Base Outperforms Other Ethereum’s Layer 2 Ecosystem

While the broader Ethereum ecosystem has been riding the bearish market sentiment, Coinbase’s Layer 2 solution, Base, has been scaling new heights. Since its launch in mid-2023, Base has consistently outperformed its Layer 2 peers, setting all-time highs for weekly active wallets, transactions, and decentralized exchange (DEX) activity. So, what’s fueling this rapid ascent, and why is this coin emerging as a dominant force among Layer 2 networks?

Base Development

Coinbase’s coin: Base is a Layer 2 blockchain built on Ethereum. Designed to offer faster transactions and lower fees than Ethereum’s Layer 1, Base capitalizes on the optimism roll-up technology, allowing users to enjoy more scalable decentralized applications (dApps) without compromising security.

Coinbase’s role as a major player in the crypto industry has given Base a massive head start. With over 70 million users on its exchange, Coinbase has a vast user base eager to explore DeFi beyond simple token trades.

Breaking Records and Dominating Activity

According to data from Dune Analytics, Base recently hit an impressive milestone with 6.7 million weekly active wallets. Its weekly transactions have soared to 31.9 million, surpassing Polygon whose weekly transactions have decreased to 17.5 million from 31 million in March 2024.

Base has also taken a majority of DEX trading. With 3.5 million DEX traders, Base outpaces Ethereum, which has around 115,000 traders, and Optimism, which follows distantly with 96,000. Base’s dominance in the decentralized exchange space is a testament to its popularity among users seeking lower fees and faster execution speeds.

One of the most significant factors contributing to Base’s success is the ecosystem’s engagement campaigns, such as the Onchain Summer event. This campaign, which ran until August 30, 2024, sparked a surge in activity, drawing more than eight times the engagement compared to the previous year. During the event, users minted over 24 million on-chain assets, generating $5 million in revenue for developers and further boosting Base’s appeal.

Pulling Ahead of the Pack

Base’s meteoric rise has had ripple effects across the entire Ethereum ecosystem. Competing Layer 2 solutions such as Polygon, Arbitrum, and ZKsync have seen their active wallet counts drop dramatically. For example, Polygon’s active wallets have fallen to 2.1 million, down from 4.1 million in June. Similarly, Arbitrum’s active wallets have shrunk to 1.2 million from 4 million in April, and ZKsync has dropped to 400,000 wallets from 1.9 million.
Traders and DeFi enthusiasts are flocking to Base, attracted by its unique offering of lower fees, better performance, and Coinbase’s trusted infrastructure.

 

The Secret Behind Base’s Growth

One of the primary reasons behind Base’s rise is Coinbase’s clear dominance and influence in the crypto market. Many of its users, previously limited to simple token transactions, are now exploring the full spectrum of DeFi services using Base’s easy-to-use interface. For many users, the barrier to entry into Ethereum’s Layer 2 networks has been lowered significantly, driving more people to explore DeFi, NFTs, and other decentralized applications.

Additionally, Base’s technology makes it an appealing choice for developers, traders, and NFT collectors because it offers faster transactions and far lower costs than Ethereum’s mainnet. DeFi buyers are now moving to Base, where they can engage with smart contracts and decentralized apps at a fraction of the price because they are fed up with Ethereum’s congestion and expensive gas prices.

Long Term Outlook

Base’s growth shows no signs of slowing down, and it could continue to attract users and developers alike. As more DeFi traders, NFT creators, and decentralized app developers explore the Layer 2 landscape, Base’s unique combination of scalability, speed, and seamless Coinbase integration will likely keep it at the forefront of Ethereum’s Layer 2 solutions.

In a crowded field that includes other notable Layer 2 networks like Arbitrum, Optimism, Polygon, and ZKsync, Base stands out as a high-performing, user-friendly platform that caters to the evolving needs of crypto enthusiasts. Its rapid rise from competing Layer 2 networks signals that Base could become a long-term leader in Ethereum’s Layer 2 ecosystem.

Conclusion

While Ethereum continues to be a dominant force in decentralized finance, the rise of Layer 2 solutions like Base offers a glimpse into the future of a more scalable and efficient blockchain landscape. With its strong backing from Coinbase, superior transaction capabilities, and a growing ecosystem of users and developers, Base is well-positioned to remain a dominant player in the Layer 2 space, setting the stage for a more accessible and efficient Ethereum experience.

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