Base Takes Over Ethereum Layer 2: TVL Skyrockets To $7.6 Billion

TLDR

Coinbase's Ethereum Layer 2 network, Base, generated more than $6 million in on-chain profits in May, outperforming competitors such as Blast and Optimism. Base Total Value Locked (TVL) has seen significant growth, rising from $1.3 billion to $7.6 billion over the past three months, driven by the implementation of EIP-4844 and the proto-danksherding of Denkun's upgrade in March. Coinbase's upcoming Smart Wallet, which uses account aggregation, is expected to improve access to on-chain transactions for new adopters and encourage further Base adoption. Blast, the rising Layer 2 network from NFT marketplace blurring creators for ETH and stablecoins has been recognized as a unique native product, increasing Layer 2's profit share from 5.3% in April to 15.2% in May. Despite Baez's impressive growth, it still lags behind industry leader Arbitrum in terms of TVL, which currently accounts for $19.1 billion.

Coinbase's Ethereum Layer 2 network Base is making waves in the crypto ecosystem, generating over $6 million in on-chain profits in May alone.

This outstanding performance allowed Base to outperform competitors such as Blast and Optimism, solidifying its position as the leading Layer 2 solution.

The increase in base profitability can be attributed to the rapid growth in Total Value Locked (TVL), which increased from $1.3 billion to $7.6 billion in the last three months.

This growth was largely driven by the March implementation of EIP-4844 and proto-danksharding via the Denkun update, which significantly reduced gas costs and attracted more traffic to the network.

Coinbase's upcoming smart wallet is another factor expected to contribute to Base's continued success.

Smart Wallet uses account abstraction, a technology that simplifies on-chain transactions for new users by enabling features such as gasless transactions, pre-authorized payments and one-click transactions.

This user-friendly approach is expected to bring millions of new users to the world of decentralized finance (DeFi) and further base adoption.

While BASE is leading the charge, other Layer 2 networks are also making significant strides. Blast, a growing network of NFT marketplace blurb creators, has been recognized as a unique native product for ETH and stablecoins.

Blast's Layer 2 profit share increased to 15.2 percent in May from 5.3 percent in April, indicating growth in the ecosystem.

Despite Base's impressive growth and profitability, it still lags behind industry-leading arbitrage in terms of TVL. Arbitrum currently has $19.1 billion in TVL, demonstrating its continued dominance in the Layer 2 space.

However, with Base's rapid expansion and the expected launch of Coinbase's Smart Wallet, the gap between the two networks may narrow in the coming months.

As the Ethereum ecosystem continues to evolve and Layer 2 solutions gain traction, networks like Base and Blast are poised to play a major role in driving DeFi adoption and making blockchain technology accessible to the masses.