How does Base make $180,000 a day?

Author: Zack Pokorny

Compiled by: Luffy, Foresight News

Base, created by cryptocurrency exchange Coinbase, is the most profitable platform in the Ethereum Layer2 (L2) network, and its daily revenue often exceeds the sum of all other top Rollup projects. In the past 180 days, Base's average daily revenue reached $185,291, far exceeding the second-ranked Arbitrum's $55,025.

It is clear that Base has become a platform with sustained high revenue, but what is driving its economic activity? What advantages does Base have that other leading L2s do not have to create such high value?

This report will explore Base's fee structure and focus on the activities that drive its revenue growth. We found that Base's sorting mechanism and decentralized exchange (DEX) activities are key drivers.

Base's transaction sorting mechanism

The sorting of transactions on Base is determined by two variables:

1. The time (latency) at which the transaction is submitted;
2. The fee (economic incentive) paid by the sender relative to the complexity of the transaction.

This mechanism is similar to the operating model of logistics companies such as UPS: packages are sent in the order in which users deliver them, while allowing senders to pay an additional fee to choose "expedited" delivery for faster delivery services. The priority fee mechanism forms a dynamic auction market, which is consistent with the Ethereum EIP-1559 fee model and achieves a balance between delivery time and economic incentives.

Specifically, transactions on Base include a "base fee" (lowercase "b", not to be confused with the name of the chain) and a priority fee: all users are required to pay the base fee when sending transactions, while the priority fee is optional and is only used to speed up transaction execution.

But how does the sorter decide which "expedited" transaction to prioritize? Instead of considering the total cost directly, it focuses on the price per unit of Gas (required computing resources), that is, the cost-effectiveness of the resources required for the transaction and the benefits it brings.

Let's use the example of a logistics company again: Assume that the delivery truck has limited space (similar to the Gas limit of the block), and the driver (sequencer) hopes to maximize the tip income within the limited space. At this time, there are two packages:

• A large package, with a basic shipping fee of $50, but a priority tip of only $10, takes up half of the truck space;
• A small package, with a basic shipping fee of only $20, and a priority tip of the same $10, takes up very little space.

Although the total cost of the large package is $30 higher than that of the small package, the driver will still give priority to loading the small package because it is more cost-effective in terms of space.

Base's sequencer follows the same logic, giving priority to transactions with the highest priority fee per unit of Gas, thereby ensuring that the block with the "highest cost" of computing resources is also the block with the highest revenue. Therefore, when two users submit transactions at the same time, the user who pays a higher priority fee per unit of Gas is more likely to have his or her transaction included in the block first, regardless of the complexity of the transaction or the total fee.

The following figure shows this process:

Why is this important? How does Base differ from competing chains?

Base's EIP-1559-style fee model creates a continuous open market auction environment for block space, where users can directly bid for block space based on the urgency and profitability of their transactions. Therefore, while there is still an element of latency competition, the economics allow sorter revenues to grow directly with block space demand and the profitability of on-chain transactions.

This is in stark contrast to Arbitrum’s primary sorting mechanism. Arbitrum uses a strict “first come, first served” (FCFS) model, where users compete primarily on latency rather than economic cost. In this model, the main competition is not who can pay more fees, because all users have the same per-gas fee and no priority fees are used, but who can get transactions to the sorter the fastest. This leads to a “latency race”, where professional players ensure that their transactions are processed first by investing in low-latency infrastructure. In this environment, Arbitrum’s fees only grow with the scale of demand, and do not effectively reflect the profitability or urgency of individual transactions.

In April 2025, Arbitrum launched the Timeboost feature, which aims to create a more flexible FCFS system that allows sorters to earn benefits similar to priority fees. In effect, Timeboost adds a “fast lane” for trade execution to Arbitrum, which users can bid on for a limited time. Users who enter the fast lane receive near-instant execution, while other users are still processed in FCFS order, with only an additional 200 milliseconds of latency to compensate for the priority of the fast lane. Although Timeboost introduces a form of priority bidding, its mechanism is more predictive than reactive compared to Base’s priority fee model. Bidders must predict the potential total revenue for a certain time period in the future and bid based on the estimate. This means that Arbitrum receives a fixed fee from the winning bidder regardless of the actual revenue in that time period. This proactive fixed-rate model is not as effective in capturing the value of sudden high-yield trades as a reactive system where users bid on each trade individually.

How much revenue does Base generate?

Base’s average daily revenue over the past 180 days is $185,291. In comparison, Arbitrum's average daily revenue is $55,025, and the other 14 Ethereum L2 networks have a combined average daily revenue of $46,742.

So far this year, Base has made a total of $33.4 million, Arbitrum has made $9.9 million, and the other 14 L2 networks have made $8.4 million.

Relatively speaking, Base has accounted for 64% of the total revenue of the top 15 Ethereum L2 networks ranked by total bond value over the past 180 days. Its share has grown significantly over the past year, up 48 percentage points from a daily average of 37% in July 2024, based on the 7-day moving average of daily revenue share. As of July 20, Base's share of Ethereum Rollup revenue has fallen to 49.7% due to increased activity on other chains.

