In less than a month, the Ethereum layer-2 network Base, supported by Coinbase, has experienced a significant surge, with its total value locked (TVL) doubling to $2.54 billion, reflecting a remarkable 74.70% increase. This surge has been primarily driven by the frenzy surrounding meme coins. Notably, Base reached the $1 billion TVL mark on February 27, just 226 days after its launch in August, and then reached $2 billion TVL only 25 days later.
The Ethereum upgrade Led to $2.5 Billion TVL
In the past, developers showed a preference for Solana over Ethereum for launching meme tokens, mainly due to its lower fee structure, which facilitated easier trading and more affordable token presales. Consequently, Solana-based meme coins like Dogwifhat (WIF), Book of Meme (BOME), and Slerf (SLERF) gained popularity.
However, with the recent Ethereum Dencun upgrade on March 13, gas fees on Ethereum Layer 2s have reportedly seen a significant reduction, fulfilling its promise of a 10x reduction in fees.
This decrease in gas fees has attracted developers and traders back to Ethereum, the blockchain where the meme rush initially began.
Read more: Ripple's CTO Releases an Update on the Trading Bot: What Implications Will it Have for XRP?
BASE: Riding the Next Wave of Meme Coins
Significantly, Coinbase's Layer 2 solution, Base, has emerged as a significant beneficiary of this fee reduction. Following the Dencun upgrade, Base has witnessed a notable decrease in fees, resulting in a surge of interest among users.
USD Coin (USDC) holds the title of being the largest token in terms of natively minted value whereas Ether (ETH) claims the distinction of being the largest token by canonically bridged value.
Read more: From Solana Hype to Heartbreak: Investigating SLERF Blunder
Source: L2Beat
Part of this surge is attributed to the Ethereum Dencun upgrade, which drastically reduced network fees, positioning Base as a formidable contender for high-frequency trading.
The Strategic Play for Coinbase's Market Entry
Jesse Pollak, the mastermind behind Base, disclosed that a substantial portion of Coinbase's revenue is dedicated to advancing Base's development. This deliberate investment highlights Coinbase's strategy to utilize Base as an entry point to the crypto market for its expansive user base of over 110 million individuals.
Integrating with Coinbase's extensive user network creates an optimal setting for user acquisition, tackling a prevalent hurdle for emerging blockchains. In a connected move, Coinbase CEO Brian Armstrong launched a soulbound NFT airdrop on Base, potentially laying the groundwork for a Base token airdrop.
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Disclaimer: This response provides information based on available data and general analysis. It does not constitute financial advice. Always perform your own due diligence and consult with a professional financial advisor before making investment decisions.