Altcoin breakout on Base could outperform Bitcoin long term – Nansen

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Base’s rapid growth positions the Coinbase-backed Ethereum Layer-2 solution to become a key infrastructure provider for mainstream consumer blockchain applications, per a new report by Nansen.

Nansen highlighted significant developments slated for the second quarter, notably Flashblocks, Base Appchains, and smart wallet enhancements, which reflect infrastructure upgrades needed for consumer app adoption.

Flashblocks, set for mainnet launch in Q2, will reduce pre-confirmation block times from 2 seconds to just 200 milliseconds, potentially making Base the fastest Ethereum Virtual Machine (EVM)-compatible blockchain.

Further driving consumer use, Base Appchains enable high-throughput apps to deploy dedicated Layer-3 networks on Base. Current deployments include Blackbird’s restaurant loyalty program and Farcade AI’s gaming ecosystem.

Meanwhile, Nansen anticipates smart wallet improvements that offer advanced user interfaces and programmable spending limits, which are critical for everyday consumer transactions and subscriptions.

Base’s on-chain metrics showcase this accelerating adoption. Nansen notes that robust daily active users and developer activity consistently outperform competing Layer-2s alongside sustained transaction activity despite recent crypto market downturns.

As Nansen wrote, Base currently ranks second only to Arbitrum in total value locked (TVL), though excluding Arbitrum’s Hyperliquid platform would elevate Base to first.

Regulatory developments also provide tailwinds for Base. The SEC’s recent decision to drop its lawsuit against Coinbase and a more transparent regulatory framework for digital assets under a crypto-supportive administration reduce the uncertainty that previously hampered institutional and retail participation.

Nansen-native assets

Given the absence of an official base token, base-native tokens such as AERO, VIRTUAL, CLANKER, and WELL, according to Nansen, present a viable route for market participants seeking indirect exposure to the ecosystem.

Nansen identified that these tokens had displayed varied performance year-to-date: CLANKER declined just 18%, outperforming peers like VIRTUAL, which fell 84%. Each token aligns with specific market narratives—AERO leads Base in DeFi volume and memecoin trading; VIRTUAL intersects AI and gaming; CLANKER incentivizes social content creation; and WELL facilitates DeFi payment solutions.

Nansen believes that Coinbase’s direct involvement and token listings add further credibility to these assets. For instance, AERO has already secured listings on Kraken and Coinbase, with Coinbase Ventures holding a significant stake.

While altcoins linked to Base exhibit significant discounts, Nansen recommends awaiting more precise signals of broader crypto market recovery before substantial positioning.

“Right now, we see two major tailwinds:

– Deep discounts across Base-related tokens, presenting attractive entry points.
– Strong catalysts in Q2, including Flashblocks, appchains, and smart wallet upgrades, driving further adoption.”

Overall, Nansen thinks that Base’s infrastructural improvements, regulatory clarity, and robust ecosystem position it firmly to lead the next wave of consumer blockchain applications.