New kid on Base: Network effects could onboard the next billion into web3
Oct 31, 2023
Base has gained 1.7M wallets (EOAs) in the two months since its public launch. About 1.5M of these wallets were new to web3, or, at least to Ethereum infrastructure (Ethereum mainnet and L2s).
This pace of growth is nothing short of remarkable, and yet Base’s goal sounds outright fantastical in comparison: to onboard the next billion users to web3.
Let’s take that benchmark literally for the sake of this article. Assuming current pace – roughly six weeks for every million users – it will take 121 years to reach a billion.
User growth has remained consistent, with recent weeks close to or slightly beating the 30-day average. Current success aside, is Base’s ambitious goal strictly aspirational, and unattainable?
Not necessarily. For example, 10x-ing current growth would slash this estimate to 12 years. Sounds like eons for crypto, but this is not an unheard of pace in other industries. As the adage goes, time is going to pass anyway – and with growing blockchain adoption at that.
What Base will need to hit its target are multipliers: sectors and users that will onboard a disproportionately large number of newcomers.
The Base smart contracts that have so far been leading in popularity give an indication of what the multipliers can be.
Unsurprisingly, friend.tech comes out on top, signaling an appetite for a new social experience with SocialFi.
Second is USDbC activity, which is representative of the industry-wide reliance on stablecoins.
And third are the builders making all of this activity possible - smart contract deployments and usage are key to understanding the future of any network, and Base is no exception.
Let's go over each in more detail:
Like most Base conversations today, it is near impossible to bypass a discussion of friend.tech.
Every day, the platform hosts thousands to tens of thousands of users to trade 6M+ “keys”. Its impact on the ecosystem (Base and web3 in general) can be found in attractive features that apply an onchain ethos to familiar web2 concepts like Patreon and Substack.
It is enjoying the network effect common to all social media platforms - other than a few short plateaus in activity, growth maintains a generally upward trend.
Crypto, especially stablecoins, continues to secure itself as a convenient option for borderless currency. With USDC leading global stablecoin adoption, it's no surprise that a bridged version extends those benefits to Base users.
It isn't just SocialFi creating the network effect - currency transfers create opportunities to onboard new users and create recurring users. As Coinbase continues to attract new crypto investors, Base is present as a convenient way to dip into dapps as a next step.
Another driver of network-effects is employment. Opportunities abound for dapp developers in the ecosystem, and as projects grow, they'll seek to hire and onboard not just web2 developers, but with them marketers, designers, legal, operations, accounting, and other non-technical future web3 builders.
As the pool of creators generating apps and experiences for new users grows, they'll work to attract users to the ecosystem to sustain their own projects. This may contribute to a compounding rate of change, if successful.
Base has successfully onboarded nearly 2 million users since mainnet launch, but its goal of 1 billion users is astronomical. And yet, the continued growth of sectors like SocialFi, stablecoins, and web3 jobs suggests it may be possible.
Each of the three sectors described has been seen to have a strong network effect, and as one sector grows, the others benefit from the improvements to the ecosystem itself, creating a positive feedback loop.
There are also several other use cases currently driving Base adoption, such as quests and limited edition NFTs. In addition to beckoning the crypto-savvy, these may appeal to some web3 newcomers, whom Base has certainly tried to tap with onboarding quests and brand partnerships with household names like Coca-Cola.
With so many network effect multipliers in its ecosystem, Base may well become the de facto onboarding layer of web3, and hit its goal of onboarding 1 billion users in a reasonable time frame. But only time and onchain data will tell.
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