Notum logo

Blog

All

DeFi

Blockchain

How-to Guide

Tokens & Coins

Product Updates

Announcements

Lending

Trading

Staking

Crypto

Guide to Base Network: Key Features and Benefits

By Notum

Aug 01, 20246 min read

image

What Is the Base Network?

Base is an Ethereum L2 blockchain that was designed to run on top of existing Ethereum’s layer 1 blockchain. This low-cost layer 2 solution was created to make the Ethereum blockchain more scalable and efficient, offering users low fees and fast transactions.

Important! Base was launched on August 2023 by Coinbase, world-famous crypto exchange.

Since Base layer 2 aims to be a decentralized and permissionless platform, it supports numerous dApps and smart contracts. Moreover, Base allows users to build various projects such as DEXs, bridges, stable coins, NFTs, lending and borrowing platforms, games, etc. The main purpose of this L2 is to make Ethereum accessible to everyone. Moreover, Base is truly a builder-friendly platform, as it offers a number of tutorials on smart contracts, nodes, NFTs, cross-chain, oracles, and more.

Interesting fact! The Base project was created in a partnership with the Ethereum L2 Optimism blockchain based on the OP Stack.

What Is Layer 2?

Layer 2 is a set of solutions designed to run on top of the underlying blockchain network (Layer 1) in the Ethereum network. These solutions, also known as secondary protocols or frameworks, have several main goals, namely - to improve the scalability, transaction throughput, and efficiency of the layer 1 blockchain, while maintaining its decentralization and security.

Important! Layer 2 blockchains can exist in different types and forms, particularly state channels, rollups (for example, Optimistic rollups) and sidechains. The examples of the best and most famous L2s are Optimism, Arbitrum and Polygon.

What Are the Different Types of Base Networks?

Currently, Base is a huge ecosystem consisting of various apps and integrations. It includes such types as:

  • Bridge. The project's ecosystem includes a huge number of different bridges and solutions to perform transactions, such as Across Protocol, Brian, deBridge, Pheasant Network and many others.
  • DAO. This type includes platforms that provide tools and infrastructure for building DAOs. These include Aragon, Based Nouns, Common, Llama, Prop House, Vrbs and XDAO.
  • DeFi. This section includes protocols, marketplaces, DEX, apps and other platforms related to DeFi services, such as AAVE liquidity protocol, Balancer AMM, Compound dApp and many others.
  • Gaming. This part of the ecosystem is dedicated to various games and applications, such as LandTorn, Iskra web game platform, GAME7, etc.
  • Infra. This part of Base includes applications for on chain payments (Splits), developer platforms (Alchemy), computation networks (Arpa Network) and so on.
  • NFT. Base also offers various platforms, NFT collections, digital art galleries and other platforms associated with non-fungible token and its management, such as Collectify, Bright Moments, Base colors and others.
  • Onramp. This section includes a variety of apps and projects for converting fiat money into crypto and includes Coinbase Onramp, Onramp.money, Transak and so on.
  • Security. Base’s ecosystem provides users with a variety of apps focused on smart contract audits and blockchain’s security, for example Codeslaw, Hapi, Lossless, etc.
  • Social. This type is connected with all the social network apps, membership platforms, media organizations and others, including Coinage, AlfaFrens, Blackbird, Daylight and others.
  • Wallet. Base’s ecosystem also includes a variety of wallets, like Beam, Blockwallet, Coinbase Wallet, Ledger, TrustWallet and many others.
  • X-Chain. The last type of the ecosystem includes three apps focused on x-chains, particularly Axelar, Socket and Wormhole.

Important! All platforms and ecosystem offers can be explored on the official Base website.

Source: Base

How Does BASE Works?

The operational principle of Base blockchain is built as follows: as a layer 2 blockchain, it processes transactions outside the Ethereum, and then places them back on the main chain. Thus, the volume of data in the main network is reduced, which lowers gas fees.

Important! Since Base processes transactions off the layer 1, the platforms processes many transactions simultaneously, thereby reducing congestion and increasing speed.

