Base Leads Ethereum Layer 2 Profitability with TVL Surging to 76 Billion
Coinbase’s Ethereum Layer 2 network, Base, has been a standout performer in the crypto world, raking in over $6 million in on-chain profits in May. This puts Base ahead of competitors like Blast and Optimism, establishing it as a leading Layer 2 solution.
The remarkable surge in Base’s profitability can be attributed to the substantial growth of its total value locked (TVL), which has skyrocketed from $1.3 billion to $7.6 billion in the last three months. This growth was fueled by the implementation of EIP-4844 and proto-danksharding through the Dencun upgrade in March, which significantly reduced gas costs and attracted more activity to the network.
Coinbase’s upcoming Smart Wallet, which utilizes account abstraction, is expected to further boost Base’s success. This wallet simplifies on-chain transactions for new users by offering features such as gasless transactions, preauthorized payments, and one-click transactions. This user-friendly approach is anticipated to onboard millions of new users to decentralized finance (DeFi) and drive adoption of Base.
Meanwhile, Blast, a rising network from the creators of NFT marketplace Blur, has gained attention for its unique native yield for ETH and stablecoins. Its share of Layer 2 profits surged from 5.3% in April to 15.2% in May, underscoring its increasing presence in the ecosystem.
Despite Base’s impressive growth and profitability, it still lags behind industry leader Arbitrum in terms of TVL, with Arbitrum currently holding $19.1 billion. However, with Base’s rapid expansion and the anticipated launch of Coinbase’s Smart Wallet, the gap between the two networks may narrow in the coming months.
As the Ethereum ecosystem continues to evolve and Layer 2 solutions gain traction, networks like Base and Blast are poised to play a significant role in driving the adoption of DeFi and making blockchain technology more accessible to the masses.
