Base protocol, a Layer 2 solution by Coinbase, has publicly confirmed it has no current intentions to launch a native network token, instead prioritizing decentralized application development and ecosystem growth despite previous indications of exploring such a possibility.

Executive Summary

Jesse Pollak, head of the Base protocol, clarified at BaseCamp that the network has no immediate plans to issue a native token, shifting focus from initial speculation about exploration towards its core strategy of fostering decentralized application development.

The Event in Detail

Recent statements from Jesse Pollak, head of the Base protocol, have reiterated the Layer 2 network's stance against launching a native token in the near future. This clarification follows earlier discussions indicating that Base was exploring the possibility of issuing its own network token. However, Pollak's public statements, including on the X platform and during BaseCamp, consistently emphasize that the network's priority is on creating tools for developers to build on the platform and developing dApps that offer practical and effective solutions for users. Ethereum's ETH remains the native gas token for transactions on Base, a design choice intended to simplify the user experience and integrate seamlessly with Ethereum-native applications. This tokenless approach is a deliberate strategic decision to concentrate on solving real-world problems rather than managing the complexities of asset pricing and speculation.

Market Implications

Base's confirmed tokenless approach challenges conventional economic models prevalent in the Layer 2 ecosystem, where many competitors like Arbitrum (ARB) and Optimism (OP) have launched native tokens to incentivize participation and govern their protocols. This strategy positions Base distinctly by prioritizing utility, user onboarding, and deep integration with Coinbase's infrastructure over speculative tokenomics. While this removes a potential source of speculative interest, it reinforces Base's commitment to long-term ecosystem development and regulatory compliance. Revenue generated by Base contributes to the Optimism Collective, aligning its economic interests with the broader Superchain vision, where multiple OP Stack rollups are interoperable. This structure suggests that builders on Base may benefit from OP grants and the Optimism Collective's governance.

Business Strategy & Market Positioning

Coinbase is executing a comprehensive strategic reconstruction centered around the Base chain, aiming to evolve beyond a mere crypto asset management tool into a "super portal on the chain." This strategy integrates social relationships, transaction execution, content distribution, and offline consumption within a closed-loop ecosystem. The Coinbase Wallet plays a crucial role, embedding a MiniApp system and application recommendation mechanisms to serve as a project cold starter and traffic hub for the Base ecosystem. This approach facilitates user discovery of new projects and aims to drive user growth and capital injection into the Base chain. The decision to forgo a native token is integral to Coinbase's vision, streamlining user onboarding and reducing complexity, while maintaining close compatibility with Ethereum's ecosystem. Coinbase Ventures' active participation in Aerodrome governance further demonstrates the strategic consolidation of key financial infrastructure within the Base L2.

Broader Context

Base's tokenomics represent a notable case study in "post-token design," prioritizing practical utility over immediate token issuance. While the OP Stack inherently supports token integration, and market pressures from competing L2s or a future transition to DAO governance might necessitate a token, Base's current model emphasizes building an environment where developers can create applications that genuinely impact users' daily lives. Jesse Pollak has stated that Base's mission is to onboard one billion people into the world of blockchain and Web3 through valuable products, not through the complexities of token management. This approach fosters developer community participation by providing tools and infrastructure, as evidenced by the nearly 4,000 dApps on the Base network as of August 2024.