on the Base chain, which combines fan economy and on-chain gaming. Users purchase tokens "KEY" to enter specific rooms to browse content. The increase in the number of users' purchases will push up the price of the key, and the fees collected during the buying and selling process are evenly distributed to the platform and the room owner.

Due to high transaction fees, a strong speculative atmosphere, and a poor product experience, FriendTech's trading activity has dropped significantly over a period of time. This is also an issue worthy of reflection in the social financialization.

Other recent popular sofi projects include Web3 Tiktok Drakula and live streaming platform Unlonely. Drakula is a Web3 short video publishing platform where users can upload and publish their own videos or watch other people's videos. Platform points Drip can be obtained by making videos, sharing invitation links, completing platform tasks or buying tokens from other creators, and can also be used to reward other creators. Similar to FriendTech, creators on the platform have their own tokens, which are denominated in Degen and the more popular the creator, the higher the unit price of the token. Users can view the most popular creators on the platform (the token price is higher and the rewards received are more).

Unlonely is a Web3 live streaming platform where users can choose to create their own live streaming channels or watch other people's live streaming. The platform's token is $VIBES, and users can purchase vibes for rewards. Users can view the calendar of upcoming events on Unlonely, search for anchors, watch live streaming replays, etc.

Community Management and User Loyalty

Along with social projects, community management and user loyalty projects have also emerged and developed, such as Blackbird, a $24 million loyalty and membership platform that aims to create a deeper connection between restaurants and their most loyal customers. Blackbird allows customers to create NFT memberships for restaurants they frequent. These NFTs can unlock various rewards, such as earning $FLY tokens, SMS butler services, and "kitchen surprises" during meals. This approach provides diners with new levels of engagement and value. Blackbird is decentralizing restaurant loyalty programs. It allows users to earn points that are not limited to a single system; users can then flexibly trade $FLY tokens and members' accumulated NFTs on the chain. The system provides customers with a more flexible and valuable form of reward, representing a shift from traditional loyalty programs.

Projects such as QuestN provide some help for project advertising and promotion. Project parties can publish tasks and tests through QuestN to achieve better promotion, deepen users' understanding of the product, and provide a basis for user rewards.DAO It is a community crowdfunding platform where users can initiate project proposals, conduct crowdfunding, and discuss with interested builders in the discussion room to promote the development of the project.

• NFT and Art

As Jesse, the head of Base, said, Onchain is the next online. Base is committed to putting artworks and creative content on the chain. Zora is also an NFT creation and distribution platform, providing creators with many tools and building its own chain. Thanks to the active base ecosystem, Zora's TVL has increased significantly. Creators can also choose to issue their own projects on NFT casting platforms such as manifold and rarible. The number of NFT transactions on Base has also increased significantly in the past two months, with an average daily transaction volume of hundreds of thousands to millions of US dollars, and an average daily transaction address of nearly 10,000.

Source: https://dune.com/k0rean/base-nft-market

• Casual Games

Unlike other public chains that pursue 3A/high TPS games, Base seems to be more interested in mobile casual games. For example, Frenpet is an electronic pet casual game. As a pet cultivation game based on the Base chain, players can purchase props by purchasing Fren Pet's token FP, and earn points by feeding pets and fighting other players' pets. The higher the points, the higher the ranking on the leaderboard, and the more ETH rewards you get. In terms of communication, Fren Pet generates social fission through the invitation system. The referrer can obtain 10% of all FP spent by the invitee in the app, thereby achieving new customer acquisition and activation with zero customer acquisition cost. Therefore, the game is also called "FriendTech version of chain game". A handling fee of 4% will be charged when trading FP tokens, of which 2% will be awarded to players, 1% to the team, and 1% to LP. At present, there are about 8k cumulative users, and the token Fren Pet has a market value of 70 million US dollars.

Source: https://dune.com/whale_hunter/fren-pet

Sofamon, a Telegram sticker financialization platform, is currently working on a personal chat sticker market on Telegram, where users can manage their own sticker collections, invite friends, access Sofamon's private group chats, etc. Similar to Friend.Tech, each sticker accessory has a price curve. The earlier the buyer, the lower the price. After subsequent buyers enter and push up the price, they can sell it to make a profit. Shortly after going online, Sofamon's transaction volume has approached 7,000 ETH, and the protocol income is also close to 300 ETH.

Source: https://dune.com/garythung/sofamon

• 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 with $18 million in financing, 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 through traditional accounts such as Google and Apple ID. web3 The application automatically generates encrypted wallet addresses, greatly reducing the user's usage threshold.

• Meme

Meme has become an integral part of social and consumer applications. The current status of meme coins is highly controversial because its culture is a mechanism that advocates (similar to) gambling. However, imitating online behavior is a very popular entertainment tool on the Internet. The airdrop of the Farcaster channel gave birth to multiple memecoins with a market value of over 10 million US dollars, and the spread and development of these memecoins feed back to the entire social ecosystem, making users more active. It can be concluded that meme has become an important means of launching communities and projects.

As Kinjaal Shah, an analyst at Blockchain Capital, said, “Although it is still in its early stages and has not yet formed its final form, a web3 Toolkits for creator services are gradually emerging. For example, mechanisms like points and airdrops reward the use of the protocol. In terms of airdrop design, we still have a lot of room for improvement before maturity, such as restrictions on whitelists and release mechanisms, which have the potential to give birth to more specific reward mechanisms. Further drive its growth through existing communities, on-chain referral rewards, and "token social proof." Pantera partner Paul Veradittakit also expressed his love and optimism for memecoin: "I know very well that Memecoin will not disappear. I see the next generation seeing Memecoin as a very interesting social activity. Although Memecoin looks like a toy, it iscryptocurrencyThey are the easiest way for the next generation to experience the latest DeFi applications and introduce them to Web3.”

Conclusion

Social and consumer applications are undoubtedly the most promisingBlockchainIn terms of large-scale 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 an 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.

The article comes from the Internet:Base Social Protocol Kingdom: Massive Users and Billions of TVL Deposited from Consumer Applications

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