Technical Overview & Gaming Ecosystem
Introduction
1.1 Rapid Growth of L2 Solutions
The interest in Ethereum layer 2 in the blockchain industry is growing every day. With the onset of the bear market, the size of the cryptocurrency market has decreased significantly, but the TVL of the Ethereum layer 2 networks has been steadily moving upwards, defying market conditions.
What is Ethereum layer 2 and why is it getting so much attention? Ethereum layer 2 refers to a network that is highly scalable by performing computationally intensive execution off-chain, while storing transaction data on the Ethereum network to benefit from Ethereum’s data
availability and consensus.
In Vitalik Buterin’s example, the layer 2 network submits a batch containing the state root (e.g. 0xbc892f), which is a summary of the state of the users (e.g. Alice, Bob, Charlie, David), and transaction data (e.g. Alice → Bob 20, etc…) to a rollup contract on the Ethereum network. Therefore, anyone can verify the validity of the layer 2 network on the Ethereum network, and the layer 2 network can have high scalability and security level because the execution process is performed off-chain.
In this respect, the Ethereum layer 2 network is well suited for mass adoption of blockchain:
- High security — The most essential requirement for a blockchain to be used by a large number of users in the future is a high level of security. Ethereum layer 2 is built on top of Ethereum, the most secure smart contract network.
- High scalability — Ensuring high-grade security is critical, but for a blockchain to gain widespread adoption, it also must offer an exceptional user experience. This requirement makes high scalability essential. Ethereum layer 2 boasts fast network speeds and low fees because execution takes place off-chain.
- Secure interoperability — Due to the limiting nature of the blockchain trilemma, mass adoption is likely to occur on multiple chains (or multiple rollups) rather than a single chain. Because Ethereum layer 2 networks share Ethereum as a settlement and DA layer, they can achieve much more secure interoperability than multiple layer 1 networks.
Given these benefits, layer 2 has recently been the focus of significant interest within the blockchain sector, leading to the launch and development of numerous layer 2 networks. Amid these, one contender notably distinguishes itself as a paradigm shifter, namely “Base”.
1.2 Coinbase’s Motivation Behind Incubating Base
Base is an Ethereum layer 2 network incubated by Coinbase, the largest cryptocurrency exchange in the United States. Base is built utilizing Optimism’s OP Stack and uses the optimistic rollup method among other layer 2 solutions. What motivated Coinbase to incubate the Base network and why did they choose the OP Stack?
According to a secret master plan written in 2016, Coinbase aims to create an open financial system that improves economic freedom globally. Coinbase laid out four phases to accomplish this.
- Phase 1: Develop the protocol (1M people) — In this phase, new protocols like Bitcoin, Ethereum, etc. have been launched and a small number of people have started interacting with the blockchain. Coinbase works closely with various protocols to accomplish this.
- Phase 2: Build a digital currency exchange (10M people) — Create a secure, easy-to-use exchange that serves as a bridge for users to exchange their local currency for digital currency.
- Phase 3: Build a mass market interface for digital currency apps (100M people) — The internet grew significantly with the advent of web browsers and then with the advent of mobile devices. In the crypto space, Coinbase expects wallets to fulfill this role and is actively developing the Coinbase wallet.
- Phase 4: Build the apps of an open financial system (1B people) — This is where users actually get access to decentralized applications, and it’s the biggest reason Coinbase incubated Base.
Examining Coinbase’s products, it becomes evident that the majority are not built on smart contracts but rather utilize the application infrastructure employed by existing Web2 companies. To achieve Phase 4, Coinbase realized that they needed to leverage on-chain environment even more, and after much thought about how to develop dApps and where to deploy them, Base, a rollup network based on the OP Stack, was launched.
Coinbase already has $130B in crypto exchanges and over 100 million users. In order to onboard many users to a decentralized network, it’s important for the network to be scalable and secure. Base meets all of these requirements because it’s a rollup network based on Ethereum. Furthermore, Base is built on the open-source OP Stack, which means that anyone can contribute technically and rely on the infrastructure of the Optimism ecosystem for ongoing operations without the need for tokens.
In this article, we will focus on the OP Stack that Base is based on and how it can be synergized with the gaming sector, which is one of the most important sectors for mass adoption of blockchain, as Base is a network suitable for mass adoption.
2. Technical Overview
2.1 OP Stack
OP Stack is the open-source software behind the popular optimistic rollup project, Optimism, with developers from Coinbase serving as core developers of OP Stack. Developers looking to create a layer 2 network can utilize OP Stack to easily build an Ethereum layer 2 network (OP Chain). Recently, there are also rollup-as-a-service (RaaS) tools like Conduit and Caldera that make it easy to create a layer 2 network using the OP Stack without any code.
