Base Dominates Ethereum Layer 2 Profitability: TVL Skyrockets to $7.6 Billion
TLDR
Coinbase’s Ethereum Layer 2 network, Base, generated over $6 million in on-chain profits in May, outperforming competitors like Blast and Optimism.
Base’s total value locked (TVL) has seen significant growth, nearly sextupling from $1.3 billion to $7.6 billion in the last three months, driven by the implementation of EIP-4844 and proto-danksharding via the Dencun upgrade in March.
Coinbase’s upcoming Smart Wallet, which utilizes account abstraction, is expected to improve accessibility to on-chain transactions for new adopters and drive further adoption of Base.
Blast, a rising Layer 2 network from the makers of NFT marketplace Blur, has gained recognition for its unique native yield for ETH and stablecoins, increasing its share of Layer 2 profits from 5.3% in April to 15.2% in May.
Despite Base’s impressive growth, it still remains behind industry leader Arbitrum in terms of TVL, with Arbitrum currently holding $19.1 billion.
Coinbase’s Ethereum Layer 2 network, Base, has been making waves in the crypto ecosystem, generating over $6 million in on-chain profits in May alone.
This impressive performance has allowed Base to outpace competitors like Blast and Optimism, solidifying its position as a leading Layer 2 solution.
The surge in Base’s profitability can be attributed to the rapid growth of its total value locked (TVL), which has nearly sextupled from $1.3 billion to $7.6 billion in the last three months.
This growth was largely driven by the implementation of EIP-4844 and proto-danksharding via the Dencun upgrade in March, which significantly reduced gas costs and attracted more activity to the network.
Coinbase’s upcoming Smart Wallet is another factor expected to contribute to Base’s continued success.
The Smart Wallet utilizes account abstraction, a technology that simplifies on-chain transactions for new users by enabling features such as gasless transactions, preauthorized payments, and one-click transactions.
This user-friendly approach is anticipated to onboard millions of new users to the world of decentralized finance (DeFi) and further drive adoption of Base.
While Base has been leading the charge, other Layer 2 networks have also been making notable strides. Blast, a rising network from the creators of NFT marketplace Blur, has gained recognition for its unique native yield for ETH and stablecoins.
Blast’s share of Layer 2 profits increased from 5.3% in April to 15.2% in May, showcasing its growing presence in the ecosystem.
Despite Base’s impressive growth and profitability, it still trails behind industry leader Arbitrum in terms of TVL. Arbitrum currently holds $19.1 billion in TVL, demonstrating its continued dominance in the Layer 2 space.
However, with Base’s rapid expansion and the anticipated 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 significant role in driving the adoption of DeFi and making blockchain technology more accessible to the masses.