The important role of priority fees

Transaction fees on Base consist of two main parts and an optional priority fee:

• Layer1 (L1) fees: used to pay for the cost of submitting a batch of L2 transactions to the Ethereum mainnet. After the Ethereum Pectra upgrade introduced "blobs" through EIP-4844 in March 2024, the L1 fee portion of Base (and general L2 transactions) dropped significantly. This is because it is more economically efficient to submit batches of data via blobs rather than as call data in L1 transactions.
• Base fee: A mandatory fee for executing transactions on Base. Set by the protocol, it fluctuates based on how much space has been used in the previous block - the busier the network, the higher the base fee; the busier the network, the lower the base fee.
• Priority fee: An optional fee, also known as a "tip", used to prioritize transactions. Priority fees help transactions get a higher position in a block, or ensure that a transaction is included in the current block rather than delayed to the next block. A block can contain thousands of transactions, which are executed in order according to their slots. Typically, the first slot in a block is the most valuable because transactions in that slot are executed first and are not interfered with by subsequent transactions.

Priority fees are the main source of Base revenue, and users bid to get accelerated execution. In the past 180 days, Base's average daily priority fee income reached $156,138, accounting for 86.1% of its average daily income.

Specifically, the priority fee for the top slot of the Base block is an important contributor to the sorter's income, and users compete for a position near the top of the block. Since 2025, the priority fees paid by transactions in the first slot of the block alone have contributed 30% to 45% of daily income. Additionally, priority fees paid by transactions in the top 10 slots of each block contributed 50% to 80% of daily revenue during the same period. However, the share of top slot priority fees in total daily revenue dropped significantly in the weeks after July 5. This is attributed to two factors: 1) increased traffic pushed up base fees, which in turn diluted the share of revenue from priority fees; and 2) the implementation of "Flashblocks" on July 16 (more on this below), which caused high-priority transactions to fall into lower slots in the block (but as we will see, this is not a bad thing).

Priority fees mainly come from a small number of addresses. In the past year, 64.9% of priority fees came from only 250 addresses. The top-ranked address paid 3.6% of all priority fees in the same period, which is equivalent to $1.99 million based on the ETH price when the fees were paid.

What is Flashblocks?

Flashblocks, developed by Flashbots, aims to increase the speed of transaction processing on Base. To achieve this goal, it introduces "subblocks", which are high-confidence pre-confirmations of sub-parts of a block created every about 200 milliseconds. For example, a block can contain three different sub-parts, and users can get pre-confirmation of transactions in these sub-parts before the block is confirmed on the chain at a set 2-second interval. This allows end users to experience transactions as almost instantaneous, even though Base's block interval remains the same, resulting in a smoother, more responsive experience.

Why is this important for Base network fee analysis by slot? Because each "subblock" is actually considered a new block from a transaction ordering perspective. Therefore, a high priority fee transaction may fall into a lower slot of the overall "confirmed block" but be at the top of the "pre-confirmed subblock".

The figure below shows the difference in priority fee distribution for the first 200 block slots before and after Flashblocks was implemented. The black bars represent the priority fee share of each slot; the blue line represents the cumulative share of all slots up to that slot (Pareto distribution).

In the week before Flashblocks was implemented, the Pareto curve rose sharply in the first 10 slots and then increased linearly toward the 200th slot. In contrast, in the week after Flashblocks was implemented, the Pareto curve was relatively flat at the lowest slot and began to rise steeply around the 50th slot of each block - indicating that high-priority fee transactions are falling into later slots in confirmed blocks.

The Impact of DEX Trading

Base has very active DEX activity. Base has the largest daily DEX trading volume of all Ethereum L2 networks, accounting for 50% to 65% of L2 network DEX trading volume, and its DEX total value locked (TVL) is the highest among all L2 networks (excluding perpetual futures DEX).

The high DEX activity is an important reason for the high priority fees on Base. Of the total daily fees earned by the Base sorter, 50% to 70% comes from priority fees on DEX transactions. However, since July 7, the proportion of DEX transaction fees in total daily fees has dropped from 67% to only 34%. This is attributed to two aspects: 1) the increase in base fees dilutes the proportion of priority fees; 2) the increased competition for block space on the chain forces users to pay priority fees for non-DEX transactions.

Since 2025, the priority fees paid by DEX transactions in the first slot alone have contributed 30% to 35% of the total daily priority fees, while the priority fees of DEX transactions in the top three slots have contributed 50% to 62% of the total daily priority fees. The recent decline in the proportion of DEX priority fees in the top slots is due to the increase in priority fees for non-DEX transactions due to the overall intensification of competition on the chain, and the implementation of Flashblocks, which has caused high-priority DEX transactions to fall into lower slots in the block.

Conclusion

Through our analysis of Base’s DeFi and revenue structure, we found that:

• Priority fees make up the vast majority of revenue;
• Over 60% of priority fees in the past year came from just 250 addresses;
• High DEX trading volume and TVL;
• Priority fees from DEX trading contribute nearly three-quarters of total priority fees.

These points suggest that Maximum Extractable Value (MEV) trading, especially competitive activities such as DEX arbitrage, is an important source of revenue for Base’s ranker. The EIP-1559-style fee model adopted by the ranker is a direct mechanism to achieve this: it transforms block space competition from an inefficient latency-based race to an efficient economic auction.

By charging priority fees to users willing to pay for urgent inclusion, this model enables sequencers to capture and monetize the competitive value of block space more efficiently than traditional "first-come, first-served" or purely latency-driven systems.