Since Base uses the security protocols of the main Ethereum chain even operating off-chain, this guarantees security and protects all transactions on the network.

An important part of the ecosystem is that developers can create and deploy smart contracts on Base, which provides the basis for creating secure and autonomous dApps. Moreover, the base Network relies on decentralization, which means users do not need to interact with central authorities or worry about t a single organization controlling their assets.

Benefits of Using  Base Network

  • Cost-Efficient Transactions. By processing transactions off-chain, it reduces the load on the Ethereum main chain, which leads to reduced gas costs that are beneficial to the user. Thus, using Base ecosystem is 10 times cheaper than Ethereum.
  • Accessibility. As an EVM-compatible chain, Base allows developers to easily utilize various Ethereum-based tools, frameworks, smart contracts, etc. across multiple platforms.
  • Transaction Throughput and Scalability. By processing transactions off-chain and putting the results back to it, Base not only enables a larger transaction volume, but also offers faster processing times compared to L1.
  • Environment for dApps. Base is a great platform for developing and deploying various dApps. Its tools and functionality support the development and operation of various DEXs, platforms, and services, offering users low costs and high performance.

How to Invest in Base?

Now there are multiple investment strategies that will help you profit from Base. However, before you start, it is important to choose a reputable platform with a user-friendly interface that allows you to explore different investment opportunities and choose the right one for you.

Notum App offers users several options for investing in Base:

  • Vaults. Yield aggregation is an investment type that combines different strategies and DeFi protocols to allow investors earn the highest rewards. Notum offers users various vaults to invest in Base with low risk and decent rewards, such as DOLA-USDC vault with total APY of 36%, USDC with 5.8%, ETH-BSDETH with 7.19% and others.
  • Lending. Lending has long been an integral part of the DeFi world. As a strategy, it involves providing assets to a platform where some users earn on the provided liquidity, while others take out crypto loans on favorable terms. On Notum, you will also find a number of lending investment strategies, such as ETH with total APY of 2,62%, AERO with 22%, USDC with 4%, allowing you to invest in Base and earn income.
  • Liquidity pools. Investing in liquidity pools involves providing assets on crypto exchanges and DeFi platforms, which are then used for various financial services. For providing assets, users receive rewards and LP tokens, allowing them to earn extra profits. Notum has a huge number of liquidity pools that allow users to invest in Base with pretty high APY, for example USDC-AERO pool with total APY of 95%, or DOLA-USDC with APY of 21%.

Important! All the Base Network investment options on Notum can be studied here.

Source: Notum

Conclusion

Base is a fairly popular layer 2 solution that solves the main problems of Ethereum related to transaction cost, scalability and speed. Now Base is a huge ecosystem with apps and integrations, including DAOs, NFTs, bridges, DeFi projects and other innovative platforms, shaping the future of DeFi.

Connection with Coinbase, constant innovations, a wide variety of tools for developers and openness to cooperations make Base L2 an important player in the DeFi world with great potential for further growth, development and implementation.

FAQ

  1. How does Base Network differ from other blockchain networks?

    Base differs from other L2 blockchains due to its EVM compatibility b providing high scalability and reducing transaction costs while maintaining the security and decentralization of Ethereum.

  2. What are the main features of Base Network?

    The main feature of Base is the solution to the main problems of Ethereum - transaction cost, scalability and speed. Another important feature of the platform is the development and deployment of dApps and smart contracts, as well as the integration of other applications and projects into the ecosystem.

  3. How secure is the Base Network?

    Despite the fact that Base Chain offers increased security, no network is immune to potential attacks and vulnerabilities in the code.

  4. What applications can be built on Base Network?

    Since Base supports a large number of industries, developers can build various DeFi apps, social platforms, gaming apps, and many others.

  5. How can I start using the Base Network?

    Base Chain has a huge number of use cases in different areas, such as DeFi, NFT, social media, etc. Once you choose the one you need, you can connect wallet like Metamask or Base Wallet, add Base and start using it.