Base How to Become the Highest Revenue Generating Platform in the Ethereum Layer2 Network

Base, as a leader in the Ethereum Layer 2 (L2) network, has an average daily revenue of $185,291, far exceeding the $55,025 of the second-ranked Arbitrum. This article will explore Base's fee structure and the key factors driving its revenue growth.

The Trading Sorting Mechanism of Base

Base operates using a model similar to logistics companies, determining transaction order based on the ratio of transaction submission time and cost to complexity. This mechanism creates a dynamic auction market that balances delivery time with economic incentives.

Transactions on Base include a base fee and an optional priority fee. The sequencer focuses on the bid for each unit of Gas rather than the total fee to ensure the most efficient use of computational resources.

Differences Between Base and Competitors

Base's EIP-1559 style fee model creates a continuous public market auction environment for block space. In contrast, Arbitrum primarily adopts a "first come, first served" model, although the Timeboost feature was later introduced, it is still less effective than Base's reactive system in capturing the value of sudden high-yield transactions.

Base's income situation

In the past 180 days, Base accounted for 64% of the total revenue of the 15 top Ethereum L2 networks. Its share has significantly increased over the past year, rising from 37% in July 2024 to a recent 49.7%.

The Importance of Priority Fees

Priority fees are a major source of Base earnings, accounting for 86.1% of its average daily earnings. The priority fees at the top of the block slot are particularly important, with the first slot alone contributing 30% to 45% of the daily earnings.

It is worth noting that priority fees mainly come from a small number of addresses, with 64.9% of the priority fees in the past year originating from just 250 addresses.

The Impact of Flashblocks

The implementation of Flashblocks has increased the transaction processing speed of Base, but it has also changed the distribution of priority fees within the block slots. High-priority fee transactions may fall into the lower slots of the overall "confirmed block," but are at the top of the "pre-confirmed sub-blocks."

The Importance of DEX Trading

Base has the largest DEX trading volume and the highest total value locked among all Ethereum L2 networks. DEX activity is an important reason why Base's priority fees remain high, contributing 50% to 70% of daily total fees.

Conclusion

The success of Base is mainly attributed to its EIP-1559 style fee model, which transforms block space competition into an efficient economic auction. This allows Base to capture and commercialize the competitive value of block space more effectively than traditional systems, especially in competitive activities such as maximum extractable value (MEV) transactions and DEX arbitrage.