The Base Image lets you optionally define an image which is placed between the colour layer and the overlay layer. Typically, a Base Image is used to provide a frame around the image, branding elements, visually interesting text areas, etc. The image will be best fit to the template size.
"Best fit" is a combined resized and crop. If the image is smaller than both the width and height of the template it's left as is. Otherwise, it is resized to keep its aspect ratio whereas one of its dimensions fits the respective dimension of the template. The rest of the image not fitting in the template is cropped. This can lead to artifacts, therefore we strongly suggest that the image is created so that it has the same dimensions as your template.
Transparent and semitransparent areas of the image will let the layers below it (colour and underlay) to show through. You can use this to your advantage to create visually interesting effects. If you do not plan on using an underlay image or colour you should use a fully opaque image.
You can apply effect on the image as well:
Grayscale. Removes the colour from the image without affecting its contrast and brightness. It can be from 0 (no effect) to 100 (all colour removed). You can use intermediate values to mute colours towards a neutral black and white palette without removing all colour.
Sepia. Applies a sepia colour filter.
Opacity. Adjust the opacity of the image, from 0 (fully transparent) to 100 (fully opaque). Do note that semi-transparent areas of the image are kept at their current alpha (transparency) value at 100, and are made more transparent for lower values. This may result in some semi-transparent areas becoming fully transparent as you are decreasing this value.
In practice, you should avoid applying effects to the base image unless you are interested in watermarking extra images placed in the underlay layer. In this case you can use 100% grayscale and a low opacity (typically 8% or less) to create a watermark effect.