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 Supply-side fees Methodology

## 1. Overview

Base fees supply-side measures the portion of transaction fees that are distributed to users or stakeholders on the Base blockchain, as opposed to fees retained by the protocol. For Base (Coinbase's Layer 2 solution), this metric is set to zero because the protocol does not share fee revenue with users - all transaction fees are retained as protocol fees. The calculation establishes this baseline by referencing the total fees calculation but explicitly setting supply-side fees to zero.

## 2. Data sources

The calculation relies on the following data sources:
- **Base blockchain transaction records**: Raw transaction data from Base blockchain including gas usage metrics, gas prices, and Layer 1 settlement costs
- **End-of-day token price feeds**: WETH price data from Ethereum for USD conversion of gas fees paid in ETH
- **Transaction metadata**: Block timestamps, transaction hashes, addresses, and gas consumption data

## 3. Step-by-step calculation

### Component A: Base transaction data extraction
- **Purpose**: Extracts and standardizes raw transaction data from Base blockchain
- **Logic**: Retrieves transaction records from Base blockchain and casts gas-related fields to appropriate data types. Uses WETH contract address from Ethereum (`0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2`) as the reference token for price conversion since Base gas fees are paid in ETH. Chain is initially set to 'ethereum' for price lookup purposes
- **Key fields**: `block_timestamp`, `transaction_hash`, `gas_used`, `gas_price`, `l1_gas_used`, `l1_gas_price`, `l1_fee_scalar`, `from_address`, `to_address`

### Component B: Gas fee calculations  
- **Purpose**: Calculates both L2 execution fees and L1 data availability fees for Base transactions
- **Logic**: Computes two types of fees since Base is a Layer 2 solution. L2 gas fees are calculated by multiplying gas used by gas price and converting from wei to ETH by dividing by 1e18. L1 gas fees are calculated by multiplying L1 gas used by L1 gas price and L1 fee scalar, then converting from wei to ETH. Both fee types are aggregated daily by token address and chain
- **Key fields**: `l2_gas_fee` (gas_used × gas_price ÷ 1e18), `l1_gas_fee` (l1_gas_used × l1_gas_price × l1_fee_scalar ÷ 1e18)

### Component C: Total fees calculation
- **Purpose**: Combines L1 and L2 fees and converts to USD
- **Logic**: Sums L1 and L2 gas fees to calculate total fees per day. Converts the ETH-denominated fees to USD using end-of-day WETH price feeds. Recasts the chain identifier from 'ethereum' (used for pricing) to 'base' for proper blockchain classification. Applies business categorization including market sector and business segment identification
- **Key fields**: `fees` (l1_gas_fee + l2_gas_fee), converted to USD, with `chain_id` set to 'base'

### Component D: Supply-side fee determination
- **Purpose**: Sets supply-side fees to zero for Base blockchain
- **Logic**: References the total fees calculation but explicitly sets supply-side fees to zero since Base does not distribute any portion of transaction fees to users or external stakeholders. All fees collected are retained by the protocol
- **Key fields**: `fees_supply_side` (hardcoded to 0)

### Final aggregation
- **Combining components**: The final metric uses the total fees data structure but replaces fee amounts with zero values to reflect Base's fee distribution model
- **Currency conversion**: Fees are converted from ETH to USD using end-of-day WETH price feeds from Ethereum
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation
- **Final calculation**: Supply-side fees are set to 0 for all time periods, indicating that Base retains all transaction fee revenue as protocol fees rather than sharing with users

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

Portion of fees distributed to service providers or supply-side participants.

Base

Supply-side fees

Supply-side fees

Competitive landscape

Chain breakdown