How Coinbase's Layer-2 Network Could Experience a $4 Billion (TVL) Surge?

Bittime - Coinbase's Layer-2 network, Base, stunned the crypto world last week with a spike in total value locked (TVL) that surpassed $4 billion for the first time.

This makes it a significant contributor to Coinbase's profits, with an estimated $26 million net profit since its launch in July 2023.

Rapid Growth

Base's rapid growth was driven by strong transaction and fee volumes, fueled by new project listings and high demand.

Transactions on Base accounted for more than 60% of all Ethereum activity in Q3 2023, making it a major player in the Ethereum ecosystem.

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Fee Surge at Base Benefits Coinbase and Positions It As a Strong Player in Layer-2

According to a CoinShares report, high demand on Base triggered a spike in gas fees, generating huge revenue for Coinbase.

85% of profits are allocated to Coinbase, while the remaining 15% goes to its competitor, Optimism.

This rapid growth has made Base a major player in the Layer-2 realm, eroding the market share of other players such as Arbitrum and Optimism.

VanEck analysts predict the market capitalization of the Layer-2 scaling ecosystem to reach $1 trillion by 2030.

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The Goal of Coinbase Innovation

Aiming to increase innovation, Coinbase plans to add a USDC balance storage feature within the Base network.

This is believed to increase efficiency and security, while reducing costs and transaction completion time.

Base Occupies Position 3 (TVL)

Based on information from L2Beat, Base is in third place in terms of total value locked (TVL), below Arbitrum One and above Optimism. Currently, Base has a TVL of $5.29 billion and commands a 14.17% market share.

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