The Base Layer 2 (L2) network has seen massive capital inflows over the past 24 hours, driven by bullish sentiment after Coinbase’s second-quarter earnings exceeded expectations. The L2 network is built on Ethereum and uses Optimism’s OP Stack to provide users with high security, scalability and interoperability.
When Base debuted, Coinbase said exchange users would access the crypto ecosystem through Base’s intuitive interface. This marked a major development in Coinbase’s business model, elevating it from a centralized crypto exchange to a Web3 gateway.
Coinbase Q2 Earnings Inspire Base TVL Rise
Base Total Value Locked (TVL) increased by $11 million in the last 24 hours, from $1.666 billion to $1.677 billion between August 1 and 2. This comes after recent challenges on the L2 network, including security concerns related to its meme coin projects.
The renewed positive sentiment comes after the company’s second-quarter earnings results showed it exceeded its revenue expectations. Coinbase reported its second-quarter earnings Thursday, with earnings of $0.14 per share on revenue of $1.40 billion, beating Wall Street estimates, which had expected earnings of $0.94 per share on a sales of $1.38 billion.
The exchange’s subscription and services unit, made up of non-trading companies, contributed $599 million to revenue totals.
Read more: Coinbase Review 2024: The Best Crypto Exchange for Beginners?
Basic TVL, Source: DefiLlama
In addition to the numbers, Coinbase CEO Brian Armstrong acknowledged partnerships with Bitcoin and Ethereum ETF (exchange-traded fund) issuers. As BeInCrypto reported, Coinbase provides custodial services to multiple ETF issuers, allowing investors to ensure safe custody of tokens.
Armstrong also reiterated the need for regulatory clarity, highlighting that Coinbase is the only crypto exchange publicly listed in the US. He is optimistic that the next US president will be “constructive on crypto,” despite being a Republican or Democrat.
“We are increasingly optimistic that the next administration, whether Democrat or Republican, will be constructive on crypto. The rhetoric has changed,” Armstrong said during the post-earnings conference call.
Three factors support the Coinbase CEO’s optimism:
- Politicians on both sides of the aisle have taken notice and there is growing momentum to pass comprehensive crypto legislation.
- The US Securities and Exchange Commission (SEC) has halted some of its investigations into the sector. Spot ETF approvals are also a good sign.
- The Supreme Court overturned Chevron’s deference, an established legal standard. This effectively undermined the regulator’s enforcement policy against the sector. BeInCrypto reported that the lawyer who destroyed the Chevron Doctrine is now a member of Coinbase’s board of directors.
Read more: Who is Brian Armstrong? A deep dive into the founder of Coinbase
Another interesting revelation in the post-earnings call is that Coinbase plans to launch a crypto index fund called Coinbase 500. This is part of the exchange’s product roadmap, inspired by signals from US politicians and regulators that want more positive, identify crypto-oriented positions.