What is Coinbase?

Coinbase is a well-known cryptocurrency trading and investing platform (Centralized Exchange) that offers users the ability to buy, sell, and exchange over 200 tradable cryptocurrencies such as Bitcoin, Ethereum, etc.

“Base” Introduction

Coinbase is joining the competition of Ethereum L2 scaling projects, such as Polygon, Arbitrum, Optimism, Loopring, Starknet, and others, by launching an L2 called Base. The company announced the launch of the Base testnet on Thursday (February 23, 2023) and advised the public to stay tuned for the upcoming mainnet launch.

Base is an Ethereum L2 that offers a secure, low-cost, developer-friendly way for anyone, anywhere, to build decentralized apps. The goal with Base is to make on-chain the next online and onboard 1B+ users into the crypto economy.

The cryptocurrency exchange explained that Base will be open-source and will leverage Optimism’s OP Stack. Coinbase detailed it is also collaborating with Optimism. “We see this toolkit as an open platform that anyone can contribute to, fork, and extend to help the crypto economy scale,” Coinbase’s blog post said.

Coinbase’s Base & Optimism:

Coinbase partners with Optimism as a core developer on the open-source OP Stack, a developer toolkit for the Optimism network. Base will not be limited to Ethereum, it will also provide easy and secure access to layer 2 networks such as Optimism, as well as other blockchains ecosystems like Solana. Since the second half of 2022, Coinbase and OP Labs have been working together on EIP4844, a proto-dank sharding that can effectively reduce L2 network fees by 10~100x, and both sides share the same philosophy and vision of expanding Ether. Later, Coinbase\Base also joined the research team of OP Stack and said that part of Base transaction fees (probably 20%) will flow into OP Collective in the future to continue to promote the development of OP Stack. (Read More)

In addition, there is not much information available yet about how Coinbase will operate within Optimism’s governance structure. Right now that may not be much of an issue, as Coinbase’s activity in the near term will likely focus on launching Base (it remains in testing phases), and adding users and developers. Anyway, Coinbase’s long-term vision for Base is to operate alongside Optimism as part of a network of platforms it calls a “Superchain”. An open secret in crypto circles is that decentralized autonomous organizations (DAOs) are not as decentralized as the name suggests, and Coinbase will need to gauge its level of participation in Optimism’s governance carefully so that it can properly steer the network without upsetting users or running afoul of regulators.

What is Optimism?

Optimism is a Layer 2 scaling solution for Ethereum that can support all of Ethereum's Dapps. Instead of running all computation and data on the Ethereum network, Optimism puts all transaction data on-chain and runs computation off-chain, increasing Ethereum's transactions per second and decreasing transaction fees.

Background & Dashboard Introduction

After Galaxy Quests Deadline, Optimism transactions have greatly decreased, but thanks to the collaboration with Base, the activity over this chain has increased again after the Base announcement on “February 23, 2023”.

On the occasion of this collaboration, I am going to:

• Analyze the overall activity on Optimism and its native token, $OP, around the announcement of “Base” launch and Coinbase collaboration with Optimism, (since 1st February 2023)
• Analyze the “Meet Base” NFT launched on Optimism on the same day as (& for the celebration of) the Coinbase “Base” launch announcement.

The number of transactions, active users, new first-time users and also the number of new deployed contracts on the Optimism chain has increased significantly during the first days after the “Base” launch announcement. Before Feb 23, 2023, we can see there was almost a steady trend line on charts but after the announcement date and especially on Feb 23, 2023, the high spike in 2 above-charts is clearly visible. The number of new users registering on Optimism is the most positively affected metric after the “Base” launch announcement.

But in terms of volume, we do not see any significant high spike on the left chart and we can not say that the overall volume of transactions within Optimism was affected by the “Base” launch announcement.

The price of optimism token ($OP) rose by 6.5% Thursday after Coinbase said it is building its layer 2 blockchain using the OP Stack in collaboration with Optimism. This token has reached its ATH price ($3.06) after this announcement.

Moreover, According to the Santiment data, the largest discussion rate of Optimism has also achieved on the day of the “Base” launch announcement which is another positive impact of “Base” on Optimism and its $OP token.

In addition to the $OP token, Data from CoinGecko shows VELO, the native token of the Largest Optimism-based decentralized exchange, Velodrome Finance, has gained 21% after the announcement.

Optimism-native lending protocol Sonne Finance's SONNE token has jumped 82%, taking its seven-day rally to over 300%.

OPX, the governance and utility token of OPX Finance, has skyrocketed by 144%, while perpetual-focused decentralized exchange Perpetual Protocol's PERP token has seen a 42% rise in its market value. Other lesser-known names like THALE, HND, RING, and PICKLE have also chalked up double-digit gains in the same time period.

