• Coinbase’s Layer 2 solution BASE and Optimism have joined hands in their new Optimism Collective initiative.
  • This alliance consists of two major improvements – shared upgrades and fee contribution.
  • This collaboration is bullish for both projects, especially Optimism’s OP token, which is set to benefit from the upcoming Ethereum upgrade.
  • On-chain metrics reveal investors are already accumulating bags of OP on the recent dips. 

Coinbase’s Layer 2 solution BASE has triggered an on-chain bull rally. Built on Optimism’s OP stack, BASE’s popularity has allowed many investors to turn a few hundred dollars into impressive returns. In a recent announcement,  Layer 2 scaling solution Optimism said it is collaborating with BASE, an alliance that could benefit OP holders.

Let’s dive deep into the collaboration. 

Also read: Optimism, Sui, Hedera prices brace for over $138 million worth in token unlocks

Optimism welcomes BASE 

Optimism gained popularity after its launch in May 2022. The launch of Coinbase’s Layer 2 solution BASE using the OP stack propelled the token by nearly 20%. Optimism and BASE entered an alliance on August 24 that is set to be mutually beneficial for both parties. For Optimism, however, this move will help it for years to come. 

Optimism welcomed BASE to the Optimism Collective with a few terms and conditions.

  • Shared updates: According to Optimism, shared updates or shared standards is an incentive to coordinate and will drive disparate chains to cohere into a collective network. In this regard, there will be a shared committee that will oversee rules for updates.
  • Fee split: The collaboration comes with a fee contribution understanding between the two projects. A fee of either greater than 2.5% of BASE’s total sequencer revenue or 15% of BASE’s net on-chain sequencer revenue will go towards the Optimism collective.  On-chain sequencer revenue is the difference between the L2 transaction revenue and L1 data submission costs.
  • Optimism will allow base an opportunity to earn nearly 118 million OP tokens over the next six years. Only 9% of this token treasury will be used to vote in OP governance.

Could BASE’s on-chain summer be taking cues from Compound’s DeFi summer of 2020?

Coinbase’s BASE opened an official bridge in the second week of August, which caused a flurry of inflows, causing a massive spike in activity and Total Value Locked (TVL). In just a few hours, it overtook many prominent Decentralized Finance (DeFi) platforms in terms of fees generated, surpassing prominent L2 platforms in terms of revenue and daily transactions. Given that the popularity generated was partly driven by friend.tech, it is still quite impressive. 

The Compound platform kickstarted 2020’s DeFi summer by launching liquidity mining, attracting so much capital that DeFi’s TVL hit billions of dollars. Likewise, it looks like BASE has kickstarted a 2023 on-chain summer with the potential to attract even more capital in the near future. Considering the boring Bitcoin price action and that crypto markets have become dry, it is possible if developers flock to it. 

If such a scenario does come into play, the existing collaboration between Optimism and BASE will ultimately reflect positively on the Optimism ecosystem and OP token holders. Such a scenario could kickstart a rally for OP.

Ethereum’s EIP-4844 could be fuel that propels OP’s rally

Lastly, we have the EIP-4844, which will implement the Protodank Sharding and vastly reduce fees for Layer 2 solutions. Such a development is likely to be bullish for Optimism’ OP token, which is already seeing massive developments from a fundamental perspective.

Read more on this topic:

Why Ethereum’s EIP-4844 could kickstart bull run for Optimism (OP), Arbitrum (ARB), Polygon (MATIC)

When is EIP-4844, and why is it considered the biggest game changer for Ethereum?


Like this article? Help us with some feedback by answering this survey:



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Arbitrum community opens vote for 200 million ARB Gaming Catalyst Plan proposal

Arbitrum community opens vote for 200 million ARB Gaming Catalyst Plan proposal

Arbitrum community opened a vote for its Gaming Catalyst Program (GCP) to boost support for game builders in the ARB ecosystem. The plan is to strategically allocate 200 million ARB to game projects within Arbitrum. The token has sustained its gains from the week.

More Arbitrum News

ONDO extends gains by 4% with rise in non-empty wallets, hits new all-time high

ONDO extends gains by 4% with rise in non-empty wallets, hits new all-time high

Ondo extended gains by 75% increase in the past 11 days, per crypto intelligence tracker Santiment. The token ranks among top trending assets on the platform, with a massive spike in non-empty wallets. ONDO added 4% value to its price on Sunday, sustaining 40% gains from the week. 

More Ondo News

Aptos user transactions hit record high, APT eyes over 20% gains

Aptos user transactions hit record high, APT eyes over 20% gains

Aptos user transactions in a single day reached 97.488 million. The number of user transactions and Transactions Per Second, both metrics hit a record high, supporting the thesis for price gains in APT. The rise in transaction-related metrics can be attributed to Tapos, a viral clicker game where users can earn rewards. 

More Aptos News

US Presidential candidate Donald Trump is open minded to cryptocurrency, supports right to self custody

US Presidential candidate Donald Trump is open minded to cryptocurrency, supports right to self custody

US Presidential candidate Donald Trump shared positive views on crypto, posting on social media platform, “I am very positive and open minded to cryptocurrency companies and all things related to this new and burgeoning industry.” 

More Cryptocurrencies News

Bitcoin: BTC struggles, but $80K is at striking distance Premium

Bitcoin: BTC struggles, but $80K is at striking distance

Bitcoin (BTC) price is in a good position to resume the bull rally despite the recent struggle. Optimism will restart if BTC overcomes a critical hurdle and flips it into a foothold. In such a case, the pioneer crypto will be slated to push to a new all-time high (ATH). 

Read full analysis

BTC

ETH

XRP