Net Inflows Surpass Solana, Is the "Base Era" Approaching?

Original Title: Base Season: My Thesis

Original Author: ZENECA

Original Translation: Plain Blockchain

In this article, I will share why I believe Base is still very important, the areas within Base that I am currently focused on, and how you can get involved from an operational standpoint. I will provide an ecosystem overview and share some indicators that have further convinced me that the "Base era" is just around the corner.

However, before diving deep, it is necessary to first state some obvious things: most of the content covered in this article, as well as the majority of projects in the current crypto market (especially those related to memecoins), carry extremely high risk, with a massive bubble, and almost everything could potentially crash by 95%-100% from current levels. Like others, I am attempting to trade this market, selling when I believe the price is near its peak and gradually locking in profits as the price rises. In fact, I have already cashed out some gains.

Don't be a stubborn "diamond hands" holder, and do not refrain from selling due to others' moral coercion. Ultimately, you must do what is most advantageous for yourself. If your investment has reached an amount that could change your life, then sell, cash out, and alter your life.

I have seen too many people lose a significant amount of capital from the peak all the way back to square one, so I am mentioning these risks here. The following are my personal views, which may be incorrect, ill-timed, or have other issues. The importance of "doing your research" (DYOR) has never been more prominent.

Next, let's start with Coinbase and discuss why I am bullish on Base.

1. Reason One: Coinbase is a Major Player

Coinbase is one of the world's largest and most influential cryptocurrency exchanges, as well as a significant player in the crypto industry. Whenever a memecoin lands on Coinbase, memecoin investors worldwide rejoice, as they know that this usually means the token's price will (generally) rise. This is because Coinbase provides a convenient channel for regular users (or general crypto enthusiasts) to trade these tokens.

Coinbase's mission is to increase global economic freedom and bring one billion people onto the blockchain. While they would be happy with any blockchain having a billion users, it is evident that they are particularly keen to attract those users to their own Base chain.

I believe that most people still underestimate the power of Coinbase's marketing machine and its significance as a company.

As one of the largest exchange platforms in the United States, Coinbase not only holds a key position in the business world but also frequently represents the entire crypto industry in legal and political battles.

Last year, when the SEC decided to sue Coinbase, it was one of the rare moments in the crypto space where almost everyone united under the same cause. Nothing brings a group together more than a common enemy. Of course, there were some dissenters, but forget about them; they are insignificant and hardly worth mentioning.

Regarding Coinbase, I would also like to add that this company seems to be filled with sincerity from top to bottom, and its employees are excellent. Not to say that other exchange platforms cannot achieve this, but the atmosphere emanating from Coinbase is particularly positive.

In conclusion, to put it simply, Coinbase is a very important player. They have their own Layer 2 blockchain, which will probably also be a significant event worth paying attention to.

Speaking of Base, we cannot overlook Ethereum—a blockchain that is both loved and hated. However, I believe the era of ETH is also approaching...

2. Reason Two: The Era of ETH

By the way, Ethereum is also a major player. I know that nowadays, criticizing Ethereum on social media seems to have become a popular trend, but honestly, I think these voices are just a few loud opinions on Twitter. Most influential people generally do not spend all day on Twitter. Of course, this applies to all blockchains, but it is especially true for Ethereum (partly because many have already moved to Farcaster).

I won't deny that Ethereum has indeed experienced some setbacks. Over the past 12-18 months, it has been "outperformed" in many aspects by Solana (SOL). It is slow, expensive, and due to the existence of numerous L2s (as well as L3s), the entire ecosystem seems somewhat fragmented and clumsy.

Nevertheless, Ethereum remains the second-largest blockchain by market capitalization, with its market cap almost four times that of its closest competitors.

Among the 328 blockchains tracked by DeFi Llama, Ethereum still holds over 50% of the total locked value (TVL). It's truly a "zombie chain" (lol).

Apparently, Ethereum's price performance has lagged behind almost all other coins this year. But I believe this situation is about to change.

