Coinbase’s Layer 2 System Base Gets a Marketplace Linked to Gas Revenue

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What to know:

  • Alkimiya’s smart contracts allow users to go long or short on the cost of transactions being included in blocks on layer 2 network Base.
  • The contracts track the cumulative gas paid to the Base network, which can fluctuate dramatically, from as low as 10 ETH to as high as 200 ETH in a single day.

As an analyst, I’ve observed the unprecedented surge in popularity of Base, the Layer 2 Ethereum blockchain operated by Coinbase, which offers faster and more cost-effective transactions. This boom has sparked the emergence of a market that correlates with the varying gas costs required to sustain the network. This market enables speculators to wager on anticipated surges in utility usage within the Layer 2 system, capitalizing on recurring spikes in demand.

Alkimiya, a venture supported by Coinbase Ventures and others like Dragonfly and Castle Island Ventures, allows users to make bets about the future price of transaction space within blocks, known as “blockspace” – essentially predicting the demand for storage and computational power on a blockchain. This is similar to how traders speculate and hedge in traditional energy markets.

In a recent interview, Alkimiya founder Leo Zhang compared buying blockspace to purchasing other types of energy, such as gasoline for cars or jet fuel for planes. Just as the traditional market allows airlines to protect themselves from fluctuating jet fuel prices, he suggested that there should be a more efficient method for determining how people price and utilize this essential energy resource, which is blockspace.

Introduced in August 2023, the platform known as Base has surpassed its layer 2 competitors, accumulating more than 14 million dollars within the past month. The heightened usage of Base can lead to significant variations in the total gas fee paid to the network, ranging from a minimal 10 Ether to as much as 200 Ether on a single day.

Instead of most other blockchains, Base does not use a token and does not intend to create one. Alkimiya’s smart contracts enable users to wager on potential changes in the cost of Base blockspace through AI agents or on-chain events such as the appearance of a specific memecoin, NFT, or airdrop.

At its core, Alkimiya operates using a well-known structure for Decentralized Finance (DeFi), Zhang elaborated. An oracle monitors the gas expenditure of users on Base, while a network of smart contracts handles the bookkeeping and logic within this system.

Zhang stated that a user has the option to buy a contract which monitors the total gas expense directed towards the Base roll-up system itself,” said Zhang. “This is achievable due to its complete transparency, as there’s no centralized platform where all transactions are hidden or concealed.

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2025-01-14 16:06