Behind Base's crazy "money-making", what is the "lever" to drive value growth?

Produced by | OKG Research

Author: Jason Jiang

A large amount of funds are flowing into Base. On-chain data shows that Base has the largest on-chain capital inflow in the past month, with a net inflow of US$750 million, far exceeding Solana in the same period (about US$300 million). At the same time, other indicators are also rising: Base's daily transaction volume has exceeded 11 million transactions, and it has facilitated more than 1 billion on-chain transactions. The number of active addresses per week has also increased 20 times compared to the beginning of the year, surpassing Arbitrum to become the ecosystem with the highest TVL. L2 project.

Hot projects on the Base chain (Source: OKLink)

Base's success is due to its ability to capture hot spots and create "explosive products", but it is also inseparable from the support of Coinbase behind it: Base can easily integrate various products, users and tools in the Coinbase ecosystem, allowing developers to quickly build on-chain applications with these, and reach more than 100 million users and a large amount of assets, allowing more users and assets to complete the migration. This is the basic foundation for Base's development, and it is also its advantage compared to otherL2的天然优势。如今，越来越多像Base这样“有人撑腰”的项目，正陆续加入L2的“战局”。

Will the next Base emerge from these “backed” L2s?

The liquidity segmentation and intensified competition for existing assets brought about by excessive infrastructure construction have led to endless criticism and pessimism about L2, but this has not stopped the enthusiasm of new entrants. Many institutions are still joining the L2 "battle": the old DeFi project Uniswap launched its own L2 project Unichain; Web2 technology giant Sony also announced the launch of the L2 network Soneium... While the battle for liquidity has not yet ended, a new wave of competitors with considerable background and attention is here.

Compared with the old L2 projects, these new entrants are somewhat "different".

Early native L2 projects represented by Arbitrum and Optimism are all aimed at solving technical and performance defects in Ethereum, rather than application problems. These projects meet the market's application needs for the main chain with lower Gas and higher TPS.The prerequisite for success is that the main chain is active enough: only when the main chain is used frequently can the advantages of L2 be reflected and the value be realized.However, Ethereum has been plagued by internal and external troubles. Although its absolute data is still leading, its growth has lagged far behind Solana and others. As a result, even if the L2s that rely on Ethereum have deep "internal strength", they cannot display their strength.

On the other hand, new entrants into the L2 market, whether it is Base, which was launched in August last year, or Uniswap or Sony this year, either have their own applications and traffic, or have huge room for imagination in connecting to Web2 scenarios.They are not too dependent on Ethereum in terms of traffic, scenarios and ecology, and have no intention of replacing Ethereum. They are just more concerned about how to "monetize" existing L2 technologies to optimize and improve their own application landscape and gain greater competitive advantages.

The reason why these projects choose L2 is that the modular rollup infrastructure has begun to bear fruit. Platforms such as OP Stack have greatly reduced the technical threshold for deploying L2. One-click chain issuance is becoming a reality, and there is no need to guide the establishment of a new consensus network. It is a more cost-effective technical choice. In addition, the success of Base also proves that L2 projects do not rely onTokenThe financial incentives generated by the system can also operate healthily, have obvious advantages in terms of legal compliance, and may also be more attractive to many institutions.

The second half of the battle begins. How to leverage the value of L2?

Today's criticism and pessimism about L2 are superficially due to the market performance being lower than expected, but the fundamental reason is that there is a clear mismatch between the speed of technological iteration and application innovation in this cycle.It's like going to great lengths to build a highway, only to find out that there aren't many cars on the market and everyone is still riding bicycles. At this point, the value of the highway certainly cannot be reflected.

How to solve this problem? The most effective way is to accelerate the construction of applications in the L2 ecosystem, reduce or even eliminate the time mismatch between the two, so that the demand for infrastructure can be tightened again, and the market can enter a positive cycle of "infrastructure-application-infrastructure", thereby leveraging the value lever of L2.

As Sota Watanabe, Director of Sony SBL and Founder of Astar Network, said,Due to the lack of general user touchpoints and their feedback, the Web3 industry has historically been left to make products for itself."However, with the business and resource advantages of Sony and other institutions, the infrastructure and applications of the Web3 industry are expected to get rid of the embarrassment of "self-entertainment" and become applications that solve practical problems and meet real needs, bringing the benefits of Web3 technology to a wider range of Web2 users.

At the Ethereum Developer Conference in July this year, Vitalik also said that "the biggest theme of the Ethereum ecosystem in the next decade is applications." Today, these new L2 entrants come with applications and go for applications.While most native L2 projects are still continuing to roll out "technical narratives", new entrants have been trying to build "toll stations" on existing L2 highways and direct more "vehicles" onto the road.

As L2 technology develops and matures, the L1 main chain may be getting further and further away from ordinary users, and L2 will become the main gathering place for users and applications on the chain.Xiaobai Navigation According to research, more than 90% of Ethereum transactions have taken place in the L2 network. In the future, more institutions, especially Web2 institutions, will choose L2 as a choice to build on-chain applications and participate in the Web3 ecosystem.

In this process, a battle for the second half of L2 around applications may begin.This time, we need to compete not only in "technical skills", but also in resources and scenarios.These new L2 forces, which are backed by institutions and have their own traffic and scenario advantages, may be more likely to bring surprises on the application side than those old projects that have been fighting for a longer time, thereby leveraging the value "leverage" brought by L2 innovation.

If virtual asset spot ETFs allow more investors to have asset allocation options in the Web3 era, then L2 may provide Web3 technology "leverage" to more institutions, allowing Web3 to not only serve Web3, but also leverage the Web2 market and spark more applications.

*The content described in this article is only for market observation and trend analysis and should not be regarded as specific investment advice.

The article comes from the Internet:Behind Base's crazy "money-making", what is the "lever" to drive value growth?

Related recommendations: What is the main theme of this round of crypto bull market?

PayFi connects the real world.AI Agent enhances the world on the chain. Written by: Lao Bai I feel that the new main line of this round is beginning to become clear, that is, PayFI AI Agent Meme It just so happens that the last round also had three main themes: Defi, NFT, and X2Earn. Let me briefly explain why these three are the biggest themes in this round…