In the fast-paced world of cryptocurrencies, a new player has emerged to disrupt the status quo. Coinbase's Base, Ethereum's Layer 2 scaling network, has quickly grown to become the third largest network of its kind, surpassing even Ethereum itself and the popular Arbitrum network.
What is causing this meteoric rise? The frenzy of activity surrounding the meme coin has propelled Base to the forefront of the Ethereum ecosystem. In the dynamic cryptocurrency scene in early 2024, meme coins have emerged as a major attraction, delivering unprecedented profits.
According to data from L2Beat, a platform that tracks Layer 2 networks, Base's Total Value Locked (TVL) soared to more than $4.37 billion, an impressive 22% increase. Base leads his competitors in terms of trading volume, with his 50.34 million 30-day trades. This exceeds Arbitrum, Ethereum, and Optimism with 40 million, 37.9 million, and 18 million transactions, respectively.
Meme Coin Mania drives base growth
The spike in Base's TVL is closely related to the explosion of meme coin activity on the network. There was a notable divergence in asset performance in the first quarter of 2024.
Meme coins, often considered the humorous side of the cryptocurrency market, have surprisingly outperformed other assets. According to data from Coingecko, meme coins recorded an average gain of 1,312.6%, indicating a change in investor sentiment and market dynamics.
BitMEX co-founder Arthur Hayes believes that memecoins are a positive addition to the blockchain network and will attract new crypto enthusiasts. In March 2024, the number of traders increased significantly, and the number of wallet addresses holding meme-related tokens for less than 30 days reached record levels.
But Base's success hasn't been without its challenges. Dune Analytics reports that the network has been targeted by fraudsters, who reportedly stole more than $3 million in March alone. This highlights the need for robust security measures and vigilance in the rapidly evolving cryptocurrency landscape.
The future of layer 2 networks
Despite these challenges, Base's success highlights the importance of layer 2 scaling solutions in addressing Ethereum's slow speeds and network congestion. VanEck's report states that the market capitalization of Layer 2 networks could reach a staggering $1 trillion by 2030, highlighting the huge growth potential for networks like Base.
In conclusion, Coinbase's Base has firmly established itself as a force to be reckoned with in the Ethereum ecosystem. Fueled by a surge in meme coin activity and backed by innovative Layer 2 scaling technology, Base is poised to continue its upward trajectory, reshaping the defi landscape in the process.
