The Case for Base: An Open Stack for the Global Economy

Key Takeaways

• Dominant L2 Leadership in 2025: Base captured the majority of Ethereum L2 revenue, while leading in TVL and L1 data fees, driven by massive onchain activity and performance of native protocols like Morpho and Aerodrome.
• Technical Excellence for Consumer Scale: 2025 upgrades (scaling and capacity upgrades, Flashblocks, and fee market and congestion improvements) enable for sub-cent fees, near-instant confirmations, and high reliability - positioning Base as one of the most performant L2s.
• Ecosystem Flywheel in Motion: Strategic acquisitions, Base App's early SocialFi and token creation success, new strategic pivot, and innovations like x402 and Base Pay attract builders and users in both the short and long run.
• Token Launch Catalyst on the Horizon: Jesse Pollak's September 2025 announcement shifted from "no plans" to active exploration of a network token for governance and incentives, with Polymarket odds at 69% for a 2026 launch - potentially unlocking 85% of sequencer revenue for holders/stakers.
• Bullish Outlook for 2026: Amid regulatory tailwinds, Ethereum maturation, and institutional inflows, Base's flywheel of tech, distribution, and ecosystem momentum sets it up for even more growth - potentially delivering top-tier L2 valuations and cementing its role as the open stack for the global onchain economy.

An Open Stack for the Global Economy

Base represents Coinbase’s foray into decentralized infrastructure, leveraging the OP Stack to create an Ethereum L2 focused on low-cost, high-throughput transactions. Launched in 2023 with the vision of becoming a home for builders and creators, Base has evolved progressively to provide the necessary permissionless and inclusive infrastructure, while encouraging the development of a wide variety of applications.

Amid regulatory tailwinds and Ethereum’s progressive maturation, Base is primed for further retail and institutional growth in 2026. This is largely attributed to its Coinbase integration, which not only taps into the exchange’s massive distribution advantage — over 110 million verified users — but also its regulatory comfort for institutions and instant onboarding, which gives the Base ecosystem a categorical edge no other L2 can match. As it is, Base has outpaced its peers in terms of activity and revenue, benefiting from the success of its native applications like Aerodrome and Zora.

This report explores Base's recent history and trajectory, highlighting its features and potential through: 1) key metrics to demonstrate its current strength; 2) technical architecture and recent improvements 3) distribution moat and expansion efforts; 4) rumors surrounding a token launch and valuation comps for forward-looking upside.

Key Metrics

In 2025, Base achieved explosive growth across key metrics, capturing the majority of all L2 weekly revenue - over 80% on certain weeks - with overall TVL of 48%

It also represented the largest share of L1 data fees by all Ethereum L2s, peaking at 55.5% in November, indicative of its vast user and application activity.

Base’s explosion can also be depicted in the success of its native applications - Morpho, Aerodrome, etc. Morpho stands at the second amongst all lending protocols by TVL, borrowed capital, and 30d fees, only behind Aave. Aerodrome ranks third amongst all DEXs within the EVM ecosystem by 30d DEX volume and fourth in 30d fees generated. We explore more of their growth below.

Technical Upgrades

Base underwent a series of targeted technical upgrades throughout 2025, prioritizing scalability, performance, and user experience. With the aim of sustaining explosive growth while still keeping fees minimal and transactions near-instant, these focused on optimizing various components of chain architecture, including gas targets and limits, sequencer and clients, fee markets, and more.

Some notable upgrades include:

Core Scaling & Capacity Upgrades: Reduced gas targets (35 Mgas/s -> 25 Mgas/s) and increased gas limits (targeted 150 Mgas/s in Q4 2025) to reduce inefficient usage and improve burst capacity respectively. Future plans include further raising this limit to up to 400-500 Mgas/s by early 2026 to better support a future of increased onchain activity.

• Flashblocks: Introduction of several new components (Rollup-boost, Op_rbuilder, Websocket Proxy, Node-reth) within Base’s high availability sequencer system, allowing for the addition of more custom block building functionality, and effective reduction of block times from 2s to just 200ms with sub-second preconfirmations.
• Fee Market & Congestion Improvements: Fees made more dynamic and responsive to congestion, reduced reliance on priority fees, decreased and made median fees more sustained during peaks. Additional explorations included implementing a minimum base fee to reduce spam, localized fee markets to reduce the impact of event-driven spikes, and more.

Distribution Moat & Expansion

Beyond technical improvements, Base has successfully leveraged various strategies to increase their audience. Most notably, Base has managed to tap into Coinbase’s distribution moat through targeted integrations with various apps, Base App (formerly Coinbase Wallet) implementations and strategic acquisitions. This introduces a new avenue for millions of Coinbase users to be channeled directly onto Base chain, allowing native apps on the chain to shine.

DeFi Integrations - Morpho & Aerodrome

In January 2025, Coinbase officially launched crypto-backed loans via Morpho - Base’s leading lending market, allowing users of their platform to utilize assets like BTC as collateral to borrow. This process would first involve the conversion of BTC into cbBTC (Coinbase Wrapped BTC) before being transferred to a Morpho smart contract on-chain, contributing to both the protocol’s and L2’s TVL. To date, total cbBTC collateral directed via Coinbase has surpassed $1.5b in value, representing around 62.2% of Morpho’s TVL on Base, and 30.7% of the L2’s total TVL, from across 21.2k active wallets - signifying strong use case.

