or much of 2023, the Ethereum scaling solution Base has been steadily growing its daily user base and trading volume. However, recently, Base saw a massive surge in activity that sent its metrics to unprecedented highs. This spike can be largely attributed to upgrades on the underlying Ethereum network as well as Coinbase's initiatives to bring more of its customers into the growing decentralized finance (DeFi) ecosystem.
Dencun Upgrade Proves Catalytic
The Ethereum network underwent its highly anticipated Dencun upgrade on March 8, 2024. This upgrade significantly reduced transaction fees on the blockchain as well as its Layer 2 infrastructures like Base. In the days following Dencun, Base immediately began reaping the benefits as users who were previously deterred by high gas fees started flocking to the network.
On March 17, Base saw over 1 million transactions conducted on its platform, which represented a massive increase from the 440,000 daily transactions recorded before the upgrade. This flood of activity also translated to higher trading volumes on decentralized exchanges like Uniswap and 0x running on Base. By March 21, just over two weeks since Dencun, Base hit a new record high of $356 million in daily trading volume - an over 50% surge compared to the previous day.
Growing TVL and User Influx
In addition to trading volume, other key metrics for the Base network also reached new peaks. The total value locked (TVL) on Base grew to $770 million as of March 21, surpassing its previous TVL high by over 15%. Daily active users also grew substantially, with Dune Analytics reporting nearly 130,000 new users and 1.65 million transactions conducted on Base on that Tuesday alone.
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This growth has seen Base overtake competitors like Optimism and Arbitrum in terms of daily active users as well as transactions processed in the past month. Industry analysts have stated that the low fees and expanding ecosystem on Base make it an attractive proposition for those seeking an Ethereum scaling solution. With further upgrades to Ethereum and initiatives from Coinbase planned, experts foresee Base sustaining its momentum well into 2024.
Coinbase's Wallet Push Could Boost Usage
In late February 2024, Coinbase announced the launch of its long-awaited smart wallet application. This new product will allow Coinbase's over 100 million verified users to securely store and send their crypto holdings, as well as access decentralized applications directly from their wallets. The wallet is also set to have integrations with Layer 2 networks like Base, making it seamless for Coinbase customers to utilize L2-based DeFi protocols.
If the smart wallet rollout goes as planned, it could massively boost Base's daily user count through new entrants as well as greater activity from existing Coinbase users. Combined with ongoing work to strengthen Ethereum, 2024 is shaping up to be a breakthrough year for Base that cements its status amongst the top smart contract platforms. Fuelled by a highly engaged community as well as support from influential partners like Coinbase, Base seems well-positioned to continue scaling new heights of growth and adoption.
