Blockchain

Coinbase L2 Network Base Surpasses Arbitrum and Ethereum

Published

2 months ago

September 10, 2024

Coin2049 Newsletter

Coinbase’s native layer 2 network Base has surpassed 4.2 million daily transactions, according to data from Coin98Analytics. Arbitrum came closest with 1.3 million transactions followed by Ethereum with 1.1 million transactions. The L2 network reached an all time high of 4.4 million transactions on September 9, four times ahead of Ethereum, its mainnet network.

Base’s Scalability and Developer Appeal

It’s scalability and low transaction fees are key factors driving its success in L2 networks. These features makes it an attractive option for developers, leading to a surge in consumer applications.

Coinbase Layer 2 Base

The platform generates additional revenue through gas fees, creating a positive loop as more users engage with Base-based apps. Base handles more transactions compared to Ethereum hence easing congestion on Ether main net. It has been under criticism for its underperformance this year with failing transactions and ETH price drop.

Rising Activity in dApps and DeFi

The surge in its transaction volume reflects the growing activity in decentralized finance and applications. Insights from Dune Analytics show that apps like Uniswap, Thirdweb, USDC, Basename, and Zora are driving the growing activity, collectively accounting for 63.7% of users on the Base network.

The increasing number of transactions on the network indirectly affects Ethereum, leading to a higher demand for blockspace and potential gas fee increases. However, Ethereum’s scalability allows it to handle surges from Base’s activity effectively.

Base’s growing transaction volume is also evident in the performance of key coins on its network. According to CoinGecko, LayerZero holds a market cap of $382.2 million, while USDC maintains a stable $35 billion market cap. Brett has also seen significant growth, with a market cap of $737.3 million, reflecting strong investor confidence in Base’s expanding ecosystem.

Future as a Leader in Layer 2 Solutions

With over 4 million daily transactions and support from Coinbase, Base continues to dominate the Layer 2 space. Its growing user base, low fees, and innovative approach position it as a key player in Ethereum scaling.

Base’s success in the DeFi and dApp sectors signals a promising future in the Layer 2 race, outpacing its competitors and driving forward the development of Ethereum’s ecosystem.