Base’s rapid rise in the crypto ecosystem is turning heads. In just one month, its total value (TVL) has almost doubled.
This growth spurt is causing headaches for crypto giant Coinbase.
Can the basic network challenge Solana?
Especially after Ethereum’s Dencun upgrade improved transaction efficiency on layer 2 solutions such as Arbitrum, Optimism and Base. Therefore, users flocked to these layer 2 platforms.
Base’s meteoric rise has been impressive, with a record total value (TVL) of $794 million. This represents a weekly increase of 19.62%, surpassing Solana’s growth of 10.54%. However, Base still lags behind Solana’s massive $4 billion TVL and $2 billion volume.
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Basic network TVL. Source: DefiLlama
In particular, Base could have a strategy to close this gap with Solana. Coinbase is innovating with its ‘Smart Wallet’, targeting its massive user base of around 100 million. This wallet is designed to streamline interactions with decentralized applications (dApps).
Moreover, the company wants to simplify on-chain activities for its users by eliminating the cumbersome initial sentences and introducing passkeys. This could make Base a preferred access point for many.
Additionally, Base’s recent increase in volume and dApp integration is a promising sign. Nevertheless, the network has faced challenges such as failed transactions and higher gas rates during peak hours. These issues highlight the need for Coinbase to scale up its infrastructure to meet growing demand.
The pressure was evident on Wednesday when both Coinbase and its wallet experienced transaction errors due to Base’s increased activity. To compete with giants like Solana, Coinbase must prioritize scaling to avoid such disruptions. The goal is to ensure a seamless experience for the potential wave of users moving to on-chain activities.
Interestingly, Base’s appeal also extends from users to developers. On-chain analyst Hitesh Malviya revealed that Base surpassed Ethereum in new contract deployments last week, indicating brisk development activity. This trend suggests that Base could enrich its dApp ecosystem, further strengthening its market position.
“Base achieved 7,100 new contract deployments last week, while Ethereum only had 5,000 new deployments. It is a great flywheel that developers keep steering towards so that new people keep coming,” said Malviya.
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For Coinbase, Base’s explosive growth represents both an opportunity and a challenge. While it means a lucrative market and potential expansion of the user base, it also requires significant infrastructure improvements.
Overcoming these technical hurdles is critical to maintaining momentum and capitalizing on the increasing interest in Base.