The OP Stack is composed of six layers, and developers can use any components from each layer to modularize their OP Chain:
- Data Availability Layer — This layer serves to store the transaction data (raw inputs) of the OP Chain, the most widely used being Ethereum.
- Sequencing Layer — This layer is responsible for ordering the transactions submitted by users to OP Chain, and currently supports a single sequencer, but there are plans for multiple sequencers in the future.
- Derivation Layer — This layer is responsible for determining how the raw transaction data stored in the DA layer is processed and sent to the execution layer.
- Execution Layer — In charge of the execution environment of OP Chain, EVM is typically supported.
- Settlement Layer — This layer plays a role in finalizing the state of the OP chain, and currently uses a fault proof system based on attestation, but in the future, a permissionless fault proof system that can be challenged by anyone or a validity proof that utilizes zero-knowledge proof can be introduced.
- Governance Layer — This layer is responsible for things related to the governance of the OP Stack, such as the multisig contract responsible for upgrading the current rollup smart contract, or the governance token.
The OP Stack open source codebase is not static as above, but is constantly evolving, with the most recent release being Bedrock. Bedrock brings a number of improvements over previous versions, including more modularity, more efficient batch compression, and lower fees.
Here’s how OP Chain works:
- op-geth — Accepts transactions and updates the old state to the new state.
- op-node — Responsible for processing the raw input of the DA Layer for the execution layer, and corresponds to the Derivation Layer of the OP Stack above.
- op-batcher — Responsible for compressing transaction data from OP Chain and storing it on the Ethereum network.
- op-proposer — Responsible for submitting a state root for the state of the OP Chain to the Ethereum network.
The main smart contracts and transaction flows on OP Chain are beyond the scope of this article, so please refer to this article .
2.2 Superchain
OP Stack doesn’t just provide tools to easily create layer 2 networks, it also has a vision for the future: Superchain. Superchain is a network of layer 2s created with OP Stack that share bridging, governance, upgrades, communication, and more to form one large ecosystem.
Although the Ethereum layer 2 network provides both security and scalability, its limitations are obvious due to the nature of the blockchain. Therefore, in order to pursue higher scalability, it is necessary to build a multi-layer 2 chain ecosystem that not only improves vertical scalability but also pursues horizontal scalability. However, this approach usually creates various problems, and the Superchain vision aims to solve them.
The first is the problem with cross-chain interactions. When cross-chain interactions are executed between various OP Chains, the 7-day challenge period degrades the UX. To solve this problem, ZKP can be introduced, but it is not easy to introduce ZKP immediately because of the immature technology and high cost. Therefore, Superchain tries to have various bridging options for different situations by having different proof systems. If you need high security, you can use a longer challenge period, if not, you can use a shorter challenge period, and you can also use a third party trusted entity to perform bridging.
Another problem with cross-chain interactions is the difficulty of synchronous composability. For example, if you have an arbitrage opportunity on one network, you can perform a transaction to sell a certain coin on one DEX and buy it on another DEX at the same time, but if you have an arbitrage opportunity on two different networks, there is no guarantee of atomicity to perform both transactions at once. Superchain makes this possible by allowing multiple OP chains to share a sequencer.
The second is the lack of a dApp framework that spans multiple OP Chains. While not yet finalized, Superchain intends to address this in the following ways:
- Content-addressable smart contracts — Allows a service to have contract addresses from the same address on multiple networks.
- Cross-chain contract state management standards — By making it easy to migrate the state of a smart contract to another network, OP Chains can be utilized as a kind of shard for improved scalability.
- Superchain RPC endpoint — Creates a single RPC endpoint, allowing users to send their transactions to any OP Chain. This eliminates the need for users to switch wallet networks when the network changes.
3. Base Ecosystem
3.1 Major Players in the Base Ecosystem
In summary, Base is built on the OP Stack and is technically ready to onboard a large number of Coinbase users. But what about the application side? While the infrastructure to drive mass adoption is important, it’s the existence of services that are used by a large number of users that will ultimately complete the picture. Base has a solid ecosystem in place, as it has already onboarded some of the leading protocols from various sectors. Here are some examples:
- Oracle, Indexing, API — Chainlink, Pyth Network, Covalent, The Graph
- NFTs — Magic Eden, Animoca, AnotherBlock, OpenSea, Zora
- Wallets — Metamask, Coinbase Wallet, Gnosis Safe, Rainbow Wallet, Rabby Wallet, Trust Wallet, Brave
- Infrastructure — QuickNode, Infura, Blockdaemon, ThirdWeb, 1RPC, Biconomy, Fireblocks
- Bridge — Hop Protocol, Satellite, Layer Zero, Across, Celer, DeBridge, Wormhole, Bungee, Socket, Stargate Finance
- DeFi — Aave, SushiSwap, Gauntlet, Balancer, Gelato Network, Beefy, Compound, Panoptic, 0x, PoolTogether, Rhino.Fi, Uniswap, Dodo
- Social — Cyberconnect, Galxe, Mirror, Layer3, friend.tech
- Dev Tool — Truffle, Foundry, OpenZeppelin
3.2 Exploration of Base’s Advantages Within the Gaming Sector
Among the many applications, the gaming industry stands out as a sector with immense potential to drive mass adoption of blockchain. In this section, we will explore the synergies between Base and the gaming sector.
