IOSG: Base Social Protocol Kingdom: Massive users and billions of TVLs precipitated by consumer applications

原文作者：IOSG Ventures

原文来源：IOSG Ventures

TL, DR:

• Background: Base has seen significant growth in on-chain data and ecology recently, and we believe that it is due to the help of various aspects: the Cancun upgrade has greatly reduced L2 fees and user interaction costs, backed by Coinbase, with the full support and delivery of capital user projects, Coinbase ventures and first-class funds are very active in investing in the Base ecosystem, and the OP Superchain strategy has achieved a win-win situation;
• Base focuses on unique social and consumer applications that it hopes will be the driving force for capturing users. This article focuses on Base's social and consumer application ecosystem, divides some popular projects into multiple categories such as social/community and user loyalty management/art and NFT/casual games, and introduces some of them.
• Summary: Base is less likely to issue coins in compliance with regulatory requirements, and has achieved ecological prosperity without using token incentives. With a good infrastructure background, Base's consumer applications and social ecosystem are expected to have more new users and achieve mass adoption.

Background: Cancun upgraded with EIP4844, and L2 fees were significantly reduced

With the completion of the Cancun upgrade, L2 has benefited immensely. The most relevant L2 in the Cancun upgrade is the EIP4844 proposal, EIP-4844 introduces a new data storage structure: blobs, specifically to store transaction data submitted by L2 to L1.

After the introduction, L2 transaction data is directly committed to the blob for storage, which can be fully downloaded by consensus nodes and can be deleted after only a short delay, reducing unnecessary storage burden. This means that the introduction of blobs will dramatically reduce L2 transaction fees. At the same time, blobs also extend the block space for L2, and the L2 transaction throughput will be significantly improved. EIP-4844 is essentially a transitional upgrade to prepare for the future to achieve full Danksharding (the final part of Ethereum's "quiet" phase upgrade).

The data availability provided on the Ethereum main chain is Calldata (which can be understood as the data generated in the contract transaction call), and the data transmitted back from Layer 2 to Layer 1 is stored in Calldata. However, the transaction data in the Calldata is not much used after verification, and the long-term data can also be downloaded and verified, and there is no need to even transfer it to the execution layer, before the Cancun upgrade, taking the historical composition of the average transaction fee of the OP chain as an example, nearly 80% of the fees come from L1 data fees.

Taking the cost of Base on-chain interaction as an example, the gas fee of the swap before and after the Cancun upgrade was reduced from $0.59 to $0.01, which is about 1.6% of the previous fee, and the gas fee of the sending function was reduced from $0.178 to $0.003, which is about 2% of the previous fee. EIP4844 allows the cost of Base to be reduced to a level that can compete with Solana when the network is relatively idle.

source: welovetheblobs.xyz

With the significant reduction of L2 gas fees, the Base chain has ushered in a significant increase in TVL and on-chain activities (the green dot in the figure is the time point when the base mainnet was launched and the blob application began), and the last 30 days have recorded more than 64 million on-chain interactions, and its TVL has now exceeded 500 million US dollars, a record high, becoming L2 after OP and Arbitrum.

Source:https://l2beat.com/scaling/projects/base

Coinbase's full support

Base, as an L2 built by the Coinbase team, is backed by the largest listed exchange in the United States, and has unique advantages in all aspects. One of the biggest advantages of the Base Chain is that it is backed by Coinbase's huge user base and strong asset precipitation, so Coinbase only needs to build a chain to connect the Base Chain with the Coinbase exchange and wallet ecosystem. On March 27, Max Branzburg, vice president of Coinbase, posted on social media, "In the future, Coinbase will store more corporate and customer USDC balances on Base. This allows Coinbase to manage and protect customer funds with lower fees and faster settlement times without impacting the Coinbase user experience. Coinbase is excited to continue moving operations on-chain and hopes that other companies will follow Coinbase's lead. Recently, Coinbase Wallet launched the AA wallet (http://smart-wallet.xyz), ordinary users no longer need to cumbersome operation steps, they can directly use mobile phones or computer devices, touchid, google accounts to generate accounts, and can also directly connect to Coinbase accounts, which lays the foundation for the large-scale attraction of users and funds for the Base chain. Coinbase Ventures' investment in the base ecosystem is also very active, and many projects in its portfolio choose to build the ecosystem on the base chain. Base Foundation is also very active, investing and incubating dozens of projects in various tracks such as social and defi in batches. Thanks to Coinbase's position in the industry and the network effect of Coinbase Ventures, many base ecological applications have also been sought after and favored by the primary market, such as Farcaster, FriendTech, etc., all of which are supported by well-known capital, such as Paradigm, a16z, Multicoin, DragonFly, Variant Funds, and 1confirmation and other institutions are also very active in BASE ecological investment.

