The runaway success of Base, the Coinbase-owned Ethereum overlay blockchain designed for faster, cheaper transactions, has prompted the creation of a market linked to the fluctuating cost of the total gas needed to power the network, allowing speculators to to bet on recurring supply peaks on the layer 2 system.
Alkimiya, a startup backed by Coinbase Ventures as well as firms such as Dragonfly and Castle Island Ventures, takes the way traders speculate and hedge in traditional energy markets and allows users to go long or short with the cost of transactions included in blocks , or “blockspace” – a representation of a blockchain’s storage and computing capacity.
“Paying for blockspace is like paying for other energy sources, such as cars paying for gasoline or airplanes paying for jet fuel,” Alkimiya founder Leo Zhang said in an interview. “Traditional energy markets have evolved that allow airlines to hedge against their jet fuel price, for example, and we think there should be a better pricing mechanism for how people price and use this core energy resource, which is blockspace.”
Launched in August 2023, Base has outperformed its Tier 2 rivals, generating over $14 million in the last month. Increased activity on Base means that the cumulative gas paid to the network can fluctuate dramatically, from as low as 10 ETH to as high as 200 ETH in a single day.
Unlike many other blockchains, Base does not have a token and has no plans to issue one. Alkimiya’s smart contracts allow users to bet on how the price of Base blockspace may fluctuate thanks to the introduction of AI agents, for example, or on-chain events such as the arrival of a certain memecoin, NFT or airdrop.
Under the hood, Alkimiya uses a very common decentralized finance (DeFi) architecture, where an oracle tracks the gas consumed by users on Base, and a system of smart contracts facilitates the accounting and logic, Zhang explained.
“A user can buy this contract that tracks the total amount of gas paid for the Base Roll up itself,” Zhang said. “And the reason it can be done is because it’s completely transparent. There’s no centralized exchange where everything is in a black box.”