According to the above charts, the number and volume of swapping activities within Optimism DEXs and also the number of active swappers on these protocol have increased significanly after the “Base” launch announcement and especially on Feb. 24, 2023. Before the announcement, there was almost a slightly decreasing trend of swapping activities within Optimism chain over time but on the day of the announcement and also during the 1-2 days after that, there are some high spikes which shows the huge increasing swapping activity on Optimism chain.

On the left chart, we can see the daily swapping activity of $OP token within Osmosis DEXs over time and as we see, on the day of the announcement and also during the days after that, the buy-pressure of $OP token is more than its sell pressure and the net volume of $OP swaps especially during the first days after the Announcement, is positive.

According to the above-left chart, Total Value Locked (TVL) of the Optimism has chain was increasing even before the “Base” announcement but the growth rate has slightly increased after the announcement which is one of the many positive impacts of this announcement on Optimism chain.

Moreover on the right chart, we can see some increasing bridging activity (& Volume) via Optimism bridge after the “Base” announcement. meaning that there are more users using Optimism native bridge and also more assets and funds being transferred to the Optimism which is quite positive news for this chain.

“Meet Base” NFT

Overall Activity of $OP Token & Optimism Chain

Based on the above data, till today (4th March 2023) “Meet Base” NFTs were traded 292 times by 204 unique buyers & 248 unique sellers and with total volume of 11.61 $ETH. The average volume of “Meet Base” NFT sales is 0.0352 $ETH and the most expensive sold “Meet Base” token is 0.086 $ETH price.

Moreover, almost 59% of “Meet Base” NFT purchasers have purchased other Optimism NFTs before but there are 95 users (almost 41%) that their first purchase experience of NFTs in Optimism was “Meet Base”.

According to the above charts, 499 “Meet Base” NFTs were minted by 467 unique wallets. (all on Feb. 23, 2023)

The majority of these minters (almost 80% = 393 users) have minted other NFTs on Optimism before but there are almost 75 wallets (almost 20%) that the “Meet Base” is their first ever minted NFT on Optimism.

According to the left charts, the majority of these NFT minters are still holding their minted “Meet Base” but there are almost 43.5% of users who have sold their minted NFT on secondary marketplaces.

Moreover, the majority of these non-holders have sold their minted NFTs in 1 - 24 hours after the Mint process.

Summary & Conclusion

After Galaxy Quests Deadline, Optimism transactions have greatly decreased, but thanks to the collaboration with Base, the activity over this chain and also the price of many Optimism-based tokens (including $OP itself) has increased again after the Base announcement on “February 23, 2023”. This announcement had a quite positive impact on the number of transactions, active & especially new Optimism users, and also the volume of Optimism DEXs. Moreover, The launch of “Meet Base” NFT collection on Optimism chain has attracted the attention of many NFT traders on the Optimism chain which has caused a high spike of NFT trading activity on this chain on the announcement day to the extent that due to this high surge, NFT ecosystem was the most affected section of Optimism chain by “Base” launch announcement. However, the majority of these users were buying into the hype and the sales activity of this collection has decreased significantly over time.

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Based on the above chart, the highest peak of “Meet Base” NFT trading activities was during the first day of the launch on February 2023 (“Base Announcement Day). After this day, we can see a massive decline in number & volume of “Meet Base” NFT sales and also its active traders over time. Meaning that the majority of “Meet Base” purchasers were buying into the hype.

However, the average volume of “Meet Base” NFTs has increased significanly over time meaning that the price of tokens is increasing and maybe there are less people who can afford buying these type of NFTs on Secondary marketplaces.

According to the above charts, the number of NFT sales and also active NFT traders on Optimism NFT marketplace has increased significantly on the day of the “Base” launch announcement. this high activity can be because of the “Meet Base” NFT launch on this chain on the occasion of Coinbase “Base” launch announcement.

Also, we can see kinda increasing volume of NFT sales within Optimism chain after the Announcement day but there were several days with higher volume of NFT sales on this platform.

Methodology

The main tables that I have used for this analysis are Flipside’s optimism.core.fact_hourly_token_prices (for price analysis of $OP token), optimism.core.fact_transactions & optimism.core.fact_token_transfers (for analyzing the overall activity within the Optimism chain), optimism.core.ez_dex_swaps (for analysing the swapping activities within Optimism Decentralized Exchanges), optimism.core.ez_nft_sales (for analysing the NFT trading activities), optimism.core.fact_event_logs (for analysing the NFT minting activity and also deployed contracts and different sections’ activity on Optimism)

“Meet Base” NFT Contract Address = ‘0x4825a7fec488b7a41d1b170fac6961111965bfef’

According to the left chart, the activity on “NFT” ecosystem of Optimism chain has increased significantly after the “Base” launch Announcement (on & after February 23, 2023).

So, we can say “NFT” is the most positively-affected section of Optimism by “Base” launch announcement.