Base token distribution and launch method sparks anticipation.

Author: Unchained

Translation: Baihua Blockchain

This episode of "Unchained" discusses the significant news from Base Camp: Base has announced it is exploring the issuance of a Token for decentralization, causing a stir in the industry. Host Laura Shin, along with guests Ryan and Ico Beast, delves into the implications, potential designs, and impacts of this move. Base's choice to "explore" rather than directly launch a Token may relate to the unclear regulatory environment (such as the Clarity Act) and narrative control.

Guests believe that Token distribution may primarily consist of 20%-40% held by Coinbase, with allocations for the treasury and community, and the launch method may combine airdrops and ICOs, requiring precautions against witch attacks. The Token's use may be similar to ETH, involving sequencer revenue, DeFi liquidity, and potential governance functions. Base insists on building on Ethereum, demonstrating synergy with the Ethereum ecosystem, while also announcing integration with Solana, reflecting a response to competition. The program also explores the positioning of Base, Solana, and others in on-chain competition, predicting that the future crypto market will center around Token generation and trading volume, with competition driving industry consolidation and innovation.

Here is the interview content:

Laura Shin: Welcome to "Unchained," your resource for everything cryptocurrency. I’m your host, Laura Shin. Today we discuss the significant news from Base Camp: Base is exploring the issuance of a Token, a move that has caused a stir in the ecosystem. Our guest is Ryan, who recently worked at Coinbase Ventures, previously at Coin Fund, and is a narrative merchant at Proof of Play, Ico Beast. Welcome, Ryan.

Ryan: Hey, Laura, thanks for having me.

Laura Shin: Jesse Pollock announced that Base is exploring the issuance of a Token for decentralization, despite previously stating disinterest. What was your initial reaction to this news?

Ryan: This is a very exciting development. As Base has evolved, it has achieved significant growth without using a native Token. This indicates that Base has attracted fundamental growth in users and developers. Clearly, the Base team now feels that they have reached a critical mass of developers and on-chain liquidity for the next phase of growth, and they are exploring the issuance of a Token to further accelerate development and compete at the highest level. So, this feels like a natural evolution, but it’s still quite shocking to hear this from a centralized and publicly traded company like Coinbase.

Laura Shin: Why do you think Base chose to announce the exploration of a Token rather than launching it directly?

Ryan: They likely have many unresolved questions themselves. Issuing a Token is not a trivial matter; there are many details to handle, such as distribution, use, and how to publicly discuss it. There are two aspects: First, now that users and developers know there will be a Base Token, this will trigger a surge in activity on Base. Many users will pay for transactions, which will also attract more development teams to deploy on Base. Additionally, they just released the new Bayat TDA and opened the waitlist, and I can imagine that list will only grow longer. Therefore, announcing this news will certainly reignite interest in Base, especially given how difficult it is to compete for market share across blockchains. Second, they may still be trying to resolve many complex details. Another important aspect is that Congress is currently passing regulations and legislation related to the classification of certain Tokens. This is definitely an important input, and they may be waiting for the final outcome before finalizing the specific details of their plan.

Laura Shin: Jesse emphasized that Base is committed to building on Ethereum to benefit from the global interconnected economy. Given the competition between blockchains, what are your thoughts on this decision?

Ryan: This shows a strategic alignment. Ethereum has now charted its own course and is becoming an institutional asset and blockchain. If you ask anyone on Wall Street about three things in cryptocurrency, they might say Bitcoin, stablecoins, and Ethereum. Base is built on EVM, which was an early decision for them. As Ethereum becomes institutionalized as a settlement chain for various assets at the Wall Street level, I almost see Base as a kind of forward-looking, institution- and retail-oriented branch of Ethereum, especially in the U.S. market. The benefit is that they can grow alongside Ethereum. Ethereum continues to have critical mass among developers, and Base is clearly contributing to that. It’s more about aligning with something that is already effective and making the whole bigger through collaboration.

Laura Shin: How do you think the distribution of Base Tokens will be designed? Ideally, what should it look like?

Ryan: A typical Token project distribution usually consists of three parts: the team, early supporters and treasury, and the community. If we apply this analogy to Base Tokens, it corresponds one-to-one. I expect a significant portion to be held by Coinbase, recorded on their balance sheet, likely around 20% to 40%. There may also be an additional 20% held by an independent treasury, managed collaboratively by the Base team, Coinbase, and other community participants. The remaining portion would be allocated to the broader community, whether through public sales, airdrops, or some form of ongoing distribution. This can establish sufficient ownership, particularly on Coinbase's side, to incentivize Coinbase to continue providing value and traffic on Base.

