Coinbase’s Base Nearing Milestone: Poised to Overtake Arbitrum in Total Value Locked
Within the realm of cryptocurrencies, a significant development is unfolding as Coinbase’s Layer 2 blockchain, Base, is poised to overtake Arbitrum as the dominant Ethereum Layer 2 solution in terms of total value locked (TVL). This pivotal metric in the decentralized finance (DeFi) sphere measures the total value of assets either locked or staked on a specific platform. Recent findings from IntoTheBlock reveal that Base, active for slightly over a year, is swiftly closing the gap with Arbitrum.
As per IntoTheBlock, “Coinbase’s Layer 2 blockchain, Base, which has been live for over a year, is nearing the point of surpassing Arbitrum as the primary Ethereum Layer 2 by TVL.” As of mid-October 2024, Arbitrum boasts a TVL of around $2.595 billion, with Base in close pursuit, currently standing at $2.358 billion.
Insights from Industry Observers
Experts in the market attribute Base’s rapid progress to its favorable association with Coinbase, a leading global cryptocurrency exchange. This collaboration not only boosts Base’s visibility but also paves the way for Coinbase users to delve into DeFi solutions. A blockchain analyst noted, “The integration of Base with the broader Coinbase ecosystem enables a seamless transition for users into decentralized applications (dApps), a key factor driving user adoption and transaction volume on the platform.”
Context in the Market
Since its inception, Base has garnered advantages from its compatibility with Optimism, a notable Layer 2 technology. This cooperative framework uniquely situates Base to appeal to developers looking to leverage Coinbase’s extensive user base while tapping into the advanced functionalities of Optimism’s technology. It establishes a forward-looking groundwork for DeFi projects, granting them access to non-DeFi native users venturing into decentralized platforms for the first time.
In addition, in September 2024, Coinbase introduced the cbBTC token, a wrapped Bitcoin variant tailored for use on both Ethereum and Base networks. This innovation enables users to participate with Bitcoin within the DeFi ecosystem, broadening its utility and attracting new participants. Moreover, the recently launched Paymaster service permits users to settle gas fees using custom ERC-20 tokens on Base, diversifying the token ecosystem and boosting platform engagement.
Potential Implications
The imminent advancement of Base over Arbitrum could significantly reshape the competitive scenario of Ethereum Layer 2 scaling solutions. As Base gains momentum, it might incentivize other Layer 2 solutions to improve their offerings, fostering increased innovation within the sector. The escalating TVL not only reflects user confidence but also positions Base as a strong contender in the DeFi arena, likely drawing developers to craft dApps optimized for its infrastructure.
Nevertheless, amidst this growth, the Base community has been cautioned about a growing scam where malicious entities attempt to distribute harmful software disguised as video conferencing applications. Community members are advised to exercise caution and utilize established platforms such as Zoom or Microsoft Teams to mitigate risks.
Concluding Remarks
Summing up, Coinbase’s Base stands on the brink of a significant milestone, potentially overtaking Arbitrum in total value locked. This occurrence underscores the growing attractiveness of Base as a leading layer 2 solution, bolstered by its strategic bonds with Coinbase and innovative offerings. As the DeFi landscape evolves, the upward trajectory of Base may catalyze broader shifts in the industry, underscoring the significance of user security amidst increasing scams. The implications of this achievement could reverberate in the cryptocurrency market, establishing fresh benchmarks for expansion and user involvement in decentralized financial systems.
