Base Hits $4B TVL, Becomes 3rd Largest Ethereum L2

In A Nutshell

Base, the layer-2 network developed by cryptocurrency exchange Coinbase, has recently marked a significant milestone by achieving over $4 billion in total value locked (TVL), showcasing a growth of more than 13.2% in the past week. This leap positions Base as the third largest Ethereum layer-2 by TVL, surpassing its peers, except for Optimism and the leader, Arbitrum. A remarkable aspect of Base’s growth is its transaction volume which, over the last 30 days, exceeded that of both Ethereum and Arbitrum, with an impressive count of 50.34 million transactions. Additionally, Base has witnessed a notable increase in meme token market capitalization, amidst a surge in memecoin activity. However, the platform’s rising popularity has also led to a spike in phishing scams, alerting users and the network to potential security vulnerabilities.

TVL Growth and Transaction Volume Surpass Competitors

Data from L2BEAT as of April 7 illustrates Base’s TVL standing at $4.15 billion, a composition of $1.45 billion in canonically bridged value and $2.7 billion in natively minted assets. This achievement not only highlights Base’s significant growth but also positions it ahead of its fourth-place rival, Blast, by approximately $1.4 billion. Despite its achievements, Base remains behind Optimism by $3.5 billion and the leader, Arbitrum, by $14.6 billion in TVL.

Transaction count over the last 30 days presents an even more compelling narrative for Base, with figures surpassing both Ethereum and Arbitrum. Base reported 50.34 million transactions, a clear indication of its increasing adoption and usage. This surge in activity is further underscored by Base’s average daily transactions per second (TPS), which have outpaced the combined TPS of Ethereum and Arbitrum.

Challenges and Opportunities: Meme Tokens and Security Concerns

The growth in Base’s TVL and transaction volume comes amidst a flurry of activity in meme tokens, contributing to a meme token market capitalization of over $1.6 billion on the network. This trend reflects the diverse applications and enthusiasm within the Base ecosystem. However, the network’s rising popularity has also led to an upsurge in phishing scams, with a reported 18-fold increase in successful attacks from January to March, resulting in substantial losses.

On a broader scale, developments within the Ethereum blockchain aimed at enhancing layer-2 transaction processing capabilities, such as the recent Dencun update, suggest a continuous effort to improve scalability and reduce transaction fees. These developments could present additional growth opportunities for layer-2 networks like Base.

Our take

The recent achievements of Base, from surpassing $4 billion in TVL to outdoing both Ethereum and Arbitrum in monthly transactions, underscore a significant stride in its growth and adoption. The surge in meme token activity within Base reinforces the platform’s capability to attract diverse crypto phenomena, although the escalated phishing scams highlight the imperative need for strengthened security measures. Looking ahead, the evolving landscape of Ethereum and its layer-2 solutions presents a fertile ground for networks like Base to flourish, contingent on continuous innovation and enhanced user protection. As the ecosystem matures, Base’s trajectory offers valuable insights into the potential and challenges facing layer-2 networks in the broader pursuit of scalable, efficient blockchain solutions.