Superchain Strategy: Win-win with OP

A "superchain" is an L2 network, and an OP Chain (OP Chain) is a single chain within a superchain that, regardless of its specific attributes, is considered an OP Chain if formally managed by the Optimism Collective, and is therefore part of a superchain that shares security, communication layers, and an open-source technology stack with each other. But unlike multi-chain design, OP chains are standardized and intended to be used as interchangeable resources, which will enable developers to build applications that target the entire superchain and abstract out the underlying chain that runs the application. Base and OP have reached a win-win strategic cooperation:

• Base commits to contribute 2.5% of the total revenue of the Base sequencer to the OP, and if it exceeds 2.5%, 15% of the total profit of the Base is directly contributed to the OP.
• In return, OP allows Base to participate in ecological construction and "have a chance" to receive 2.75% of the total supply of OP tokens.

The Base chain built on the OP Stack is currently maintained by Coinbase, and will be gradually decentralized in the future. According to DeFiLlama data, the daily revenue of the Base chain is currently second only to Arbitrum in L2.

Source: https://dune.com/niftytable/rollup-economics In the short term, this cooperation will help upgrade the Optimism mainnet, Base, and other L2s to an initial superchain structure with shared bridging and ordering, and more L2s will inevitably be incorporated into the "superchain" ecosystem in the future. Can evolve into a vast network that maximizes interoperability, shares decentralized protocols, and standardizes its core primitives, facilitating the flow and growth between chain abstractions and ecosystems.

A sustainable social universe led by Farcaster

Farcaster is a decentralized social networking protocol designed to allow users to connect directly with each other, while developers can access public data without permission, support diverse and flexible client and application development, encourage innovation and experimentation, and provide users with rich social experiences and choices. Farcaster manages user identities on-chain based on Ethereum and OP, but stores messages and posts in an off-chain Hub network to increase speed and reduce costs.

Farcaster is an open social protocol that allows a variety of applications to be built on top of it. Currently, Warpcast is the most popular client on Farcaster. Frames is a newly developed feature similar to an inline applet that allows developers to embed interactive experiences in Farcaster posts (casts). These interactive experiences can range from voting, minting NFTs to building games, and even integrating instant transaction checkout links directly in social media feeds, meeting diverse social platform needs.

For more information about Farcaster and its Frames features, please refer to IOSG's previous insights: IOSG Weekly Brief |Frames: What is the charm of the Farcaster Mini Program? #212作为Base生态的重要组成部分, many products have been derived from Farcaster's open protocol, such as the creator platform Paragraph, the content financialization client Jam, the community task platform Bountycaster, and the developer tool Neynar.

Source: @vahidsuperstar In addition to top-down project construction, Farcaster also has a strong meme culture and wealth creation effect, which undoubtedly plays a great role in attracting users and enriching the ecosystem. Take the leading meme $Degen on Base as an example, it has moved away from the category of primary memes and plays an important role in the entire base social-related ecosystem: $Degen was originally born from the top social protocol Farcaster, and airdropped rewards to active users of the /degen channel. With the launch of Farcaster's mini-program feature in February this year and the opening of registration for the Warpcast client, there has been a surge in user numbers, and $degen has gained more attention.

The first airdrop distributed 15% of the total amount, and users can still earn rewards by making LPs on Uniswap, participating in meme competitions on Farcaster, and receiving tips. The team raised 490.5ETH in an angel round, and individual investors were mainly Ethereum OG, led by 1Confirmation. Degen has also built its own L3 with $degen as the base token, with a current market cap of $1.24b, according to the team's website.

