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Amidst the downward trend in Layer-2 network activity, Base, developed by Coinbase, has seen rapid growth and has caught the attention of the Ethereum ecosystem.
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Despite the Decline in Layer-2 Networks, Base by Coinbase is Thriving
While many Layer-2 networks have been experiencing a sharp drop in activity, Base, developed by Coinbase, is standing out with rapid growth, capturing the attention of the Ethereum community.
Over the past few months, Ethereum’s Layer-2 networks like Arbitrum, Optimism, and Linea have seen a notable decline in activity. On-chain data reveals that the average transactions per second (TPS) across all Layer-2 and Layer-3 Ethereum networks was 254.5 TPS on October 6, which is a significant 73% decrease from the previous high of 440.4 TPS recorded on August 20.
Take Arbitrum, for example—one of the largest Layer-2 networks. As of October 6, 2024, it had just 429,000 active addresses, a big drop from its peak of 1.13 million in May 2024. Transactions on the network have also taken a hit, decreasing by 35.7% to 1.7 million.
Similarly, Linea saw a steep 87% decrease in active users from its peak in July 2024, plummeting to fewer than 100,000 users by early October. Much of Linea’s activity dwindled after its “point farming” period ended—a key incentive that had attracted users to participate in on-chain activities.
These declines highlight the challenges Layer-2 Ethereum networks face in keeping up adoption and engagement, especially in the face of increased competition and fewer incentives for users.
Base Shines Amid the Slowdown
Despite these significant declines across the Layer-2 space, Base has been an exception, showing steady growth. On October 4, 2024, Base hit a new record with over 66 TPS, reflecting a sharp rise in transactions and overall network activity. In the past week alone, Base accounted for more than 17% of all active addresses across Layer-2 Ethereum networks, with nearly 1.52 million active addresses.
Since its launch less than a year ago, Base has rapidly grown to become the second-largest Layer-2 network in terms of total value locked (TVL), which now stands at a substantial $7.24 billion, according to L2Beat. It’s also the only Layer-2 network in the top 10 to see a rise in TVL over the past week, climbing by 1.42%.
Profitability Sets Base Apart
In addition to its impressive growth, Base is proving to be the most profitable Layer-2 network, even as others struggle. A recent report from Growthepie shows that Base brought in $26.33 million in revenue and $25.79 million in profit over the last six months—a remarkable 98% profit margin.
This strong profitability, combined with its rising network activity, makes Base a standout in a space where many others are facing serious headwinds.