Base Launches Stage 1 Decentralization On Testnet

Base deployed fault proofs on its Sepolia testnet.

Base, the surging Layer 2 network from Coinbase, is gearing up to shed its training wheels and pursue “Stage 1” decentralization.

On July 23, Base deployed fault proofs on the network’s Sepolia testnet, marking crucial initial progress towards Stage 1 decentralization.

“We’re now taking a step towards the next stage of decentralization: fault proofs are live on Base Sepolia testnet,” Base said. “Today’s launch paves the way for bringing fault proofs securely to mainnet, and completing other milestones to reach Stage 1 Decentralization.”

Currently, only Base’s centralized proposer can submit the network’s state root to the Ethereum mainnet for validation — a system described by Vitalik Buterin, Ethereum’s chief scientist, as Stage 0 decentralization. Once deployed on mainnet, fault proofs will unlock permissionless state validation, unlocking Stage 1 decentralization by allowing anyone to participate in proposing or challenging Base’s state.

“Fault proofs are a foundational step towards more community-driven accountability and control, which reduces the need to place trust in a centralized party for state verification,” Base said. “Launching fault proofs on Sepolia testnet provides an environment to run additional testing to help bring fault proofs to mainnet securely.”

Progressive decentralization

The news comes as an increasing number of Layer 2 rollups are making progress towards increasing decentralization.

Most L2s launch with Stage 0 decentralization, with centralized state root verification serving as a security precaution prior to a network’s maturation.

Buterin describes Stage 1 decentralization as maintaining “limited training wheels,” with the chain hosting a centralized security council comprising external stakeholders such as prominent ecosystem and community members with the ability to override fault proofs in the event of a bug. State root overrides require approval from both chain operators and the security council.

Stage 2 decentralization is attained when changes to the state root can only be made in the event of a bug, and all contract upgrades are subject to a 30-day delay.

According to L2beat, only DeGate v1 and Fuel v1 have achieved Stage 2 decentralization, while Arbitrum One, OP Mainnet, ZKsync Lite, and dYdX v3 are at Stage 1, meaning the majority of Layer 2 networks utilize a centralized mechanism for state root verification.

Last month, the Arbitrum community greenlit a proposal to introduce the BoLD dispute resolution protocol, paving the way for the chain to attain Stage 2 decentralization.

Base’s growing L2 dominance

Base has firmly established itself at the top of Layer 2 rankings in 2024.

Base is the second-largest L2 by network total value locked with $7.27 billion or 16.4% of the sector, up 876% from $945 million at the start of the year.

Base also consistently ranks as the top L2 by transaction throughput, with the chain hosting more than 45 transactions per second over the past 24 hours. Binance’s recent H1 2024 report found that Base’s transaction sequencer generated $46.2 million in revenue this year so far, beating out Linea with $22.8 million and Arbitrum with $14.2 million.

The report also noted that Base’s growth has contributed towards extending the dominance of optimistic rollups over upstart zk-EVMs — which claim to offer performance gains over optimistic solutions.

The five largest L2s by TVL are all optimistic rollups, with Arbitrum, Base, OP Mainnet, Blast, and Mantle commanding 80% of the sector’s assets combined.