At present, it is worth paying attention to a trend that many emerging projects in the BASE ecosystem use $DEGEN as a project utility token, relying on the huge flow of $DEGEN holders to achieve the cold start of the project. For example, perl_xyz, users who play games on a daily basis are rewarded with $degen, and users are able to withdraw/deposit $degen or convert to $perl within the app, and the project also receives an ecological reward of 10M Degen. drakulaapp, Web3 Tiktok, or the video version of FriendTech, received 20 million degen incentives to reward creators on the app. Prices per creator are quoted in $degen. Superfluid_HQ has developed a framework called StreamYoink, which also uses degen payments.

BracketHQ is a sports lottery game where users can trade votes for sports teams within various sports leagues (NFL, NBA, NCAAB, etc.). http://Rounds.wtf, which was initiated by Nouns, also uses $degen as a token. With the development of base and Farcaster, it became clear that degen would grow from a meme to an integral part of the social graph. A healthier meme culture will also contribute to the long-term healthy development of the ecosystem.

Other social products: many innovative attempts

In addition to Farcaster, there are many innovations and attempts of social products on Base, such as the popular Friend.Tech, which has received nearly $30 million in handling fees in the past six months, and TVL still has nearly $40 million. Friend.tech is a decentralized social application based on the Base chain, which combines the fan economy and on-chain game, users enter a specific room to browse content by purchasing the token "KEY", and the increase in the number of users will push up the price of the key, and the handling fee charged in the process of buying and selling is evenly distributed to the platform and homeowners. For more information about FriendTech, see IOSG Weekly Brief|What makes Friend.tech a phenomenon?#197

Due to the high fee wear, strong speculative atmosphere, and unsmooth product experience, FriendTech's trading activity has declined significantly for a period of time, which is also a problem worth reflecting on in social financialization. Recently, the popular sofi projects also include Web3 Tiktok Drakula, live streaming platform Unlonely, etc. Drakula is a Web3 short video publishing platform, users can upload and publish their own videos or watch other people's videos, platform points Drip can be obtained by making videos, sharing invitation links, completing platform tasks or buying tokens for other creators, and can also be used to reward other creators. Similar to FriendTech, creators on the platform have their own tokens, which are denominated in Degen, and the more popular the creator token, the higher the unit price, and users can view the most popular creators from the platform (the higher the token price, the more tips received).

Unlonely is a Web3 live streaming platform where users can choose to create their own live channels or watch someone else's live stream. The token of the platform is $VIBES, and users can buy vibe for tipping. Users can view the calendar of upcoming events held in Unlonely, search for live streamers, watch live replays, and more.

Community management and user loyalty

Along with social programs, community management and loyalty programs have emerged and evolved, such as Blackbird, a $24 million loyalty and membership platform that aims to create a deeper connection between restaurants and their most loyal customers. Blackbird allows customers to create NFT memberships for restaurants they frequent. These NFTs can unlock a variety of rewards, such as earning $FLY tokens, SMS butler service, and "kitchen surprises" during meals. This approach provides new engagement and value to diners. Blackbird is decentralizing restaurant loyalty programs. It allows users to earn points that are not limited to a single system, and then users have the flexibility to trade $FLY tokens and member-accumulated NFTs on-chain. The system provides customers with a more flexible and valuable form of reward, representing a shift from traditional loyalty programs. Projects such as QuestN provide some help for project advertising and promotion, and project parties can release tasks and tests through QuestN, so as to achieve better promotion, deepen users' understanding of the product, and also provide a basis for user rewards. PartyDAO is a community crowdfunding platform where users can initiate project proposals, conduct crowdfunding, and discuss with interested builders in the discussion room to promote the development of the project.

NFTs & Art

As Jesse, the head of Base, said, Onchain is the next online, and base is committed to bringing artwork and creative content on-chain. zora is also an NFT creation and distribution platform, providing creators with many tools and building its own chain. Thanks to the active base ecosystem, Zora's TVL has increased significantly. Creators can also choose to issue their own projects on NFT minting platforms such as manifold, rarible, etc. The number of NFT transactions on Base has also increased significantly in the past two months, with an average daily trading volume of around hundreds of thousands to millions of US dollars, and an average daily trading address of nearly 10,000.