- Strong security & high scalability — Because Base is based on the OP Stack, it can rely on Ethereum’s strong security and be highly scalable. In fact, the Lattice team has already leveraged the OP Stack’s high scalability with OPCraft, a fully on-chain game of Minecraft on top of the OP Stack.
- Dev environment — Although the EVM module in the OP Stack has very slight differences from Ethereum’s EVM, the execution environment provided by Base goes beyond EVM-compatible to EVM-equivalent. Therefore, existing Ethereum smart contract developers can take advantage of the language and development tools. Additionally, Gelato and Safe are developing SDKs that will allow the Base ecosystem to easily utilize Account Abstraction technology, so game developers can leverage this feature to provide a user-friendly UX.
- Modularity — Because Base is based on the OP Stack, the components that make up the core network can be easily customized layer by layer. In addition, in the future, it can support various types of bridges and proof systems, so game companies can customize infrastructure services to suit their game characteristics.
- Coinbase’s network effect — Coinbase is already a huge platform with over 100 million verified users, so if Base integrates well with the existing Coinbase platform, it can expose game services to a huge number of users.
3.3 Gaming Ecosystem
In fact, Base will have a number of different gaming projects onboard. Let’s take a look at them one by one.
3.3.1 Palette
Palette is an NFT-based non-profit social art experiment. Users can join clans to combine colors and compete using the Palette Colours NFT, an ERC-1155 token. Because Palette is built on Base, transactions involving the minting and combining of large numbers of NFTs can be processed inexpensively and easily leverage existing features in the Ethereum ecosystem, such as ERC-1155 and SBT.
3.3.2 Animoca Brands
Animoca Brands is one of the leading names in blockchain gaming, developing, publishing, and investing in blockchain games. The company has developed and published games such as The Sandbox, Phantom Galaxies, and Crazy Defense Heroes, collaborated with leading companies such as Disney and WWE, and has various subsidiaries such as The Sandbox, Blowfish Studios, Quidd, and TinyTap. Animoca Brands is expected to enrich Base’s gaming ecosystem through aggressive development and investment activities.
3.3.3 Daz 3D
Daz 3D provides 3D assets that can be utilized in video and games, and has experience in providing Web3 NFT services in collaboration with leading companies such as Nike, Warner Brothers, Atari, Coca-Cola, Estee Lauder, and Ledger. Daz 3D is expected to support the NFT ecosystem by collaborating with various media and gaming projects on Base.
3.3.4 ISKRA
Iskra is a web3 gaming platform that provides players and game developers with a premier destination to explore the thrill and excitement of Web3 games. Founded by a team of gaming veterans and web3 pioneers, Iskra has raised $41 million in seed funding.
Iskra utilizes a unique community economic system, whereby members of the Iskra community receive a fair share of the platform’s performance based on their contributions to the platform. This contribution is represented by CP (Contribution Points), which can be earned in proportion to the fees incurred when using the platform, or by staking $ISK tokens or premium NFTs, PNFTs.
Iskra’s ultimate goal is to be a community-driven gaming platform, gradually handing over control of the platform to the community and eventually envisioning the Iskra DAO being responsible for the operation of the Iskra platform.
3.3.5 Parallel
Parallel is a sci-fi based NFT card game that successfully raised $50M in funding from Paradigm and others at a $500M valuation in 2021. The game will begin beta testing in July 2023. Users will be able to earn $PRIME tokens by playing games utilizing NFT cards. While Parallel was previously based on Ethereum, it will now also utilize the Base network, which is expected to provide even greater scalability for users.
3.3.6 Vaissel
Vaissel is a web3 focus-to-earn lifestyle app that allows users to set the amount of time they want to focus and get rewarded for not using their smartphone.
3.3.7 Thirdweb
Thirdweb is a service that makes Web3 development easy for developers by providing a variety of SDKs. Recently, Web3 Warriors utilized thirdweb to launch an on-chain survival game on the Base Goerli testnet in less than three weeks. Thanks to thirdweb’s convenient tooling, Web3 Warriors users can use features such as invisible wallets and gasless transactions, and it is expected that a large number of game developers will be able to easily develop games through thirdweb’s services in the future.
3.3.8 ClashMon: Ignition
ClashMon: Ignition is an in-house game incubated by Iskra and built on Base. It is a web browser-based collectible battle RPG game that redefines the gaming experience within the Web3 ecosystem.
