Coinbase’s Base Set To Overtake Arbitrum To Become The Biggest Ethereum L2 Network

Base, the Ethereum layer-2 scaling solution from crypto exchange Coinbase, has witnessed a surge in activity in the past two months and is now gunning for the top spot in the Ethereum ecosystem.

In an interesting development revealed by data from IntoTheBlock, the transaction volume on Base has increased massively within this timeframe, with it capturing about 40% to 60% of all volume to outpace Optimism and Arbitrum. Now, recent data in the past 24 hours show Base now seems to have made the leap to solidify its leading position in terms of total value locked (TVL).

Base operates as a layer 2 network on Ethereum launched by Coinbase to offer a safe, low-cost, developer-friendly way to build on-chain. Since its inception, Base has quickly established itself within the crypto market, carving out a strong market fit.

Although it has been live for just about a year, Base’s appeal has become increasingly evident, particularly over the past two months. Data from IntoTheBlock reveals that Base’s total value locked (TVL) has experienced consistent growth since September 7, when the TVL on the network was recorded at $1.41 billion. Since then, Base’s TVL has surged by an impressive 68%.

According to IntoTheBlock, this dramatic rise in TVL has positioned Base as a formidable competitor to Arbitrum, previously the largest Ethereum layer-2 network in terms of TVL. In a notable shift, while Arbitrum’s TVL decreased by 0.33% in the past 24 hours, Base saw a 1.3% increase during the same period.

As a result, Base’s TVL reached a new all-time high of $2.37 billion within the past 24 hours, narrowly surpassing Arbitrum’s TVL of $2.35 billion.

In addition to TVL growth, Base’s ascent has been accompanied by an expansion of its stablecoin market cap. As of the time of writing, Base’s stablecoin market cap has risen to $3.758 billion, with USD Coin (USDC) accounting for a dominant 92.82%. However, Base still trails behind Arbitrum in stablecoins, which holds a stablecoin market cap of $4.428 billion.

Base’s TVL growth has been backed by a steady growth in active addresses and adoption rate. Looking at the IntoTheBlock (ITB) chart below, we can see the difference in Base’s activity compared to Arbitrum and Optimism. Notably, data from ITB puts the number of daily active addresses at an average of 2,188,900 in the past seven days.

This figure comes in light of a massive transaction surge since July 2024. For context, it’s worth noting that the Base network recorded daily transactions below 1 million from January through August 2024, highlighting the dramatic turnaround in user engagement.

In comparison, Arbitrum has an average active address of 512,900, while Optimism has an average of 405,600 within the past seven days. 

At this rate, the Base TVL is set to keep growing as activity increases. This sustained growth could see Base outpacing Arbitrum also in terms of stablecoin market cap.

Featured image from Coinbase, chart from TradingView