GM builders and curious readers!
Base, Coinbase’s Ethereum L2, has quietly built a profitable economic engine on top of a rollup.
In this deep dive, we break down why Base is making so much money, how the mechanics actually work, and what other L2s can learn from it.
We’ll cover:
- Where Base’s revenue comes from
- How “priority fees” create an on-chain auction
- Why DEX trading is the backbone of Base’s economy
- How Flashblocks change the blockspace game
- Key lessons for developers and users
This is not just another hype post – by the end, you’ll understand the mechanics well enough to explain them to a friend.
1. The Big Picture: Why talk about Base?
Over the last 180 days, Base has averaged $185,000/day in revenue – three times Arbitrum and more than the next 14 rollups combined.
This is remarkable because:
- Base launched only in 2023.
- It’s already financially self-sufficient.
- Its fee model is different from other L2s.
The key? Priority fees.
2. Priority Fees: How Base Sells Blockspace
When you submit a transaction on most L2s, they process them roughly in arrival order (plus gas price).
Base changes this. It runs an internal auction every block.
How it works:
- Every transaction has:
- A base fee: the normal cost of execution
- An optional priority fee: an extra tip to speed up inclusion
- The sequencer ranks transactions using:
- How fast it was submitted (latency)
- How high the priority fee per gas unit is
The result? Users literally bid for blockspace.
If you need your swap included in the next block, you pay a higher priority fee.
If you don’t care, you just pay the base fee and wait.
Why this matters
- For users: You can buy speed when it matters.
- For Base: This becomes a predictable revenue stream.
In fact, 86% of Base’s revenue comes from these priority tips.
3. Why DEX Activity is the Revenue Engine
So why is there so much demand to “pay extra for speed”?
Because Base has become the busiest place for DEX (Decentralized Exchange) trading on L2.
- 50–65% of all L2 DEX volume happens on Base.
- These trades generate 50–70% of all priority fees.
Why do DEX users pay more?
- Slippage risk: If your trade is delayed, the price might move.
- Arbitrage: Bots race to capture tiny spreads. Milliseconds matter.
So DEXes create urgency, and urgency fuels the fee auction.
Even in July 2025, when DEX share of activity dropped to 34%, they remained the top source of priority fee revenue.
4. Flashblocks: A July 2025 Innovation
In July, Base introduced Flashblocks.
What’s a Flashblock?
- Imagine you pay for a priority lane.
- You get a pre-confirmation immediately.
- Your transaction is then included in a later block slot (instead of instantly).
This helps:
- Smooth out network congestion
- Spread fee revenue over more slots
Effect on revenue
Before Flashblocks:
- Top slots captured 30–45% of fees.
After Flashblocks:
- Top 10 slots now capture 50–80%, but the curve is flatter.
- Competition isn’t just for slot #1 anymore.
5. Lessons for Builders and Users
For L2 teams:
- Priority fee auctions can turn a chain from “cheap gas” into a profitable network.
- DEX partnerships are critical: DEXes are the heartbeat of on-chain activity.
For developers:
- If you’re building on Base, be aware that priority fees matter for UX.
- For latency-sensitive apps (arbitrage, bots, NFT mints), budget for tips.
For users:
- Paying a priority fee is like using a fast lane on a highway. Use it when timing matters.
Key Numbers to Remember
- $185,000/day in revenue (180-day average)
- 86% of that from priority fees
- 50–65% of L2 DEX volume lives on Base
Why It Matters
Base is showing that:
- Rollups don’t have to lose money.
- Fee models and user behavior can make an L2 financially self-sustaining.
- Blockspace is becoming a market, not a commodity.
Other rollups are already watching.
ChainHire Takeaway
We love this because it changes the career opportunities on L2s:
- More infrastructure projects
- More demand for latency-focused bots, analytics, and tooling
- More developer jobs building apps that take advantage of these mechanics
If you’re building your career in Web3, follow where the fees flow.
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