This is the ETH/BTC chart for the past about five years. Clearly, Ethereum's performance in these two years has not been ideal! But anyone with some knowledge of charts, the market, and investing will tell you that this is a buying opportunity, not a time to sell.

18-24 months ago was the time to exchange your ETH for BTC or SOL.

I'm not saying you have to exchange ETH for BTC or SOL now, but what can be said for sure is that the timing for the exchange now is much better than at any time in the past few years.

Yes, yes, I'm going to bring up this old chestnut again, but it's just so accurate and applicable. The best time to buy SOL was at the peak of panic after the FTX collapse.

I must admit that I was a little late in my response to SOL's magical performance in this wave of gains (at least relatively, I entered when SOL was around $40). And as a stubborn ETH bull, I may have continued my bullish stance longer than a qualified trader should. But the reason I've been bullish on ETH all along has its reasons, many of which are mentioned in this article.

Many people's dissatisfaction with ETH mainly comes from the friction when using the chain, such as high gas fees and slow transaction speeds. L2 has solved many of these issues, and they are quickly catching up in their own weak areas. So we come to...

3. Reason Three: Friction of Use is Rapidly Disappearing

One of the key reasons for Solana's recent success is its focus on consumer applications and end-user experience. They have minimized usage resistance as much as possible, and it is undeniable that, compared to other major blockchains, the barrier to entry for ordinary people to use the Solana blockchain is much lower. Low transaction fees and fast transaction speeds are important, but user-friendly mobile wallets like Phantom and applications like Moonshot have had a huge impact on user acquisition.

Combined with the popularity of memecoins, especially the buzz around the Pump Fun protocol, and the network effects brought about by these factors stacking, the success of all this is clearly not surprising.

However, I believe that Base is experiencing a similar trend, or is very close to it already. For example, just today, Phantom announced it will support Base:

Over the past few weeks, I have engaged with people in dozens of Discord/TG chatrooms, and I can't count how many times I've heard someone say, "Oh, I only have SOL in my wallet, I don't know how to use Base."

I think this is just the beginning, and next, we will see more and more protocols and applications start to support Base, while also seeing more applications native to Base emerge.

Additionally, many people still have fresh memories of the high gas fees on Ethereum and the poor user experience of MetaMask in 2021, but they have not yet experienced the convenience of interacting with Coinbase Wallet natively integrated with Rabby, Rainbow, Phantom, or Base (which holds USDC that can earn a 4.7% native yield, quite nice) with Base.

4. Reason Four: Strong Team

When investing in a traditional investment company or project, I always believe in betting on excellent talent. Base has a group of very strong and extremely trustworthy team members who are working their magic:

Brian Armstrong casually meeting with Trump to discuss cryptocurrency policy. By the way, Brian is truly an extraordinary figure, you can read this article from 2020 (yes, sorry, I'm asking you to read more again) and reflect on what the world was like at that time, the political stances of most major tech companies at the time, and then compare it to the completely different approach Brian took in leading Coinbase.

Next is the face of Base, Jesse Pollak, who leads both Base and Coinbase Wallet at the same time.

I have actually saved dozens of tweets as I was looking for some tweets that I could post here to showcase his personal traits, especially how he has shaped Base into what it is today. Going through his Twitter timeline is truly endlessly exciting. I recommend you take a look yourself, but for the lazy ones, which are 99% of you (if I were in your position, I would be too), here are a few of my favorite tweets:

Jesse is on a 21-day global tour, visiting builders and leaders, spreading the good news:

Regarding attempts to break into Instagram and TikTok:

On understanding meme culture (recommended to watch the video):

And much more. The above are just two outstanding individuals striving to achieve Base's goals. Supporting this team feels quite reassuring.

5. Reason Five: Strong Data Performance

The data shows a significant increase in activity on Base, along with a considerable inflow of funds. For me, the most crucial indicator to predict whether a chain is likely to achieve significant success is: 1) the number of builders/developers creating applications; 2) whether funds are flowing into that chain.

