As 2024 marks the 15th birthday for Bitcoin, we are at a stage similar to the 1990s, where crypto, like the internet, is crossing the chasm between early adoption to mainstream acceptance thanks to the improvements in blockchain performance.
We believe the critical next step to onboard the next billion users depends on blockchains’ ability to attract and retain users. To this point: Base, the Ethereum Layer 2 developed by Coinbase, has emerged as a frontrunner with impressive growth this year.
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Source: Token Terminal, April 2024
What Factors are Driving Base’s Success?
Although Base does not have its own token, it uses ETH for gas, OP for governance, and AEVO, the token of the largest DEX on Base, functions as the Base ecosystem’s incentive token through its vote escrow mechanism. The Base ecosystem fund is acquiring AERO to give out as incentives to projects so they can lock up AERO to incentivize liquidity.
While several established DeFi projects have deployed on Base, the native projects on Base have garnered a significant market share. Aerodrome, the largest DEX on Base by TVL, has generated almost the same amount of fees as Uniswap recently, a notable achievement considering Uniswap is deployed on 16 chains.
Source: Token Terminal, April 2024
Moonwell, the leading borrowing and lending protocol on Base, boasts a TVL that nearly matches those of AAVE and Compound on Base combined and has seen 4X user growth since the beginning of the year. Through the USDC Anywhere program, Moonwell can tap into USDC stored on any chains supported by Circle, in addition to the USDC stored on Coinbase.
Source: Gauntlet, April 2024
Degen, initially a meme token but now utilized by Farcaster as the de facto in-app currency, has experienced a five-times increase in users within a month, exceeding the growth record set by BONK, the famous Solana meme coin.
Source: Dune Analytics, April 2024
With Coinbase’s support and the rapid development of its ecosystem and community, Base is poised to be forebear to bring blockchain technology closer to mainstream adoption.