Three Ways To Play the Base Revolution

Coinbase is making major moves in 2024. After raising $1 billion in a private offering recently, it wants to add 1 billion users to on-chain transactions. If anyone has the expertise, experience, and knowledge, it's Coinbase. CEO and co-founder Brian Armstrong is going to make Coinbase the Amazon of crypto, and he will play the part of John Bezos. Aside from their age, do you notice any resemblance?

And just like Amazon made shopping from home cheap, easy, and convenient, Coinbase wants to make crypto an experience everyone can partake in.

Coinbase wants to grow into a nearly $2 trillion company like Amazon. Most people probably don't know this, but Amazon makes most of its money from Cloud Computing services. Also, most people wouldn't guess Coinbase makes more money from its other offerings, not just retail trading.

The Base Layer 2 ecosystem is another opportunity for Coinbase to differentiate itself from competitors, increase its dominance, and grow its bottom line. I've devised three ways to take advantage of the Base Revolution and grow your wealth.

Why is Coinbase so focused on building out its Base ecosystem?

Going on-chain today is a disgusting and complicated experience. Everything from creating a wallet to swapping coins to bridging or staking is not user-friendly. With the way decentralized crypto is set up today, bringing in the masses is not feasible.

Coinbase has the resources and opportunity to bring at least millions of people on-chain realistically. Here are some reasons Coinbase gains by building out its Base ecosystem.

• They already have a gigantic user base of nearly 100 million accounts. What if these users swapped on-chain and paid swap fees directly to Coinbase for the convenience of using the wallet? Today, Metamask charges a 0.85% fee for swapping on their wallet.

• Imagine if these users had a wallet that could be used to pay for items similar to Apple Pay, and Coinbase could receive a fee from vendors for using their wallet. The wallet-as-a-service solution could bring in an entirely new revenue stream.

• By having people use their on-chain ecosystem, more investors will onboard their funds directly through Coinbase. This will increase Coinbase's transaction volume and attract new clients who may consider other platforms like Robinhood or Kraken.

• Today, Coinbase is the Base chain's main validator. Base is making obscene amounts of revenue from high transaction volumes.

How will Base onboard 1 billion users?

Coinbase wants to make going on-chain so easy that users don't even know they are doing so. But how do they do this? First, they are developing a new wallet that differs from traditional Web3 wallets. Instead of having to write down and store confusing seed phrases, the new wallets will have familiar logins, such as emails and social accounts.

The crypto wallet space is extremely messy today. If Coinbase can create an easy-to-setup and transact-with-wallet experience, they are already reducing the challenge of getting people on-chain.

The Coinbase wallet will have built-in account abstraction. This means that more functions will be single-click. Swaps will be done directly from the wallet, and funds will flow easily and seamlessly to and from the user's Coinbase account.

Most importantly, Coinbase wants to build an on-chain environment that is safe, secure, and intuitive. By building everything from the wallet to the network in-house, Coinbase can accomplish this experience from start to finish.

Strategy #1: Buy the stock

The simplest and most obvious way to financially benefit from the new Base ecosystem is to invest in COIN stock. I have already argued why owning Coinbase stock is an absolute no-brainer in my article Don't Fade This Stock's 400% 2023 Increase.

I own and continue buying Coinbase stock. Its current $62 billion valuation seems way too low for the top US crypto company that has a gigantic moat from competitors. Coinbase is diversifying its revenue streams in so many ways, from providing custody services to the ETF, earning massive amounts of interest from USDC deposits, and expanding its Coinbase Pay offerings.

I doubt Wall St. is considering how much money Coinbase is quietly raking in from the Base ecosystem. Based on the Q4 earnings, over 50% of the fees generated from Base transactions went directly to Coinbase.

This revenue stream is because Coinbase is the sole validator for the Base network, meaning they earn a portion of the gas fee from every transaction. Coinbase says they will make this more decentralized in the future, but I imagine it will be when the crypto markets aren't on fire.

Take a look at the revenues generated since Base's inception last year.