Source: https://dune.com/k0rean/base-nft-market

Casual games

Unlike other public chains that pursue triple-A/high-TPS games, Base seems to be more interested in mobile casual games. For example, Frenpet is an electronic pet casual game, as a pet raising game based on the Base chain, players can buy props by purchasing Fren Pet's token FP, and earn points by feeding pets and fighting against other players' pets. The higher the points, the higher the ranking on the leaderboard, and the ETH rewards you receive. In terms of communication, Fren Pet generates social fission through the invitation system, and the referrer can get 10% of all FPs spent by the invitee in the app, so as to achieve new user acquisition and promotion with zero customer acquisition cost, so the game is also known as the "FriendTech version of the chain game". A 4% fee is charged when trading FP tokens, of which 2% is awarded to players, 1% to teams, and 1% to LPs. At present, there are about 8k cumulative users, and the market value of the token Fren Pet is 70 million US dollars.

Source: sofamon, a https://dune.com/whale_hunter/fren-petTelegram sticker financialization platform, is currently working on a personal chat sticker marketplace on Telegram, where users can manage their own sticker sets, invite friends, access Sofamon's private group chats, and more. Similar to Friend.Tech, each sticker accessory has a price curve, the earlier the buyer buys the lower the price, and the subsequent buyers enter to push the price higher. Shortly after its launch, Sofamon has traded nearly 7,000 ETH and earned nearly 300 ETH in protocol revenue.

Source: https://dune.com/garythung/sofamon

On ramp and wallet

Most consumer applications or social projects also pay great attention to the threshold of user registration and use, and the user experience has been improved and optimized to a certain extent. Privy, a wallet solution that raised $18 million, aims to solve the contradiction between the poor user experience of multiple wallets and the privacy risk leakage of integrated login through Web3 solutions, users can log in to web3 applications through traditional accounts such as Google and appleid and automatically generate crypto wallet addresses, which greatly reduces the threshold for users to use.

Meme

Memes have become an integral part of social and consumer applications. The current state of the meme coin is highly controversial because its culture is a mechanism that celebrates (approximately) gambling. But imitating online behavior is a very popular entertainment tool on the internet. The airdrop of the Farcaster channel gave birth to a number of memecoins with a market value of more than 10 million US dollars, and the spread and development of these memecoins fed back the entire social ecology, making users more active.

It is certain that memes have become an important means of community and project launch. As KINJAL SHAH, an analyst at Blockchain Capital, puts it, "Although it's still in its infancy and hasn't yet taken its final form, a toolkit for web3 creators is emerging." For example, mechanisms like credits and airdrops reward the use of the protocol. In terms of airdrop design, we still have a lot of room for improvement in terms of maturity, such as the whitelist and the restrictions of the release mechanism, which have the potential to give birth to more specific reward mechanisms.

Further drive its growth through existing communities, on-chain referral rewards, and "token social proof". Paul Veradittakit, a partner at Pantera, also expressed his love and optimism for memecoin: "I know very well that memecoin is not going away. I've seen the next generation see Memecoin as a really fun social activity. While Memecoin looks like a toy, it's a Trojan horse for cryptocurrency. They are the easiest way for the next generation to experience the latest DeFi applications and bring them to Web3. ”

epilogue

Social and consumer applications are undoubtedly the most promising direction for large-scale application of blockchain, and from the current development, we believe that the Base ecosystem is in a leading position. The Cancun upgrade dramatically reduces L2 fees, virtually eliminates gas friction, and dramatically reduces user interaction costs, which can better meet the needs of consumer applications for high-interaction and low-gas infrastructure, and many applications have achieved higher revenues relying on transaction fees alone. As an L2, Base has unique advantages and community taste, which makes Base have the potential to attract a large number of new users and achieve mass adoption, and more and more users are expected to join the Base ecosystem and achieve the goal of Mass Adoption.