Original Author: Daniel Li, CoinVoice
In the narrative resonance of the Cancun upgrade and the halving of BTC, L2 has become the next industry hotspot and has become the mainstream view of the crypto market. In this context, several well-known L2 public chains have announced the deployment of their mainnets, aiming to quickly seize the market as the bull market approaches. Among these many L2 projects, the L2 public chain-Base, built by Coinbase based on the OP Stack module, has recently attracted a lot of attention.
Base's popularity stems from the meme coin called BALD recently released on its blockchain. The coin skyrocketed by more than a thousand times in a day and reached a market capitalization of over 100 million dollars in just 2 days. The liquidity of the fund pool also exceeded 25 million dollars. The popularity of BALD has brought a lot of attention to the Base public chain, which has now started running its mainnet and is expected to be officially launched to the public in early August.
The "Run" of BALD Raises Questions About Base Public Chain
The rapid rise of the BALD token and its subsequent violent fluctuations have sparked heated discussions and doubts in the community. According to the trend chart, the BALD token quickly surged to a historical high of $0.09386 on the first day of trading, with a staggering increase of 384.88% compared to the lowest point. However, after rapidly reaching its peak, the price of the BALD token began to plummet, causing significant losses for many investors.
The fluctuation in the price of the BALD token is closely related to the large capital outflow. Since the Base mainnet has not been officially released to the public, the BALD token based on the Base network can currently only flow in but not out. However, this restriction only applies to ordinary investors, and the deployer of BALD, "BaldBaseBald", still has the right to sell tokens at this time.
It is reported that when the BALD token reached its all-time high price, BaldBaseBald withdrew over 10,500 ETH worth nearly $20 million from the BALD liquidity pool. This action had a significant impact on the liquidity of the BALD token, causing a sharp decline in its price of up to 80%. Meanwhile, BaldBaseBald profited approximately $5.9 million from it, most of which came from the investments of later participants.
The operation of the BALD token is very similar to the basic principles of a honeypot protocol. In this strategy, token creators usually hold a large amount of tokens in advance and then artificially raise the token price using their own funds. Regular investors see the price increase and often follow the market sentiment to buy a large number of tokens, further driving up the price. At this point, the token creators seize the opportunity to sell their held tokens, earning huge profits, while regular investors, unable to sell, are left trapped and suffer losses.
As for whether BALD is a "honey trap," it is still uncertain. The conclusion can only be drawn when Base mainnet is officially open to the public and if regular users are unable to withdraw their assets. However, based on the current situation, BALD is likely to be in trouble. The deployment of position utilization rules by the project team has already scared off potential investors who still wanted to enter the market. The project's pursuit of immediate gain has also made it the shortest-lived meme coin in history. However, some people question whether BALD might just be a pawn and that the real planner behind it could be Coinbase.
Some investors point out that the meaning of "BALD," with its association to Coinbase CEO Brian Armstrong, who is himself bald, raises suspicion. Additionally, the deployer of the BALD token holds a significant amount of cbETH, which has fueled speculation that BALD may have been created by individuals related to Coinbase. Although these speculations were proven false afterward, the actions of BALD did indeed affect the liquidity of the Base public chain. With the launchee of BALD's exit, the Total Value Locked (TVL) of Base has sharply declined from its peak of $41.2 million to the current $9.54 million, a decrease of 76.84%.
However, for the Base blockchain, the influence of Bald as a meme coin is very limited. When the myth of a new meme coin getting rich quickly reappears, investors will quickly chase after the next hot one. In the long bear market, investors treasure any opportunity that could bring huge wealth. Meme coins are also used by most newly deployed blockchains, and even some well-established ones, to attract market attention due to their tendency to experience sharp rises and falls. For example, AIDOGE, the first meme coin in the Arbitrum ecosystem, once brought new vitality to the Arbitrum ecosystem and combined popular elements such as AI, Arb, and Doge to create buzz and further fuel the market's FOMO, opening up new narrative gameplay.
