Home / Education / Crypto / Blockchain / What Is Base? Coinbase’s Layer-Two Chain Explained
6 min read

What Is Base? Coinbase’s Layer-Two Chain Explained

Last Updated March 4, 2024 3:03 PM
Andrew Kamsky
Last Updated March 4, 2024 3:03 PM

Key Takeaways

  • Base, a Layer 2 blockchain, was launched by Coinbase to improve Ethereum’s scalability and speed.
  • It operates off-chain, reducing congestion and lowering transaction costs on the Ethereum network.
  • Developers can deploy smart contracts on Base, fostering decentralized application development.
  • Centralization concerns do exist, but a shift towards complete decentralization is in Base’s developmental plans.

Base, an Ethereum layer 2 (L2) blockchain, was officially launched on August 9, 2023, by Coinbase, a crypto exchange company headquartered in the United States. 

“Base” is a secure, low-cost, builder-friendly Ethereum L2 built to bring the mass adoption onchain. designed to work on top of Layer 2 on the existing Ethereum blockchain. Base is an effort to make the Ethereum blockchain more scalable and efficient. The introduction of Base aims to help the Ethereum system, benefit from faster transactions and lower fees. 

Understanding Ethereum Layer-Two Solutions

Layer 2 refers to a set of solutions developed to function atop a foundational blockchain network, known as Layer 1, on the Ethereum network. These secondary frameworks or protocols aim to enhance the underlying blockchain’s scalability, transaction speed, and overall efficiency, all while maintaining its inherent security and decentralized nature.

Layer 2 technologies come in various forms, encompassing state channels like Bitcoin’s Lightning network, sidechains such as Bitcoin’s Liquid network and rollups like Optimistic rollups and ZK-rollups.

How Does Base Work?

The Base layer-two blockchain, operates by using a technique that processes transactions off the Ethereum main chain (Layer-One) and then records the results back on it. Here’s a simplified breakdown:

Off-Chain Processing 

Base handles most transactions and computations off the Ethereum main chain. This means it can process many transactions simultaneously, reducing congestion and improving speed.


After processing transactions off-chain, Base aggregates or batches multiple transactions together and then places them back onto the Ethereum main chain. This consolidated approach reduces the amount of data stored on the main chain, lowering transaction costs (gas fees).


While operating off-chain, Base leverages the security protocols of the Ethereum main chain. This ensures that all transactions and computations done are secure and tamper-proof.

Smart Contracts 

Developers can write and deploy smart contracts on Base, allowing for the creation of decentralized applications that can perform various tasks autonomously, securely, and efficiently.


Base is intricately connected to Ethereum. This integration allows applications and tokens on Ethereum to interact with Base, availing the benefits of scalability and lower fees, without needing to migrate completely.

User friendly 

Base aims to make decentralized applications more user-friendly, enabling broader adoption of blockchain technology by everyday users by providing a more scalable, faster, and cost-effective platform.

Decentralization and Trustlessness 

Base maintains the decentralized and trustless nature of blockchain, ensuring that no single entity has control over the entire network, and users don’t need to trust any central authority.

How To Interact With The Base Testnet?

Connecting to the Base network and using the Testnet can be achieved following these steps:

  1. Select your wallet: Choose an EVM compatible wallet like Coinbase Wallet or MetaMask and sign in to your account.
  2. Access network selection: Access the network selection menu, usually found in the top right corner or in a dropdown menu of the wallet extension.
  3. Choose base network: Select ‘Base’ from the list of available networks to set it as the active network. If using MetaMask, you may need to add Base manually by selecting ‘add a network manually’ option.
  4. Input network details: If adding manually, input the necessary details for the Base Goerli testnet and save the settings.
  5. Connect to Application: Once Base is the active network, connect to the desired application (e.g., BaseSwap) using the wallet, and you are all set to interact with the Base network.

When Will The Base Token Be Launched?

As per the official roadmap and communications  from Base via their Twitter  bio, there is a clear indication that the issuance of a network token is not part of their future plans. However, it’s not uncommon for projects to diverge from initial declarations and, without prior announcement, proceed with airdrops subsequently. 

What Are The Benefits Of Using Base?

Some potential use cases behind Base might include:

Scalability And Transaction Throughput 

Base likely addresses issues related to scalability and transaction throughput on the Ethereum network. By processing transactions off the main chain and recording the results back on it, Base can facilitate a higher volume of transactions and faster processing times compared to Layer 1 solutions.


Layer 2 solutions like Base often enable more cost-effective transactions. By reducing the load on the Ethereum main chain, transaction fees associated with gas costs can potentially be lowered, making it economical for users.

DeFi Applications

Base could serve as an optimized layer for various decentralized finance (DeFi) applications. It might support the development and functioning of decentralized exchanges, lending platforms, and other financial services, providing enhanced performance and lower costs.

Smart Contract Execution

Given its association with Ethereum, Base is presumably designed to support smart contracts, enabling more efficient execution and interaction with decentralized applications (dApps) built on smart contract technology.

What Are The Potential Drawbacks Of Base? 

Some potential challenges and disadvantages that are associated with Layer 2 blockchains include:


Layer 2 solutions, by their nature, add an extra layer of complexity to the blockchain ecosystem, which could lead to user confusion and adoption hurdles, particularly for those new to the technology.

Security Concerns 

While Layer 2 solutions aim not to compromise the security of the Layer 1 blockchain, the introduction of new protocols and technologies always brings potential vulnerabilities and security risks that will be to be addressed to avoid any potential hacks.


A primary concern with Base is its significant centralization dependence on Coinbase being the sole sequencer node. The company holds substantial authority and influence over transaction processes, which may lead to centralizing control and affecting transaction throughput.


Although Base was created by Coinbase, the progression towards complete decentralization is a crucial aspect of Base’s developmental roadmap, ensuring the crypto economy remains inclusive, global, and open. 

The commitment to openness and collaboration is mirrored in Base’s endeavor to build a robust ecosystem, welcoming contributions from the wider community and integrating various chains across Coinbase products.


What is Base and who launched it?

Base is an Ethereum Layer 2 blockchain, launched by Coinbase in 2023. It enhances scalability, transaction speed, and supports application development, all without replacing the existing Ethereum chain.

How does Base operate to enhance transaction speed and reduce costs?

Base processes transactions off the Ethereum main chain, batches them together, and records the results back on the main chain. This reduces congestion and lowers transaction costs, improving overall efficiency.

Can developers create and deploy smart contracts on Base?

Yes, developers can write and deploy smart contracts on Base. This allows the creation of decentralized applications (dApps) that can operate autonomously, securely, and efficiently on this platform.

Does Base have any centralization concerns and how does it address them?

A primary concern is Base’s dependence on Coinbase as the sole sequencer node, indicating substantial centralization. However, progressing towards complete decentralization is a pivotal part of Base’s developmental roadmap.

Was this Article helpful? Yes No