Is Base taking over as the go-to blockchain, with over 3.1M daily transactions?

Base blockchain, Coinbase’s tokenless L2 protocol, continues to expand and add more apps. The Q2 period was notably successful, accelerating the effect of Base. 

The “onchain summer” effect of Base is starting to give results as the platform grows on most metrics. It is not only growing the number of supported apps, but also taking over as the go-to chain for key crypto services.

Read: Coinbase Launches Layer 2 Blockchain Base to help developers build dApps on-chain

Recent research by Token Terminal shows that Base is successful both in reaching new users and in retaining a loyal base. User inflows have grown since the start of 2024, and up to 25% of users are retained for more than a month. 

Daily transactions also peaked for Base in June, reaching a record above 3.1M. The activity has also become more consistent in the past two months. In terms of value, Base has a turnover of close to 200K ETH daily.

Base not only takes away users from other chains, but also draws in ETH deposits to its DeFi apps. In June, a total of 620,977 ETH were bridged onto the Base chain, to serve as a form of wrapped tokens for trading and liquidity pools.

Base takes a cut from the Ethereum, L2 ecosystems

The traffic on Base is partially taken from apps formerly active on Ethereum and its scaling L2 layers. Base erased the advantage of other big L2 hubs like Arbiutrum, Optimism and Polygon. The low fees on Base drew in traders, causing Uniswap routers to become the most used app on Base. 

ETH is also the most widely bridged token on Base, with inflows accelerating since March. Other tokens include the two major stablecoins, USDT and USDC, as well as DAI. Base is a tokenless protocol, and has not announced an upcoming asset. For that reason, the chief sources of liquidity are already the assets most widely used in the DeFi ecosystem. 

Base blockchain still needs ETH for liquidity and trading, especially on Uniswap routers. Source: Dune Analytics

The other highly active element was USDC, the fully transparent stablecoin which is tailored for mainstream users. Other active apps include the 1inch exchange, another influential addition to the DeFi landscape this year. 

The deployment of apps on Base, along with the “onchain summer” campaign led to an expansion of Base users. Daily, more than 500K wallets interact with the blockchain, getting ahead of Ethereum’s 300K daily users. Base is also closing in on Solana, which boasts 800K daily users.

Also read: 30 Questions and Answers About Layer-2 Blockchain

From July 2, Base will also partner with Apebonds, to introduce an open financial system. Apebonds accepts multiple assets in exchange for NFT bonds that pay back earnings over time. The goal is to ensure enough locked liquidity, while rewarding bond buyers. Base is the latest addition to Apebonds, which is already present on BNB Chain and the Linea ecosystem.

Base aims to target developers

During a time when most tokens are stagnant, projects aim to boast their ability to draw in developers and build new features. Base currently draws in 32 core developers, compared to 75 for Solana. Yet Solana’s blockchain drew in big numbers, later losing most of the development activity. 

Base aims to bring back talent to build real features and break out of the meme-based trading. Base partners with other projects to offer incentives for new builders.

Recently, Base also announced the recipients of its 2024 Builder grants. In June, the chain also completed its month-long Buildathon, distributing $198K in bounties and rewards. Base is also one of the potential hubs to re-grow interest for NFT and Web3 gaming, a sector that has not yet recovered from the 2022 crash and bear market.  

Base is also trying to integrate fault proofs, or a tool where any actor can produce a verifiable network state. The goal is to decentralize the movement between Base and L1 chains like Ethereum. The new way of withdrawals will be launched on testnet from July 15. To increase the security, Base will increase the waiting period to one week. There is no deadline for fault proofs to launch officially on the Base mainnet.

Cryptopolitan reporting by Hristina Vasileva