By offering an exciting journey of collecting unique characters and assembling powerful teams, ClashMon ensures users encounter the ultimate fun of gaming. The game focuses on delivering enjoyment through character growth and anticipation of valuable returns, all seamlessly integrated into the web3 gaming world.
4. Base’s Impact
As of August 16, 2023, Base’s TVL (Total Value Locked) is at $230M. Even though it has only been about a month since its launch, it has already recorded figures that are more than half of the TVL of the zkSync Era. Not only that, the daily active address count has recently been averaging around 100k, showing numbers similar to the Optimism mainnet. While there’s still a strong speculative demand present such as Friends.tech and meme coin Bald, as observed above, Base’s ecosystem is growing at an incredible pace. Judging by the influence of Coinbase and L2, the outlook for the Base network seems very promising.
Given the current number of users on blockchain networks, the impact of Coinbase’s incubated base is expected to be significant. While the number of unique addresses is not an accurate representation of the number of users, as of July 2023, had approximately 6 million unique addresses and had approximately 9.5 million unique addresses . In comparison, had 108 million users as of 2022, which is significantly higher than the number of on-chain users. If Coinbase can organically integrate its platform with Base in a way that lives up to its vision, the on-chain ecosystem will be accessible to an unprecedented number of users.
We also believe that Coinbase’s incubation of Base could have a significant impact on the blockchain industry as a whole, not only in terms of user adoption but also in terms of symbolism. The first is the choice of an L2 network. When traditional companies want to adopt blockchain, they often build their own L1 network, but Coinbase chose an L2 network on top of Ethereum. One of the reasons companies typically want to build an L1 network is to create an environment they can control, which gives up many of the benefits of adopting blockchain. Paradoxically, Base chose an L2 that relies on Ethereum and continues to contribute to the open-source ecosystem, even participating in the technical development of EIP-4844, Pessimism, and OP-reth implementation. If the Base ecosystem grows well in the future, this will set a very good precedent.
Second, they have a clear roadmap to decentralization and are committed to it. While many businesses are beginning to incorporate blockchain technology, often merely giving verbal acknowledgment to a slow shift towards decentralization, Base is actually working with the Optimism team and contributing heavily to the OP Stack’s decentralization roadmap . Base’s 2023 decentralization roadmap includes introducing at least one fault prover, improving rollup upgradeability, and releasing an early version of a shared sequencer, which should be inspiring to many players in the industry.
5. Final Thoughts
However, for mass adoption, it’s not enough to just ensure integration with platforms that have a large number of users. Firstly, the infrastructure must be well-equipped to handle a large number of users, and secondly, there should be a variety of applications available for many users to use. The former issue could be solved by utilizing the OP Stack, and as for the latter, among various applications, gaming, which is likely to attract the most interest from the general public, is expected to play a significant role.
In this article, we looked at the motivation behind the development of Base, the technical background of the OP Stack that underpins Base, and the gaming sector that is most likely to see mass adoption of Base. With the recent launch of Base mainnet, let’s see if it can be a game changer for the blockchain industry.
Special thanks to 100y (Four Pillars) for the review.
About Iskra
Iskra is an all-in-one web3 game platform that offers the latest in web3 games along with blockchain services that include a wallet, DEX, market, governance staking/voting, Mission Card NFT system, and launchpad.
Its unique community system allows the platform to reward both players and developers up to 100% of platform fees, based on their participation. Contribution Points (CP) are awarded based on activities such as running a network node (Pioneer NFT), using platform services or playing games. CP determines your ranking, which leads to increased benefits and rewards.
Backed by some of the biggest technology and video game companies in South Korea, Iskra ranks at the top of games dApp rankings for unique active wallets and engagement.
About Base
Base is a secure, low-cost, builder-friendly Ethereum L2 built to bring the next billion users onchain. It is designed to be the onchain home for Coinbase products, users, and assets, as well as an open ecosystem where anyone can build for them. It is also powered by Optimism’s OP Stack, making it one of the most secure, scalable EVM L2s out there.
As an L2 solution, Base is an easy way for decentralized apps to leverage Coinbase’s products and distribution, and enjoy seamless Coinbase integrations, easy fiat onramps, and access to the $130B assets on platform in the Coinbase ecosystem.
About ClashMon: Ignition
ClashMon: Ignition is an in-house game incubated by Iskra and built on Base. It is a web browser-based collectible battle RPG game that redefines the gaming experience within the Web3 ecosystem. By offering an exciting journey of collecting unique characters and assembling powerful teams, ClashMon ensures users encounter the ultimate fun of gaming. The game focuses on delivering enjoyment through character growth and anticipation of valuable returns, all seamlessly integrated into the web3 gaming world.
Originally published at https://news.iskra.world on August 22, 2023.
