The ‘crypto degen crowd’ has settled in on Coinbase layer-2, Base

A lot of early volume on Base appears to be from “degen crypto power users”


Base modified by Blockworks


It looks like the crypto degen crowd has found a new home: Base, Coinbase’s brand-new layer-2 network. 

Since bridging over to the new Optimism-based offering was made available, total value bridged to the rollup now exceeds $124 million, according to Dune analytics. 

And a lot of that volume, according to Mike Ippolito, appears to be coming from “degen crypto power users.”

“There were a couple of Base DEXs that popped up very quickly,” Ippolito says on the Bell Curve podcast (Spotify/Apple), with $230 million in 24-hour volume and 700,000 trades immediately following launch. “And there was of course, in true crypto fashion, a memecoin.”

The developer of BALD, Ippolito explains, provided liquidity as the memecoin soared in value but soon “rugged” it, making off with a fortune while driving the coin’s value back to zero. 

“I’m not ultra surprised about how any of this has played out,” he says.

According to Blockworks Research, Base accrued over $700,000 in profit in just the first few days of activity. 

Although it would be overly optimistic to extrapolate the profits of a frenzied first few days out to an annual basis, “it still gives you a sense of what this could be nonetheless, if it really blows up,” Ippolito says.

Laying out a blueprint

Myles O’Neil, associate at the advisory and investment firm Reverie, says companies like Coinbase are “laying out this blueprint for how enterprises can finally build enterprise blockchains without having to say, this is a private blockchain and a walled garden.”

But with the activity that’s taken place on Base in its early days, O’Neil observes, “we’re starting to see what works and what doesn’t work with this plan.”

Rather than heavily curating development on the rollup, O’Neil says Coinbase likely did not want Base to be seen as “opinionated,” creating a “private blockchain” experience. Other enterprises, he says, might be watching the phenomenon and saying, “Maybe we should be a little bit more opinionated, or at least have some sort of standard for deploying that you have to meet in order to deploy on our rollup.”

“And how do we strike that balance when it’s such a competitive space?”

Rollups are furiously competing to attract apps to their chains, O’Neil says. “Some apps would love to associate their brand with Base, but does Base really want to associate their brand with them?”

The speculative explosion of activity associated with the BALD memecoin and its subsequent “rug-pull” is not good for Base, O’Neil says. “More of the same here is not necessarily what we need,” he says.

“Something that is differentiated and really clean and gets through to a larger class of users is more of what we need.”

These are the users we have today

“I think it’s good,” Ippolito disagrees. “What would’ve kind of sucked is if they had made it this corporate KYC [know-your-customer] thing from day one. My soul would’ve been a little bit crushed.”

Allowing memecoins like BALD to thrive, albeit temporarily, shows that Coinbase can “let [their] hair down,” Ippolito jokes. 

“It’s all very well and good to say, ‘Hey, we’d like a more sophisticated class of users.’ Great. Who wouldn’t? But these are the users that we have today, right now.”

“As a crypto protocol right now, [you] have two choices,” Ippolito says. “You can build for your degen audience today or you can build for no one.”

“There aren’t these ‘normie’ people out there that are watching Base saying, man, if only there wasn’t a meme coin here, I’d go in and I’d start [liquidity pooling] on this stuff.”

Ippolito says “really great visionary product designers” are “meeting the market that exists today” while also threading into a longer term vision.

O’Neil wonders if a balance can be struck between a fully curated corporate deployment and the wide-open permissionless approach. “Trust plays an enormous role in all of this,” he says. “Coinbase has been really thoughtful about how to build trust with both the crypto native community as well as the more traditional side.”

“They’re threading that needle to be both what the market wants today as well as positioning itself to be the go-to provider for everybody tomorrow.”

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