Memes touch Base
The memecoin frenzy has overtaken Base, a blockchain launched by Coinbase Global Inc. that’s meant to be the centerpiece of its expansion into decentralized finance and nonfungible tokens.
Activity has exploded on Base, with the total value of cryptocurrencies sent to the blockchain topping $1 billion, according to tracker DeFiLlama.
Coinbase’s Base Blockchain Gains Popularity
Memecoins, the highly speculative tokens that mostly aren’t available on Coinbase’s exchange, are driving traders to the blockchain. Among the most-traded tokens on Base, according to tracker DEX Screener, are ANIME, which describes itself as “no utility. just art and $anime,” and DEGEN, a nod to a nickname for traders who embrace the riskiest tokens. Wallets paying the most in Base transaction fees potentially belong to trading bots profiting from memecoins, according to Parsec’s data and analysis by Michael Silberling of OP Labs.
Most-Traded Tokens on Base
When Coinbase announced the launch of Base, known as a Layer 2 because it’s built on top of Ethereum, the company promoted it as a “bridge” between its users and the broader crypto world including DeFi, blockchain-based games and NFTs. Yet the memecoin frenzy highlights the fact that online casinos are still crypto’s biggest use case.
“It’s Coinbase’s L2, so they immediately get a lot more attention and credibility than most others, simply due to the distribution potential,” said Anil Lulla, co-founder of crypto research firm Delphi Digital. “It shouldn’t be the pure focus and goal of all these chains to just become a casino.”
A software upgrade on Ethereum in March has been credited with fueling the growth. One impact of the upgrade, known as Dencun, is significantly lower costs for trading on L2 blockchains. Dencun made L2s like Base “competitive with chains like Solana,” said Ryan Watkins, co-founder of Syncracy Capital.
Base was ready for Dencun on Day 1 and the upgrade brought average fees down from about 10 cents to 1 cent or less, according to a Coinbase spokesperson.
“Base’s mission is to bring the next billion users onchain, and we are encouraged by the recent influx of activity,” the spokesperson said in a statement. “Our focus is making onchain technology accessible to anyone around the world, including by allowing for cheaper onchain transactions.”
Watkins pointed out that while Coinbase may receive criticism for the memecoin frenzy, the exchange has “no control” over what’s launched on Base. Still, analysts say interest in memecoins could be good for Coinbase, and the growth may overshadow any criticism.
“If memecoin mania is what it takes to convince users to set up a wallet and try out your chain, it may be worth it,” said Lulla.
Watkins said that Base is already generating an estimated $2 million daily in fees.
With more applications beyond memecoins, “this would be a big win for Coinbase if Base became one of the most-used chains,” Watkins said.
Hearing them out
“Binance having a board composed primarily of company insiders tells me they are still resistant to outside control and oversight, and the lack of depth on the board of independent members with deep regulated financial risk or compliance experience is not ideal.”
Austin Campbell
Adjunct professor at Columbia Business School and a consultant for blockchain firms.
Source: bloomberg.com
