Base, the Ethereum Layer-2 network incubated by Coinbase, has seen its total value locked (TVL) drop by $1.4 billion in recent weeks.
The decline comes as the public debate about the chain’s strategy and product direction intensifies.
Base TVL is sliding as builders, critics and Coinbase leadership clash over the chain’s direction
Basic TVL has fallen from about $5.3 billion in January to about $3.9 billion at the time of writing.
Basic TVL. Source: DefiLlama
The decline matters because TVL remains one of the most closely watched indicators of capital activity and developer confidence in blockchain ecosystems.
However, TVL fluctuations are common in L2 networks, especially during broader market rotations or liquidity shifts.
As liquidity tightens, Base is also facing unusually public criticism (and backlash) from Coinbase founders, investors, and leadership.
Basic creator Jesse Pollak has framed this moment as part of a typical growth cycle for fast-growing ecosystems.
“The base went from non-existent to one of the most important chains in the world in two years, which happened because of the builders. And as with any rapid growth, some left, some pivoted, some gave up. The builders who remain are the ones who will define the next era,” Pollak wrote.
His comments echo the view of many infrastructure teams: that early peaks often attract speculative capital and short-term projects, followed by periods of consolidation before the next phase of development.
Critics argue that the grassroots have lost focus
Some founders and investors say Base’s recent challenges are strategic rather than cyclical. A builder and Coinbase shareholder known as Hish on
As a $COIN shareholder, I am deeply concerned about the way @Baseapp was marketed and executed.
It was pitched as the ‘mother of all super apps’.
Then they integrated:
– @farcaster_xyz, whose founders later worked to build a competitive chain for @Base
– @Zora’s creator/content coins,…— hih 🏴☠️ (@hishboy) February 17, 2026
Investor Mike Dudas echoed similar concerns, saying that Coinbase Wallet was previously positioned as a broad on-chain hub, but strategic pivots shifted priorities.
Coinbase’s leadership acknowledges missteps
Coinbase CEO Brian Armstrong immediately responded to the criticism and accepted responsibility for previous decisions.
“I will take responsibility for that if you want to fire someone,” Armstrong wrote, adding that the Base App now aims to be “the self-protecting version of Coinbase, and focused on trading.”
He emphasized that self-control is becoming increasingly important as more financial activities move within the chain. However, the Coinbase executive also expressed that most of the company’s resources remain focused on its main retail platform.
In separate comments on Coinbase’s broader strategy, Armstrong also noted the increasing institutional involvement in crypto and highlighted the growth in:
- Trading volumes
- Assets on the platform, and
- Product revenue streams,
According to Armstrong, the company remains well positioned as the financial system grows.
The debate extends to ecosystem design
The discussion goes beyond direct product changes and focuses on bigger questions about how crypto ecosystems grow.
Uniswap founder Hayden Adams suggested that combining managed accounts and self-management into a unified interface could improve usability. His comments reflect the industry’s ongoing efforts to simplify onboarding without sacrificing decentralization.
“Base App is now focused on being the self-serving version of Coinbase”
I’m sure there are good reasons not to do this, but it would be cool if they took this to the extreme and merged the apps into one
Users can choose between self-management and management, the rest of the app is ~the same https://t.co/5bzU9eH5DS
— Hayden Adams 🦄 (@haydenzadams) February 18, 2026
At the same time, some community commentators argue that Base needs to strengthen incentives and culture to retain developers and users.
Meanwhile, others counter that long-term adoption depends more on infrastructure, compliance and institutional partnerships.
If Base can translate its infrastructure advantages and Coinbase distribution into sustainable user growth, the current downturn may prove temporary.
If not, competition between Layer 2 ecosystems will likely increase as liquidity and developer attention remain highly mobile.
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