Base App Ditches Exclusive Focus on Its Own Chain for Multichain Strategy
The Base App has undergone a significant transformation under its new leadership, shifting towards a multichain trading platform. This decision marks an inflection point in the growth strategy of the Base ecosystem, signaling a departure from its exclusive focus on its homonymous chain.
Jesse Pollak, founder of Base, acknowledges that as the application expands to incorporate assets and functionalities from other chains, it becomes 'less Base-centric.' The functional separation between building the best trading product and developing the chain with the best execution and deepest liquidity is a deliberate choice. This means Base Chain will have to compete on equal footing with other networks without the benefit of a captive distribution channel.
The data supports this decision, with Base currently holding approximately $4.65 billion in Total Value Locked (TVL), processing over $1 billion in daily trading volume, and registering around 262,505 active addresses in 24 hours. However, there is significant concentration in the stablecoin market, with USDC representing 85.6%, implying that the Base ecosystem is highly exposed to the dynamics of one stablecoin issuer, Circle.
The multichain strategy acknowledges that capital and users are mobile, and attempting to retain them through a single-network user experience lock-in has diminishing returns. This approach is supported by Uniswap's precedent, which demonstrates that an application can scale without being exclusively tied to a single network. However, this also raises questions about the structural limitations facing any ecosystem that intends to scale from a walled-garden logic.
The primary risk of the multichain strategy is the fragmentation of the user experience and liquidity leakage. A 'less Base-centric' multichain experience could drive flows to wherever the user experience and incentives are superior, not necessarily toward Base. This risk is particularly acute in the context of stablecoins and payments.