Choosing a meme coin as a hot topic for marketing itself is not a problem for the Base blockchain, but the mistake lies in choosing a bad ally. Apart from Bald, let's focus on the Base blockchain itself. As a Layer 2 blockchain jointly built by Coinbase and OP, Base has strong capabilities, and most investors still hold an optimistic attitude towards the future development of the Base blockchain. The current meme coins are merely a prelude to attract attention. When valuable projects are officially released and launched in August, Base will truly explode. At that time, we will be able to see the true potential of the Base blockchain.
Base: The stronghold of Coinbase's on-chain products
As the largest cryptocurrency exchange in the United States, Coinbase has been evolving towards creating an open financial system. Over the past decade, Coinbase has established protocols, built exchanges, and created DApps for the general public. Now it has reached the final stage towards its ultimate goal, which is to build an open on-chain financial system. Bringing over 1 billion users into the global crypto economy.
Base Chain, as an important component of Coinbase in building a global open financial system, has been receiving a lot of attention since it started testing in February this year. On one hand, Base is an L2 public chain built by Coinbase based on the OP Stack module, which has certain advantages in terms of performance and benefits compared to existing L2 public chains. On the other hand, backed by Coinbase, the largest cryptocurrency exchange in the United States, with over 100 million mature crypto users and a strong capital of 20 billion dollars, Base has more competitiveness in the market compared to other L2 chains.
Base, as the headquarters of Coinbase's on-chain products, will become an open ecosystem that allows anyone to participate in building. This makes Base very developer-friendly. Developers can build decentralized applications securely and cost-effectively on Base. In the future, Base will also become one of the best places for on-chain development.
The advantages of Base:
Firstly, Base Chain has the security and scalability needed for decentralized applications. As one of the scalability solutions for Ethereum, Base Chain utilizes the underlying security of Ethereum and the best practices of Coinbase to provide developers with a secure and reliable development environment, allowing them to confidently develop on Base.
Secondly, Base Chain is authorized by Coinbase, making it easy to build decentralized applications that have access to Coinbase's products, users, and tools. This means that developers can leverage Coinbase's powerful ecosystem to serve over 110 million verified users and access 8 billion dollars of assets on Coinbase's platform.
Third, the Base blockchain is powerful and cost-effective. It provides full EVM equivalent functionality at a very low cost and is committed to promoting the development of developer platforms. Developers can use simple developer APIs for account abstraction, set up gas-free transactions for their decentralized applications, and securely build multi-chain applications with easy-to-use bridges.
Lastly, the Base blockchain is open-source. Base aims to be decentralized, permissionless, and open to anyone interested in creating a standards-based, modular, and aggregator-independent superchain powered by Optimism. As core developers of the open-source OP Stack, Base will join Optimism and work towards creating a vibrant community composed of other developers.
Some Ecological Projects to Look Forward to in Base's Future
The main network of the Base blockchain has already been opened to developers in advance and is expected to be officially open to the public in early August. Besides the market attention on the BALD token, there are actually many other projects worth paying attention to on the Base chain. Let's take a look at these projects together.
1. DackieSwap
DackieSwap is the first native yield-generating decentralized exchange (DEX) on the Base blockchain. It is a digital currency market where users can trade. DackieSwap adopts the automated market maker (AMM) model, allowing users to trade in liquidity pools. If you provide liquidity, you can earn a portion of the exchange's trading fees. Currently, DackieSwap has reached a liquidity of $730 million and a trading volume of $42 million, making it a shining gem on the Base blockchain.
DackieSwap's most important feature is its StableSwap functionality, which is a fork of the Curve Finance protocol. It uses an algorithm to allow users to have the optimal trading path and make full use of existing liquidity pools. Unlike other DEXs, DackieSwap is committed to providing personalized, sustainable, and flexible liquidity to better meet users' needs. Its goal is to provide users with a seamless trading experience without the need for registration or complex operations, and help them earn passive income and discover early opportunities in the crypto ecosystem. Additionally, DackieSwap is also dedicated to protecting user privacy and security through an anonymous management mode. If you are looking for a secure, efficient, user-friendly, and privacy-preserving cryptocurrency exchange, then DackieSwap is a good choice.
