Despite the bear market, the recently launched Ethereum Layer 2 Blockchain BASE of the crypto exchange Coinbase has grown strongly in recent weeks. In less than four weeks, Total Value Locked (TVL) increased from $2 million to $314.32 million. How was BASE able to reach this impressive milestone and what is the revenue share deal between Coinbase and Optimism all about?
A rapid rise: BASE reaches the top 10
Coinbase BASE, has taken the crypto world by storm. Behind Avalanche, Solana and Mixin, BASE is now the 10th largest blockchain by Total Value Locked.
A significant portion of the increase can be attributed to decentralized applications running on BASE. In the first few days after BASE was launched, the Friend.Tech app in particular ensured that many transactions were generated and investors transferred their capital to BASE. In addition, liquidity mining programs, especially those of the decentralized stock exchange (DEX) Aerodromeattracted users and are currently contributing to the fact that more and more cryptocurrencies are being transferred to the BASE network.
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Additionally, Coinbase support is an important factor that has contributed to the rapid success of ETH-L2. The “Onchain Summer” initiative drew attention to BASE from the start and used financial incentives to enable the network to increase its TVL so rapidly.
New deal between Coinbase and Optimism
Also, Coinbase and Optimism have one a few days ago Profit Sharing Agreement hit for BASE. The agreement came about as Coinbase uses the Optimism Ethereum Layer 2 scaling solution OP Stack to build and operate its network. The OP Stack is part of Optimism’s Superchain vision and provides an open source kit for developing Layer 2 blockchains.
The terms of this agreement stipulate that BASE will contribute either 15 percent of its network’s generated revenue or 2.5 percent of total sales to the Optimism Collective, whichever is greater.
Additionally, Base has the opportunity to earn up to 2.75 percent of the OP token supply for its contributions to the Optimism Collective. These tokens not only allow BASE to receive rewards. But also to actively participate in Optimism’s on-chain governance. However, their voting power is limited to a maximum of 9 percent of the OP token supply to prevent Coinbase from becoming too influential in Optimism’s governance structure.
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Another important point of the agreement is that changes to the BASE protocol can only be made with a Two-of-two multi-signature can be carried out. This means that both BASE and the Optimism Foundation must agree and individually confirm before such upgrades can be authorized.
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