Base, the Ethereum Layer-2 protocol developed by crypto exchange Coinbase, has recently witnessed a surge in its activity, resulting in a significant increase in the number of daily active addresses.
According to data from on-chain analytics platform IntoTheBlock, Base’s increase in daily active addresses can be linked to the launch of Coinbase Wrapped Bitcoin (cbBTC) and the introduction of the Base Name Service (BNS).
Basic active addresses are increasing
Coinbase launched cbBTC on Base and Ethereum on September 12, months after integrating the Lightning Network for bitcoin (BTC) transfers onto the protocol. The wrapped token is backed 1:1 by BTC and held by the crypto exchange. It provides users with access to various decentralized finance (DeFi) applications, protocols, use cases and features.
In less than two weeks after launch, cbBTC has amassed over 3,500 users, with an average of $472 million worth of BTC settled on Base daily.
While cbBTC contributes significantly to the growth of Base’s daily active addresses, IntoTheBlock says the hype surrounding BNS plays an even bigger role.
Coinbase launched the Basenames service on August 21. This service allows users to establish their identity on the network by registering human-readable names for their addresses. Like the Ethereum Name Service (ENS), it provides a unified name service and on-chain identity experience for everyone on Base.
Basic names play an important role
Just three days after Coinbase introduced Basenames, the number of daily active addresses on Base reached a record 1.05 million. This figure has now doubled and exceeded two million just a month later.
Data from Ethereum Layer-2 analytics platform GrowThePie shows that Base currently represents 70% of active addresses among Layer-2 networks based on Ethereum, followed by Arbitrum, which accounts for 9.6%. Base surpassed Arbitrum at the end of June and has remained ahead of protocol ever since. Over the past week, Base has seen over 6.8 million active addresses, while Arbitrum has registered fewer than 943,000 addresses.
It is worth mentioning that cbBTC has received a lot of criticism while contributing to Base’s growth. The crypto community has raised concerns about Coinbase’s lack of transparency into its Bitcoin reserves and the token’s user agreement, suggesting that the exchange would not fully reimburse users for BTC lost due to malicious activity or unforeseen events.