For March, daily fees ranged from $200K to $1.7M. If Coinbase gets 50% of those fees from validating, that is an extra $100K to $800K daily in pure revenue. Remember, this is only based on the crypto natives using the Base chain today. How high will these fees be if they can increase the user count on Base by 10x?

COIN stock is a simple play to take advantage of Coinbase stepping up its on-chain presence and being a start-to-finish destination for crypto investors.

Strategy #2: Buy the Base blue chips

Several different cryptos on Base have cracked the $50M valuation. This means that (theoretically) they should be safer plays with lower volatility than a sub-$50M market cap.

And since these coins are more established, the hype will be bigger. Influencers will mention the obvious Base plays because there are only a few. Some names repeatedly mentioned are $AERO, the #1 Dex on Base, and a Solidly fork. After that, it's mainly memecoins. The top memecoins by mentions and valuations are Toshi, Degen, Normie, Doginme, and TYBG.

It's extremely easy to trade memecoin directly from the current Coinbase wallet. To do so, a user must go to the swap feature and select the 'Base' chain. They can then swap from ETH or USDC into any of the cryptos mentioned above.

Strategy #3: Buy low-cap altcoins and memecoins

If you are a high-risk speculator, you may be able to make a lot of money in lower-cap cryptos on the Base network. These options carry much more risk than the coins mentioned in the previous section. Additionally, when treading in the low-cap space, you are likelier to lose everything due to scammy developers or early buyers using new buyers as exit liquidity.

Risk aside, if you invest in the right coin, it can easily double and, if it gains enough steam, could potentially go 20x or greater. The nice thing about lower-cap altcoins and memecoins is that you don't have to invest a huge amount to make potentially outsized gains.

I can see two scenarios that make these lower-capped altcoins take off: 1) speculators who have already made big returns in Toshi, Aero, Degen, Normie, Doginme, and TYBG diversifying or taking some of their gains for lower cap options. 2) New retail entrants join, and the holder count increases dramatically, bringing in new money.

There are plenty of low-cap memecoins in the Base ecosystem. I've found one altcoin with less than a $50M market cap working on real-world assets (RWA): Grand Base. GB, contract address 0x2af864fb54b55900cd58d19c7102d9e4fa8d84a3, has a $44M market cap at the time of writing and can be traded directly in the Coinbase wallet.

I'm invested in a few low-cap memecoins. This is by no means a recommendation. However, I believe these projects are growing organically and have a low chance of rugging.

Memecoin #1) Based Chad $CHAD- contact address is 0x2af864fb54b55900cd58d19c7102d9e4fa8d84a3
Market Cap is $4.7M with 2,933 holders.
Telegram Link: https://t.me/basedchad6969

Memecoin #2) Poncho on Base $PONCHO- contract address is 0xc2fe011c3885277c7f0e7ffd45ff90cadc8ecd12
Market Cap is $11.3M with 3,697 holders
Telegram Link: https://t.me/ponchoBASE

Memecoin #3) $RIKU contract address is 0xd1412d909f67b8db7505ddfcf26cf2303f4b1bb4
Market Cap is $2.2M with 1,750 holders.
Telegram Link: https://t.me/RikuPortal

*Use the contract address when swapping, as copycats are always launching.*

Key Takeaways

The Base ecosystem is seeing massive growth in Total Value Locked, transaction count, and user growth. This increase in liquidity can result in fast pumps of popular coins within the ecosystem.

These three strategies can help you succeed in the Base ecosystem. Do you have a Base project you are investing in that I should have mentioned? Please post it in the comments so everyone else can research it as well.

At the time of writing, I am invested in Coinbase Stock, Toshi, Chad, Poncho, and Riku. I may add any of the coins mentioned in this article.

20x in 20 days… Here's Why Catboy Can Go Much Higher

This information should not be taken as investment advice. Memecoins are extremely risky and often go to $0. Digital assets like crypto and NFTs also involve risk, so you should always perform due diligence before investing. Coin stock also carries risks, and investors need to research before investing.

Follow me on Twitter.