Laura Shin: How do you think Base will launch the Token? Will it be through airdrops, ICOs, or other methods? What will the Token's use be?

Ryan: It could be a combination of various methods. There are three aspects to consider. First, how will Tokens be allocated to developers? This may be measured by transaction volume or the amount of Gas consumed by applications on Base. They might run statistics to identify which projects joined Base early and contributed to the ecosystem and allocate some distribution to them. Second, from the user perspective, their goal may be to make TDA and Base applications the consumer front end for Base, serving as the primary consumer and user channel to develop and maintain relationships with consumers. Conducting incentive activities through that interface makes complete sense. Finally, there’s the public sale. Many people have been comparing Coinbase and Robinhood. Robinhood has a product that allows users to invest early in IPOs. I think crypto projects are starting to see similar situations, with ICO-style crowdfunding platforms like Legion and Echo making a comeback. They may leverage similar products to conduct the largest possible ICO sale of Base Tokens through Coinbase or other means, which would be their response to Robinhood-style products but in a crypto-native and Coinbase-native way. They want to make a big splash, and this will clearly be the largest or most interesting fundraising event that people will want to participate in.

Laura Shin: (to Ico Beast) Welcome, Ico Beast. What is your initial reaction to Base exploring the issuance of a Token?

Ico Beast: My initial reaction is "I knew it," and many people might feel the same. I previously posted about this on X because I am very active on Base. At that time, I said I bet we would be ready with wallets for this airdrop. Many people countered that there would never be an airdrop because they have stock and do not understand that Base and Coinbase are not the same entity. But I’m excited to hear this news and think it’s very interesting. It’s curious that they left themselves a lot of room, claiming they are only "exploring" the idea of a Token. Everyone wants to read into that, but it gives them a lot of leeway to delay or even completely abandon it if they feel necessary. The wording of this announcement is quite clever, providing flexibility for future operations.

Laura Shin: How do you think the distribution of Base Tokens should be designed? Do you agree with Ryan that Coinbase might hold 20% to 40% of the Tokens?

Ico Beast: That’s a tough question because airdrops are a hot topic. There has been a lot of recent discussion about the purpose and design of airdrops. Ideally, most should be allocated to users, but we also know that if too many Tokens are distributed to users, the price action can be terrible because everyone wants to sell. If it follows the Base philosophy we’ve observed over the past year, it may lean more towards incentivizing developers. So those who are actually building projects on Base, using Base applications, or bringing a significant number of users to the Base ecosystem, like important protocols such as Virtual and Drum, may receive a considerable allocation. As for Coinbase's holding proportion, I think it’s entirely reasonable. The significance of network Tokens lies in benefiting from sequencer revenue or other network effects. If that’s the case, it’s expected that they will retain a significant portion of Tokens to capture most of the sequencer revenue. Moreover, if they allocate themselves a substantial portion, in my view, that’s a good signal for the Token price because you wouldn’t expect Coinbase to let the price crash immediately after acquiring a large number of Tokens. Therefore, I would feel more comfortable with them holding a significant supply than allocating 40% to the community, as the latter's outcome can be more predictable.

Laura Shin: What do you think is the best way for Base to launch the Token? What will the Token's use be in the long term?

Ico Beast: I even wish they hadn’t announced it in advance and had just gone the Arbitrum route, launching the Token directly. But at the same time, the most successful airdrops, in my view, will be those that actively filter out witch attacks, whether through voluntary reporting or bounty mechanisms. Now everyone has many wallets on these networks, like Privy wallets and other temporary wallets set up for various applications. One approach is to have people link all their wallets together, operating as a single entity; another is to set up bounties for capturing witch clusters, like LayerZero does, incentivizing people to hunt down cheaters. Because Tokens need to be widely distributed, especially to enhance network effects or truly achieve decentralization. Witch attacks will ultimately undermine that purpose. Therefore, it’s essential to cleverly handle the reality of users operating multiple wallets on the network.

Laura Shin: Jesse mentioned that Base is committed to building on Ethereum. What are your thoughts on this, especially in the context of competition between Ethereum and other blockchains?

