Base batches users' transactions and submits them to Ethereum, paying a share of the transaction fees to Ethereum validators (expense).

Base is an Ethereum Layer 2 (L2) offering a secure, low-cost, builder-friendly way for anyone, anywhere, to build onchain.

Coinbase team owns and governs the protocol. Coinbase is a public company and its investors include Andreessen Horowitz, Vanguard Group, ARK Investment Management, etc.

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Blockchains (L2)

Base

# Base Cost of revenue Methodology

## 1. Overview

Base's cost of revenue measures the operational expenses incurred by the Base network for posting transaction batches to Ethereum Layer 1. This metric captures the L1 settlement fees that Base pays to maintain security and data availability for its Layer 2 operations. The calculation tracks all Ethereum transactions from Base's designated batch sender address to quantify the network's primary operational cost - securing L2 transactions on Ethereum's base layer.

## 2. Data sources

The methodology relies on several key data sources:
- **Ethereum transaction records**: Complete transaction data from Ethereum mainnet, including gas usage, gas prices, and blob gas information for EIP-4844 transactions
- **End-of-day token price feeds**: WETH/USD price data for converting settlement costs to USD values
- **Token metadata**: WETH contract information and token specifications for proper identification and decimal handling

## 3. Step-by-step calculation

### Component A: L1 settlement transaction identification
- **Purpose**: Identify all Ethereum transactions that represent Base's L1 settlement costs
- **Logic**: Filter Ethereum transaction records for transactions sent from Base's batch sender address (`0x5050f69a9786f081509234f1a7f4684b5e5b76c9`) to Base's designated null address (`0xff00000000000000000000000000008453`). These transactions represent Base posting transaction batches to Ethereum L1 for security and data availability. Extract key transaction details including `gas_price`, `gas_used_amount`, `blob_gas_price`, and `blob_gas_used_amount` to capture both traditional gas costs and EIP-4844 blob gas costs.
- **Key fields**: `block_timestamp`, `transaction_hash`, `gas_price`, `gas_used_amount`, `blob_gas_price`, `blob_gas_used_amount`, and WETH token address (`0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2`)

### Component B: Settlement cost calculation
- **Purpose**: Calculate the total L1 settlement cost for each identified transaction
- **Logic**: For each settlement transaction, multiply `gas_used_amount` by `gas_price` to get traditional gas fees, then add the product of `blob_gas_used_amount` and `blob_gas_price` for blob gas fees (when present). The blob gas components are coalesced to zero when not applicable. Divide the total by 10^18 to convert from wei to ETH units, resulting in the `l1_settlement_amount` for each transaction.
- **Key fields**: `l1_settlement_amount` representing the total ETH cost per settlement transaction

### Component C: Daily aggregation
- **Purpose**: Aggregate settlement costs by day to produce daily cost of revenue values
- **Logic**: Group settlement transactions by day using timestamp truncation to daily boundaries. Sum all `l1_settlement_amount` values within each day to calculate the total daily settlement cost. Associate each day with appropriate metadata including chain identifier, market sector (blockchains_l2), and business segment (blockchain).
- **Key fields**: Daily `timestamp`, `chain_id`, `market_sector_id`, `business_segment_id`, and aggregated `cost_of_revenue`

### Final aggregation
- **Combining components**: The daily settlement costs flow directly from the aggregation step as the core metric value
- **Currency conversion**: Convert ETH settlement amounts to USD using end-of-day WETH price feeds, applying the standard conversion methodology without additional decimal corrections since amounts are already in proper ETH units
- **Time aggregation**: Daily boundaries are established using timestamp truncation to day level, ensuring consistent daily reporting periods
- **Final calculation**: The final cost of revenue represents the total USD value of L1 settlement fees paid by Base each day to post transaction batches to Ethereum, including both traditional gas costs and blob gas costs for data availability

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Expenses paid to third parties to deliver core service output.

Base

Cost of revenue

Cost of revenue

Competitive landscape

Chain breakdown