A similar integration would happen in August 2025, but with Aerodrome - Base’s leading DEX, instead. This enabled users to perform direct DEX trades and swaps through the Coinbase platform, routing them through Aerodrome and contributing to the protocol’s overall DEX volume. Despite being relatively simple in concept, these two integrations served to create a direct bridge between Coinbase’s massive user base and DeFi on Base. It was also instrumental in growing Base’s DeFi TVL to over 4.5bn, achieving a 45% increase from the past year.

Token Launches & SocialFi - The Base App

The Base App has also served as a key element of Base’s growth, which was introduced in July 2025. More than a simple rebranding from Coinbase Wallet, the Base App is an all-in-one platform designed to merge finance, messaging, content creation, and dApps under a single roof. Despite being under beta, this led to a surge in both token creations and SocialFi-related activity on Base, facilitated by Zora - a social platform for the launching of creator and content tokens. The ease of creating a token and experimenting with the monetization mechanics has also onboarded many non crypto native users. Currently, close to 1.5k creator tokens and 70k content tokens are created daily, from across 15-20k unique daily creators, all on Base.

Base App officially opened its access to the public in mid December 2025, with Jesse Pollak recently announcing a "trading-first" realignment for the Base App, shifting their priority towards finance-centric UX. Nonetheless, its goal remains the same: to drive demand and capital flows for diverse tokenized assets. This is supported by key features within Base App, including:

• Ease of Onboarding: A one-click experience for any Coinbase user onramping onto Base App, with quick speeds and low fees.
• Strong Focus on Social Features: Chat, copy trading from your feed, leaderboards etc. are some features that are present within the Base App. This helps users to navigate tokens quickly and encourages more trading within communities. Besides tokens, this applies to a wider variety of protocols and assets like stocks, predictions, memes etc.
• Create and Earn: Creators can easily tap into monetization with any post they make, with payouts being transparent and on-chain. Non-creators can also earn from passive yield on holding USDC

Expansion & Support for Innovation - Acquisitions & x402

Acquisitions have been accelerating in crypto and Coinbase has been at the forefront of this trend. Coinbase also acquired Echo and Liquifi, marking their commitment to building a comprehensive suite of services for builders from inception. Echo democratizes early-stage investing and provides a fundraising alternative for teams, Liquifi streamlines token creation, cap table management, vesting schedules, and compliance workflows, while Coinbase handles the rest - including exchange listings, custody, trading, DeFi integrations, and more. Though not directly linked to Base, this approach creates a seamless pipeline for innovation and launching of new applications and ideas on the L2, tapping into Coinbase’s products for support, visibility, liquidity and even distribution across the entire process.

The introductions of the x402 protocol and Base Pay by the Coinbase Developer Platform can also be viewed in a similar manner. By setting the foundations for an efficient on-chain agent economy and providing key payments infrastructure for developers and AI agents on Base, it naturally attracts more builders towards their L2 and growth for its ecosystem over time. Since inception, over 121 million transactions have generated $35.2m in volume on Base. Most of the activity on Base is concentrated around Coinbase, Daydreams, Heurist and Virtuals Protocol. The eventual goal will be to integrate into traditional commerce, enabling a more efficient and cost competitive option as compared to legacy payment systems. Simultaneously, it would give rise to autonomous agents that are able to respond to a wider range of requests across Web 2 and 3. Therefore, Base will stand to gain greatly as x402 advances.

Overall, Base has a strong distribution network and moat - supported by Coinbase's user funnel and developer platform. It is amplified by the fact that both Base and Coinbase are becoming more intertwined, as the exchange becomes a gateway that directs traffic and capital to existing native protocol - boosting organic expansion of the ecosystem in the long-run.

$BASE Token Rumors & Revenue Share

Speculation surrounding a potential token launch intensified in September 2025 when Jesse Pollak openly announced Base's exploration of a network token at BaseCamp. This marked a significant change from 2023’s "no plans" stance, showing a shift towards decentralization, governance expansion, and incentive alignment.

Pollak has also reassured the public of Base’s commitment to Ethereum alignment and regulatory compliance, and further reiterated in December 2025 how the implementation of a network token could potentially open new design avenues. While the team has yet to officially confirm a release date, Polymarket odds are at 23% for a launch by June 30, 2026 and 69% for one by December 31.

One topic closely associated with a Base token launch is the potential avenue for a revenue sharing model. In 2025, Base generated $78.2m in total network (sequencer) revenue, across L1 fees, L2 base fees, and L2 priority fees. This amount represented 89% of total network revenue generated by chains within the OP Superchain ecosystem. Despite this, Base’s payment to the Optimism Collective was limited to 14.4% (~$11.2m), as part of a revenue share agreement where Base contributes the greater of 2.5% of total network revenue or 15% of its net onchain sequencer revenue (network revenue less L1 operator payments) to the Collective.

The upside for a Base token lies in the remaining 85.6% (~$67m) of total network revenue. Should Base decide to enable stakers or holders to capture this share, the token’s attractiveness would inevitably increase.

Valuation Projections

Projections comparing the revenue multiples of other Ethereum L2s with their current valuations would present a clear opportunity for the Base token.

In this example, projecting Base’s $70.3m in 365d revenue across the lower and higher ends of revenue multiples of competitors would place the fair value for its token within a range of $4,885.9m to $7,852.5m. This would place it at the one of the top 2 positions of L2 tokens by FDV.