Base, a Layer 2 protocol developed by Coinbase, has seen its total value locked (TVL) soar past the $2 billion mark. This achievement positions it as the second-largest optimistic rollup in the crypto space, demonstrating increasing trust in its capabilities as a viable alternative to existing Layer 2 solutions on Ethereum. Investors and developers alike are paying close attention to this development as Base continues to grow in prominence.
What Drives the Surge in TVL?
The TVL increase in Base is driven by several factors. According to DeFiLlama, Base’s current TVL is approximately $2.116 billion, marking a significant rise from $430 million at the year’s start. This tremendous growth, nearly 370%, is backed by the inclusion of stablecoins valued at $3.63 billion, a daily trading volume of $671.21 million, and revenue of $81.76 million accrued over 24 hours.
Why Is Base Leading in User Activity?
Base’s leadership in user engagement is highlighted by its ranking as the second-largest optimistic rollup on the Ethereum network, trailing only Arbitrum. Notably, it leads in user activity, boasting the most active addresses and daily transactions. On September 27, 1.1 million users engaged with Base, and 8,335 new wallet addresses were created, highlighting the network’s expanding user base.
Coinbase introduced Base in August 2023 with the goal of furthering its reach within the decentralized finance (DeFi) sector. As an optimistic rollup, it processes transactions off-chain and submits periodic summaries to Ethereum, easing Ethereum’s congestion and reducing user transaction expenses. This innovative approach is pivotal to its success.
Base’s TVL climbed from $1.6 billion on August 24, 2024, to over $2 billion in mere weeks. Analysts are optimistic that if this pace continues, the TVL may surpass $3 billion by year’s end. Such growth underscores the network’s potential and market acceptance.
Key factors underpinning Base’s rapid expansion include contributions from Aerodrome, which topped $1 billion in deposits, and Uniswap’s significant input, adding over $220 million to Base’s TVL within a year. These developments reflect Base’s growing influence in the crypto domain.
Base’s swift ascension and increasing user numbers bolster Coinbase’s strategic positioning within DeFi. Its ease of use and low transaction fees are essential in maintaining Base’s rising popularity among users and investors alike.