2. Perennial
Perennial is a decentralized finance (DeFi) derivatives protocol designed to provide traders with price exposure and leverage exposure, as well as an opportunity for liquidity providers to earn fees. This protocol uses an automated market maker (AMM) with a pool-to-pool mechanism, allowing traders to obtain leverage exposure from different price sources by depositing collateral, without the need to find counterparties or bear the risk of price fluctuations. At the same time, liquidity providers can provide funds in the protocol and earn fees by accepting traders' trades. In Perennial, the losing party pays the winning party, and the protocol automatically settles the transaction, making the trading process more efficient and trustless.
Perennial's design philosophy is based on the minimalism and impartial design of protocols such as Uniswap V3 and Compound III, empowering market participants to make decisions about market structure and design. This enables Perennial to meet the needs of various users, including beginners and advanced traders and liquidity providers. Unlike traditional derivative trading platforms, Perennial provides a more flexible and secure trading experience through the use of open protocols and decentralized market structures. Additionally, Perennial is a permissionless market creation, integration, and composition protocol, allowing users and developers to freely use it as building blocks to create their own financial products and tools.
3. MES Protocol
MES (Multi-rollup Exchange Solutions) is a spot trading DEX on the Base mainnet. It adopts a cross-rollup order book mechanism, providing users with a cross-rollup interoperable exchange solution. The goal of MES is to enable asset and data exchange across different rollups, integrating token exchange order books and seamless asset transfers between networks.
In the MES Protocol, the cross-rollup mechanism is one of its core features. It provides a unified order book, enabling asset and data exchange across multiple rollups. When the cross-rollup mechanism is enabled, liquidity across rollups is aggregated, allowing users to seamlessly interact with and leverage liquidity from multiple chains, thereby closing orders more efficiently and reducing slippage. The MES protocol utilizes Rollup technology to reduce the computational requirements for executing trades, thereby reducing gas consumption. It leverages the security of Ethereum and the scalability and efficiency of Rollups to provide users with an efficient, secure, and cost-effective trading experience.
Compared to other DEX deployed on different Rollups, MES Protocol has stronger cross-Rollup interoperability. It brings the intuitive trading experience and various trading functions of centralized exchanges to decentralized exchanges, allowing users to comfortably trade digital assets. At the same time, it provides lower transaction costs and faster transaction speeds, allowing users to better utilize assets and data and achieve higher value. In addition, MES Protocol also provides L1 security and L2 Rollup with high throughput and low cost, providing users with better ways to utilize assets and data.
4. Backed
Backed is a project aimed at connecting stocks with decentralized finance (DeFi) and expanding the range of financial asset access. It introduces fully backed ERC20 tokens that represent the value of popular stocks like Tesla, Google, Apple, etc., which can be used within the entire DeFi ecosystem.
Backed Tokens are the tokens issued by the Backed project, representing the value of real-world assets like stocks. Each Backed Token is a fully collateralized tracking certificate unit, tracking the listing value of a specific security and fully backed by that security. These tokens are fully compliant with Swiss law, can be freely transferred on the blockchain, and can be directly sold to qualified investors and licensed dealers through the Backed platform.
By tokenizing real-world assets, Backed Tokens provide investors with an opportunity to access real-world assets on the blockchain. These tokens can be used within the DeFi ecosystem, including trading, lending, and other financial activities. On the Backed platform, real-world assets like stocks are transformed into tokens, allowing for more flexible trading and holding, thereby expanding the range of financial asset access.
Summary
Looking at the ecosystem projects of the Base blockchain, it can be seen that there are actually many promising and promising projects on the Base chain. However, the Base blockchain has not been officially announced yet, and these projects have not started to exert their strength. The design concept of the Base blockchain is "allowing anyone to create and run their own distributed applications," which gives all developers equal opportunities for development, but also provides a good opportunity for speculators. Therefore, we need to look more wisely at the various tokens and applications running on the Base blockchain, not be blinded by superficial attractiveness, but should carefully evaluate the feasibility and risks of the projects. Only in this way can we better utilize the advantages of the Base blockchain.
