During a recent discussion, Solana co-founder Anatoly Yakovenko raised questions about the vitality of the Ethereum ecosystem without contributions from Base, a layer 2 solution. This query came about while looking at the growth metrics shown by Base, specifically user activity and transaction volume.
Rapid growth of basic layer 2 solutions
Base has seen exceptional increases in key activity metrics such as active addresses, number of transactions, and throughput, all of which have recently reached new peaks. This growth trajectory is also reflected in the stablecoin’s market capitalization and total value locked (TVL), which are reported at all-time highs.
base layer 2 Integration with Coinbase's existing large user base is seen as a key factor driving Coinbase's demand and subsequent rise in these metrics.
Additionally, Base's surge in activity can be partially attributed to the popularity of meme coins within its ecosystem, particularly MOG and BRETT. These coins rank among the top 100 cryptocurrencies by market capitalization and are nearing their peak.
According to DefiLlama ReportAerodrome Finance has played a key role in the meteoric rise in base Total Value Locked (TVL), with memecoin trading being the primary driver. The platform contributes $1.36 billion in TVL at base layer 2, making it a major force behind rapid growth.
Commenting on the impressive performance of Base Layer 2, Anatoly Yakovenko commented:
“Essentially, without Base, the Ethereum ecosystem would be dead in the water right now.”
However, on-chain economist Lily Liu highlights potential problems with the active handling of visualization groups, suggesting that they can be misleading. According to Liu, Solana has significantly more monthly active addresses, about 100 million, more than four times the 22 million reported by Base. This large difference indicates that the grouping used in the visualization does not accurately represent the activity level of the ecosystem.
Liu suggests a more accurate way to display this data is to use a single bar chart with different shading for EVM and non-EVM bars. This allows for clearer distinctions and more accurate comparisons.
Additionally, the claim that “Base and Solana” have the most monthly active addresses overlooks the fact that the NEAR protocol has an MAA of 31 million, which is higher than Base. Mr. Liu emphasized:
“So the headline should be…Solana and Nia are the most active.”
Impact on Ethereum market position
Conversely, Ether has faced challenges characterized by supply inflation and declining returns since the Dencun upgrade. In contrast, base layer 2 growth has been significant, capturing a significant share of transactions and revenue. This has established it as a strong contender among Ethereum's Layer 2 solutions.
The performance disparity between Ethereum and Base highlights the evolving dynamics within the blockchain ecosystem. Layer 2 solutions are becoming ecosystems with their own communities and economic activities.
At the time of writing, ETH price is $2,678, showing a slight increase of 2% in 7 days. 24-hour trading volume increased 68% to $19.68 billion, indicating increased trading activity and investor interest.
Furthermore, recently, Anatoly Yakovenko reveals the difference Between Solana and ETH. Despite its technical advantages, Solana has not received the same institutional attention as Ether. He noted that the contrasting scaling techniques of the two platforms could impact institutional investor interest. Solana focuses on hardware scaling, while Ethereum focuses on software solutions.
Ronnie Mugendi
Ronnie Mugendi is a veteran crypto journalist with 4 years of professional experience and has contributed significantly to various media outlets regarding cryptocurrency trends and technology. With over 4,000 articles published in various media outlets, we aim to inform, educate and introduce more people to the world of blockchain and DeFi. Outside of his journalism career, Ronnie enjoys the thrill of riding his bike and exploring new roads and landscapes.
Disclaimer: The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
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