Written by: Thejaswini MA
Compiled by: Chopper, Foresight News
A few days ago, I read about a concept in Japanese philosophy: basho (場). Roughly translated as "place," but philosopher Kitaro Nishida imbued it with meaning far beyond a geographical location; it's more like a circumstance: a field within which all things can become themselves. In other words, people don't appear in a place by chance, but are shaped by the place they inhabit. Today, I'll use this theory to interpret Base.
Last month, its active address count fell to an 18-month low. Reflecting on this phenomenon, I realized that Base only built a location, but never created the conditions for things to grow and take shape.
When Coinbase launched Base in 2023, a rare kind of faith emerged within the crypto-native community. People believed it could finally solve Ethereum's oldest problem: infrastructure everywhere, but no real users. Coinbase, with its 100 million users and unparalleled distribution capabilities, possessed a unique advantage. The door opened, and users were already waiting outside.
For a time, this confidence seemed to be validated. Base's growth rate surpassed all previous Layer 2 platforms. In October 2025, its total value locked (TVL) reached $5.6 billion, and its fee revenue was unmatched in the entire L2 space. Therefore, in September 2025, Base confirmed the issuance of its token, seemingly foreshadowing an experiment destined for success. Yes, a place was becoming a field (basho).
Then, the user left.
Looking at the data makes it even clearer: Base's active addresses have returned to levels seen in July 2024. The anticipated token issuance perfectly met the needs of those who would participate in the airdrop: get their final reward and then leave.
Base's bet on the creator economy in 2025 also failed. Its core is the Zora protocol, which by default tokenizes content. By the end of the year, 6.52 million creator and content tokens had been issued on Base via Zora, of which only 17,800 remained consistently active throughout the year, representing 0.3%. The remaining 99.7% were largely ignored.
Base's daily active addresses peaked at 1.72 million in June 2025. By March 2026, this number had plummeted to only 458,000, a 73% drop from its peak. After Armstrong announced in September 2025 that Base was considering issuing its own token, the number of active addresses decreased by 54% in just six months, indicating that speculative funds had completely left the market.
Sociologist Ray Oldenburg studied what makes people repeatedly return to a place regardless of reward. He called these "third spaces," such as bars, barbershops, and city squares. These aren't highly productive spaces, but they provide a reason to return, unrelated to incentives. The core idea is that the desire to return cannot be artificially created; it can only grow naturally from the long-term possibilities offered by the place. The cryptocurrency industry designs these spaces to exploit users, then wonders why no one stays.
This is the place of no field (basho): people pass by, take what they need, and leave, because leaving costs nothing. No identities are formed here, no capabilities are established that can't be replicated elsewhere in three weeks, nothing makes leaving a loss. Are there unique relationships on this chain? We've never built things this way, have we?
You can't build a basho with financial incentives. Incentives can certainly pull people in, but they can't make them want to stay. The desire to stay must come from the long-term potential nurtured by the basho. Kitaro Nishida calls this "site logic," referring to how a relational field shapes what emerges within it. The crypto industry designed a basho for exploitation, only to be surprised to find that all it produced was exploitation.
Brian Armstrong has publicly stated that Base App is now focused on becoming Coinbase's self-custodial, trading version.
The vision of building social engagement and enabling users to establish trustworthy identities on the blockchain for social interaction and creation has vanished. From a data perspective, this was a rational decision, but it also acknowledges that this vision never truly materialized. Base now focuses solely on serving its existing users, because that's all it can offer.
One chain, one track
Base is the most prominent microcosm of the entire L2 mode.
Since June 2025, the overall usage rate of small and medium-sized L2 chains has declined by 61%. Most chains outside the top three have become zombie chains: active enough not to shut down, but so deserted as to be insignificant. The daily active user ratio of L2 relative to L1 has dropped from 15 times in mid-2024 to 10-11 times today. Most new L2 chains experienced a complete collapse in usage after their incentive cycles ended. The entire L2 ecosystem is cooling down, and it's not just Base2.
The Rollup-centric roadmap was once a theory about user adoption: reduced participation costs → user influx → ecosystem formation → compound growth. This year, the Ethereum Foundation released a 38-page vision document outlining Ethereum's future direction. Meanwhile, the largest L2 blockchain has seen its activity bottom out and users have left the OP stack, while the second largest L2 blockchain has stagnated.
Lowering entry costs does not equate to creating the conditions for things to take shape. The industry has solved the "entry" problem, but it assumes that "belonging" will follow. It won't appear automatically, because belonging is not a feature that can be launched automatically.
Farcaster is the closest thing to a true basho in the crypto world. A specific group of people built a unique culture on it: developers shared their work, discussed Ethereum, and developed opinions about each other over months. This takes time, and competitors can't replicate it with higher rewards. Friend.tech tried the same thing with incentives, reaching the top in a week and disappearing in a month. The same mechanism failed to create a culture. The difference isn't in the product itself, but in whether people stay long enough for something to truly take shape.
What can be done to retain employees?
The key to retaining users during a downturn is not more generous incentives.
Arbitrum's daily active addresses peaked at 740,000 in June 2024, but have now dropped to 157,000, a 79% decline. Both chains are declining, but their underlying logic is completely different.
Base's users log in to trade, and they leave when trading volume drops. Arbitrum, on the other hand, is unaffected by fee levels; the correlation between user numbers and fee revenue is almost zero. Base attracts visitors, while Arbitrum somehow retains its users.
Hyperliquid's success stems from its unique trading experience and the strong sense of community it fosters. Token incentives are almost irrelevant; being part of the community has become an integral part of their behavior and identity. Things shape users, and users, in turn, shape things.
The crypto industry is still optimizing "how to get people to come," while the question of "how to create an environment" is only ever thought of after a data collapse, and is never considered in the initial design of the chain.
I believe that Base has the strongest distribution capabilities in history and could have solved this problem better than any other chain.
Today it's a trading application. This is a logical product direction, but it's something over 40 products have already been doing. Trading applications can't create bashos; they can only create sessions: users come in when they have a trading need and leave after completing it.
To truly become a successful application, it needs to establish a continuous connection. Users need to build a relationship between each visit, making the next visit feel like a return, rather than just an arrival.
Armstrong's transformation is largely based on the lessons Base learned from data. Social layers, the creator economy, and on-chain identity—things that should have transformed Base from being "used" to being "lived in"—all require patience, and the system does not reward patience.
The Ethereum ecosystem needs a base that is more than just a trading platform. The foundation of the entire L2 narrative lies in the fact that the chain can become the infrastructure around which people build their lives. If the most powerful L2 blockchain in crypto history ultimately resigns itself to becoming a faster Coinbase, then this narrative itself becomes untenable.
Kitaro Nishida believes that the deepest basho is where the boundary between self and place begins to dissolve. You cannot completely separate "who you are" from "where you are shaped." This sounds abstract, but on a public blockchain, it means: a user cannot imagine their financial life outside of a certain blockchain; all of a developer's toolkits are based on a certain ecosystem; their identities are almost impossible to exist elsewhere.
To the best of my knowledge, something like this has never been built on any L2. It may simply be impossible to build under an incentive plan.
Even if you have 100 million potential users, if there's nothing worth keeping, you'll eventually just leave empty-handed. Base understands now.