Looking back over the past three months, Base's net fund inflow is nearly on par with Solana:

Looking back over the past week, Base's performance far exceeds all other platforms:

Trading volume is also steadily increasing, with a recent uptick in the past few days:

Over the past few days, many of Base's AI agents have gained significant attention on Twitter:

Overall, it is evident that traffic and attention are moving towards Base. Whether this can be sustained or is just a temporary fluctuation remains to be seen. Many argue that this is merely temporary, and Solana will retain most of the focus in this round. I obviously disagree, but I am not arrogant enough to think that I am always right and others are always wrong.

The data looks promising, but data can be temporary.

6. Reason Six: Airdrop Speculation

I want to make it clear that this is purely speculative, and I have no insider information about whether there will be a Base Token. They have explicitly stated that there will be no Token, but similarly, Optimism and many other chains have made similar commitments in the past.

However, with significant changes in the legal and regulatory environment, I do not completely rule out the possibility of an airdrop at some point in the future.

That being said, I will not focus too much energy on this. I personally consider it a bonus rather than something to always keep in mind. I suggest using the chain normally and engaging in some experimentation or exploration, as this is usually the best way to participate in an airdrop when the protocol does indeed conduct one.

So, those were the six reasons why I am bullish on Base and believe that Base Season may be around the corner. Now, let's delve into some key areas of interest and where I spend my time on Base:

7. Base Chain Ecosystem

1) Virtuals Protocol

You may have heard of Virtuals by now, either through my tweets/retweets or other discussions on the timeline. In simple terms, Virtuals is a platform that serves as a launchpad for on-chain AI agents. In their own words:

Over the past few months, it has seen slow but steady adoption, with a slight uptick a few weeks back and a parabolic rise over the past few days.

I probably don't need to tell you that AI is currently a hot topic in the crypto space and may well be a mainstream topic and industry for some time to come, if not forever. We've already seen AI meme coins like GOAT and ZEREBRO take Solana by storm, with many other projects performing well too.

Currently, the market value of top AI tokens and agents on Virtuals is still only a fraction of Solana's heavyweights. However, if you consider the capital flow and anticipate an ETH season + Base season, I believe focusing on the Virtuals ecosystem will be one of the best places to look.

The two tokens I am personally most bullish on (and hold the most of) are AIXBT and VADER, in addition to the native token VIRTUAL. I hold about 20 agent tokens on the platform and many more agents that I believe will perform well, given their already significant market cap, they could outperform the mentioned tokens by a considerable margin.

You can find newly launched Virtual AI agent tokens (and even mint your own). I recommend reading their full whitepaper for a comprehensive understanding of the protocol.

Furthermore, here is a great thread from last month about Virtuals that provides a high-level overview of the concept in an easily understandable manner: link.

2) Farcaster

Base and Farcaster are closely related. Although Farcaster supports and utilizes multiple chains, currently Base is almost devouring the entire world. From this chart, it can be seen that for most of this year, Base has accounted for 60% to 80% of all on-chain transactions for Farcaster users, with this number recently exceeding 95%.

Regarding Farcaster, there have been two recent integrations that have garnered a lot of attention, namely clanker and anoncast.

Clanker is an AI agent deployed on Farcaster that helps users deploy Tokens, and anyone can simply request it to create a Token by mentioning it with @. It provides liquidity for the Token using its own funds and charges a fee to the creator. People see it as Base's "pump fun," but I don't believe this is a fully equivalent comparison.

This website is a good place to track new clanker Token releases.

Anoncast is a very cool technology that allows people to post content 100% anonymously on Farcaster or even Twitter through zk-proof technology (which I wrote about last year). You can post content through this website and need to hold anon Tokens (as a utility for tagging).

With developers and experimenters trying various new implementations, things are evolving rapidly, and it is worth paying attention to and delving into Farcaster's development.

I recommend watching this interview where ThreadGuy interviews one of Farcaster's founders, Dan Romero.

3) "Old" Currencies, Memes, Traditional Memes, etc.

While most of the current focus is on the two mentioned areas, especially with AI-related currencies garnering most of the attention, I believe it is also worthwhile to pay attention to some of the old coins that have been around on Farcaster for a long time and have some loyal communities.

