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Base, a Layer-2 Ethereum network developed by Coinbase, has hit a notable milestone. Base’s Total Value Locked (TVL) has surpassed $2 billion, which places it one spot away from Arbitrum, which occupies the number one spot.
For perspective, TVL reflects the amount of capital users trust to deposit into a protocol. Therefore, Base’s astronomical rise indicates that more users are willingly locking their assets into it for different reasons, such as staking, lending, or liquidity.
Base Hits 370% Growth in 9 Months
Considering Base’s TVL at the beginning of the year, the achievement has stunned many in the ecosystem. According to data from DeFiLlama, at the start of 2024, Base had a TVL of $430 million. Its current TVL is a staggering $2.08 billion, representing a 370% rise year-to-date.
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Base’s rise to the second-largest rollup in the sector occurred within 11 months. Founded in August 2023 as an optimistic rollup, it helped to shift the burden from the Ethereum chain. Its utility included depositing and withdrawing tokens off mainnet Ethereum and sometimes broadcasting transaction data to the mainnet.
Key Drivers Behind Base’s TVL Surge
Experts attribute the increase in Base’s TVL to the decentralized exchange (DEX) Aerodrome. This accounts for more than half of Base’s TVL, holding more than $1 billion in overall deposits. While other protocols in the sector have recorded significant growth, Base’s figures lead.
Uniswap is another notable contributor to the Total Value Locked, along with Aerodrome. Figures show that Uniswap’s contribution hovers around $220 million.
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Although Arbitrum remains the dominant rollup in terms of TVL, Base has been able to make itself very relevant. Base has become the more active of the duo in terms of volumes. According to TheBlock data, Base’s daily transactions and active addresses rank it high among the optimistic rollup industry.
Challenges and Coinbase’s Expansion Plans
Base’s impressive growth trajectory has often resulted in network issues in the Coinbase ecosystem. This perhaps informed Coinbase’s decision to roll out plans for the launch of a web app. The app has been designed to serve as a central node for users, which will facilitate better portfolio management.
Additionally, users can navigate the crypto world including tokens, Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs).
