Franklin Templeton, a major asset manager overseeing trillions in assets, has highlighted Base, an Ethereum Layer 2 network incubated by Coinbase, as a frontrunner in the emerging realm of Social Finance (SocialFi). Base is gaining recognition within the SocialFi sector, with its prime application, Friend.tech, capturing a significant portion of transactions. Friend.Tech has been at the forefront of revolutionizing social interactions and content monetization, positioning Base to be a leader in the Ethereum L2 sector going forward. Recent milestones such as the launch of its second version and the FRIEND token airdrop exemplify Base’s pivotal role in empowering SocialFi innovations.
Base’s utilization of “optimistic rollups,” a technology that accelerates transactions and reduces costs by batching them off the Ethereum mainnet, sets it apart from other Layer 2 networks. This approach allows Base to maintain Ethereum’s security standards while enhancing transaction throughput and efficiency. As a result, Base’s total value locked (TVL) has increased by over 630% year-to-date, reaching $5.45 billion, making it the third-largest Ethereum Layer 2 network behind Arbitrum One and OP Mainnet. Coinbase’s close affiliation with Base as the sole sequencer of the network has contributed to its success, although plans for gradual decentralization are in place to ensure long-term sustainability.
Base’s success has extended to other layers within its ecosystem, such as Degen Chain, a layer-3 blockchain operating atop the Base network. Degen Chain has rapidly gained traction, recording nearly $100 million in transactional volumes within 24 hours of its launch. Despite being operational for only four days, the network has seen over 272,000 unique transactions and the creation of thousands of contracts and tokens. However, concerns have been raised within the crypto community about the necessity and potential drawbacks of layer-3 networks, with debates arising about their impact on mainnets like Ethereum. Polygon CEO Marc Boiron has expressed differing opinions on the matter, acknowledging both the potential value and drawbacks of layer-3 networks.
The continuous growth and development of Base and its ecosystem are indicative of the evolving landscape of Layer 2 and Layer 3 networks within the cryptocurrency industry. Base’s strategic partnerships and innovative approach to SocialFi have positioned it as a key player in the sector, with Friend.tech leading the way in revolutionizing social interactions. As Base continues to expand and solidify its position within the Ethereum ecosystem, the future of SocialFi and layer-based solutions will likely see further advancements and increased adoption by users and investors. The relationship between Layer 2 and Layer 3 networks will continue to evolve, with ongoing debates and discussions shaping the direction of the cryptocurrency industry as a whole.