There are too many coins to list them all, but by checking the Base page on Dexscreener and sorting by market cap, you will find some good old-school Memecoins.

I speculate that if we indeed enter Base Season, there might be a moment when the focus shifts from AI/Farcaster content to cute animals and traditional memes (or maybe both concurrently).

Although the Virtuals ecosystem has recently experienced explosive growth, many of these old coins have also seen a decline during the same period. Remembering the old adage "Be fearful when others are greedy, and greedy when others are fearful," now might be a good time to observe those areas that people rarely pay attention to.

4) Other Points of Interest

I was planning to write a whole paragraph here, but I just saw a fantastic tweet covering 10 cool apps to try, 10 ways to earn on-chain rewards, 10 communities worth joining, and 10 articles worth reading. So, since that's the case, I won't ramble on anymore; let's just take a look at that tweet.

https://x.com/davidtsocy/status/1861507879792189769?s=46&t=sQ0QVUQyoiZQeVyh-DXZpg

There are countless other cool things being built on Base that I clearly cannot cover. The items mentioned above are just the content I personally focused on in the past few weeks, but I recommend you explore on your own and find the areas that interest you.

Well, that's where my focus lies; finally, a few words on the logistics side of things.

I've received many questions about the onboarding process on Base, so here's a quick start guide/some tips:

If you have funds in your Ethereum wallet, you can bridge your funds to Base through websites like Relay or Bungee. These platforms are very user-friendly and have low fees, with bridging typically taking only about a minute.

If you have SOL funds in your wallet, you can also use Relay for bridging, or select the bridging option directly in the Phantom wallet.

If you want to trade on Base, you can, like me, not use trading bots and manually trade 90% of the time, but there are also some trading bots that support Base, and I guess there will be more soon. The two most popular trading bots are BullX and Photon (disclaimer: these are referral links).

The primary decentralized exchanges for trading tokens on Base are Aerodrome and Uniswap. Personally, I prefer using the decentralized exchange aggregator LlamaSwap, which can find the cheapest trading path for you and help you get the best exchange rate.

Trading Virtuals Tokens is a bit different because all AI agents can only transact using the native VIRTUAL Token. The simplest way to trade is through their website, but you can also exchange Virtuals Tokens using LlamaSwap as long as you select KyberSwap as the decentralized exchange platform.

If you are looking for a wallet that supports all Base/EVM Tokens, I personally use and recommend Rabby, and I have also heard that Rainbow Wallet is very good. Of course, Coinbase has its own wallet, but honestly, I think it is not as feature-rich as the other two wallets (or maybe I am just not familiar with it).

8. Conclusion: Final Thoughts on SOL and Base, and a General View on Blockchain Competition

I have always felt that the intense competition between blockchains is somewhat unnecessary. Personally, I see the "competing chains" as friendly rivals, much like the USA and Canada, or Australia and New Zealand. We tease each other, make jokes about Solana occasionally having issues, Ethereum's gas fees being exorbitant, and well, Cardano being Cardano.

However, ultimately, if you are here to make money (I guess 99% of people are), then you should maintain an open mind, experiment, and go with the flow.

If you care more about the future of finance, about decentralization and a censorship-resistant future rather than making money, then stick to your beliefs boldly. In this space, you will encounter all sorts of extreme views: Bitcoin maximalists believe that everything except Bitcoin is harmful to the industry; Ethereum enthusiasts think Solana is a menace to the industry; and Solana fans believe Ethereum and Base are a menace to the industry.

There are even some hardcore Bitcoin supporters who dislike ETFs and MicroStrategy, and some who really like them.

I mention all this to say—no matter which side you are on, you will encounter a group of people who think you are foolish and that your views are foolish. To be honest, that's life. You can let it affect you, or, like me, accept it calmly, go with the flow, follow the money, follow the developers, follow the attention, most importantly: follow my own curiosity.

I suggest you also try doing this. The most valuable insight (Alpha) is not to follow my curiosity, my posts, or anyone's footsteps, but to follow your own curiosity, delve deep, and think independently.

Original Article Link