Ico Beast: I hope so. All L2s should be collaborative and ultimately create value for Ethereum. In practice, whether this will be the case in the long run remains to be seen, but I believe Base's core philosophy is currently aligned with Ethereum. This also relates to the Token issue; if it ultimately becomes a Gas token or some kind of alternative, or even a validator-style Token that requires staking, it could indeed raise some questions. For example, sequencer revenue is typically expected to be used to pay for the "rent" of operating on Ethereum, and whether these aspects align is still unclear. But it's good to hear they are confirming plans to do so. This is the risk Ethereum took when choosing the Rollup scaling path, hoping that L2s wouldn't ultimately become independent. Let's hope that’s the outcome; at least that’s the intention they are expressing at this stage.

Laura Shin: Base also announced integration with Solana, which has been completed on the testnet. What do you think this means for the competition between Ethereum and Solana?

Ico Beast: It depends on how the actual experience turns out. We are all aware of the fragmentation of liquidity and the complexities of operating across multiple chains and layers. Ultimately, someone will provide a very useful, seamless unified liquidity layer that allows users to operate on-chain without even knowing which chain they are using; everything will be abstracted for the end user. We have not reached that stage yet, and it’s hard to predict when we will, but currently, we haven’t seen many cross-chain EVM to SVM scenarios. Typically, you need to transfer funds across chains using protocols like Synapse or Relay, and there isn’t really a native integration between the two. So it’s interesting to see how the user experience will unfold. It’s hard to predict the second and third-order effects unless we experience the quality of that user experience. If the experience is seamless, then which chain the value ultimately flows to will be an interesting point to watch. It depends on which chain is outputting more native Tokens, which is the more noteworthy aspect, provided the experience is seamless.

Ryan: My view is that this is just Base acknowledging that Solana is its biggest competitor. If you talk to the biggest projects in this space, especially those on Base, they acknowledge that Solana is the only other chain they would consider building on. This is a significant step for many projects because these are two completely different tech stacks, and the costs are high, but projects are willing to consider it because it’s a positive ROI decision, which speaks to Solana's strength. On one hand, there’s liquidity DeFi, and on the other, there are consumers. Solana may currently be doing better in terms of consumer and user culture. Look at everything happening on Pump; anything closer to the average person or Gen Z, if they are using crypto applications, is likely on Solana. In contrast, while Base also has users, it is clearly more focused on DeFi and liquidity. The best part of Base is all the DeFi liquidity projects, which makes sense because Coinbase is a financial services company. Therefore, the core products that become popular on Base will naturally arise from this, whether it’s Bitcoin loans on Morpho or DEX trading on Aerodrome. What Base currently lacks compared to Solana is a strong user and consumer culture. Through this integration, they are essentially saying that projects considering deploying on Solana can now choose to deploy on Base for more liquidity or consider growth from an EVM perspective. Conversely, if there are projects on Base considering moving to Solana, they don’t necessarily have to leave Base entirely; they can view Solana as a second option. The high-level conclusion is that Base is feeling the pressure from Solana, which is their biggest competitor, and this is their way of attracting developers to access both ecosystems simultaneously.

Laura Shin: As Coinbase competes on-chain with players like Base, Robinhood, and Solana, how do you think this competition will evolve?

Ico Beast: If I knew the answer, I could perfectly position the crypto market for the next five years. I don’t know the answer, so I keep an open mind about all of this. The entire crypto market will continue to expand. My thought is that in the next three years or so, there won’t be a distinction between Solana companies or Ethereum companies, and there may not even be a concept of crypto companies. They will all be companies that selectively use crypto technology as needed. For me, this means keeping an open mind about all participants and allowing the market to develop naturally, as maintaining an open mind is the winning strategy in this case.

Ryan: Ultimately, crypto is fintech, and its core product is the Token. Therefore, as long as a chain can generate the most Tokens, and those Tokens have the most trading volume and liquidity, the combination of these two factors will determine who wins this race. Solana’s approach is meme coins. Base’s approach is the liquidity brought by Coinbase. Hyperliquid provides on-chain dedicated markets for the broader crypto market. These are the two most important directions. The next question is, what identity do you want to take in these two directions? Solana is clearly focused on increasing the number of Tokens and then hoping to generate more trading volume over time. On the Base side, it’s about bringing Tokens with significant trading volume, like Bitcoin or USDC packaged by Coinbase, while also thinking about how to create an economy that issues a large number of Tokens on-chain, which is why they are experimenting with projects like creator coins. If you are a blockchain, you are in the tokenization business, and these may be the two ways to win.

Article link: https://www.hellobtc.com/kp/du/09/6031.html

Source: https://www.youtube.com/watch?v=MLpfCYZ1jVs

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