Base Network Investment Brief: Coinbase's L2 Institutional On-Ramp

Frequently Asked Questions

01.What is Base Network?

Base is an Ethereum Layer 2 network incubated by Coinbase and launched to public mainnet on August 9, 2023. It is built on the OP Stack, the open-source codebase behind OP Mainnet, and is EVM-equivalent, meaning Ethereum contracts and tooling run on Base without modification. As of January 2024, Base has no native token, and its core value to a capital allocator is the distribution attached to Coinbase, a publicly listed US company, which positions Base as an institutional on-ramp between regulated venues and on-chain settlement.

02.How does Base differ from Arbitrum and Optimism?

Base shares the OP Stack codebase and the optimistic rollup security model with OP Mainnet, so at the protocol layer it resembles Optimism more than Arbitrum. The difference is distribution and governance. Base is operated by Coinbase, a regulated NASDAQ-listed company, and has no native token as of January 2024, whereas Arbitrum and Optimism both have governance tokens and decentralised collectives. Base also has a revenue-share arrangement with the Optimism Collective, contributing a portion of sequencer revenue back to the Superchain.

03.Why should a capital allocator track Base in 2024?

Base matters because it pairs an audited, EVM-equivalent execution environment with the regulated distribution of a publicly listed exchange. For an allocator, that combination shortens the path from fiat to on-chain assets and reduces counterparty ambiguity relative to anonymous chains. Base was a fast-growing newer entrant in late 2023 within an Ethereum L2 sector whose total value locked crossed roughly 13 billion dollars in Q4 2023. The absence of a native token as of January 2024 means exposure is taken through the applications and infrastructure built on Base, not the chain itself.