Base, Ethereum’s Layer 2 solution backed by Coinbase, has overtaken Arbitrum to become the largest Ethereum Layer 2 by Total Value Locked (TVL).
This significant milestone underscores the growing influence of the Base ecosystem, which has been gaining traction thanks to the powerful support of Coinbase. Over 90% of Arbitrum holders, in contrast, remain out of the money.
What's going on with @arbitrum 🤔?
Over 90% of it's holders are out of the money.
Data: @intotheblock https://t.co/pUE0Xl54jD pic.twitter.com/YLUNb81ibv
— champagne mami 💕 (@EkponoAkwaowo) October 15, 2024
A major driver of Base’s growth is Aerodrome, the dominant decentralized application (dApp) on the network, currently controlling 55% of the ecosystem’s liquidity. Aerodrome’s expansion is fueled primarily by its emissions of AERO tokens, with its two largest liquidity pools contributing heavily to the platform’s TVL.
Base flipped Arbitrum by TVL over the weekend, so I decided to take a look at what fueled the ~$900M in its TVL growth over the last month.
Out of the top dapps, Aerodrome maintains 55% dominance and has the most growth in % as well as $ terms. This makes sense because most of… pic.twitter.com/LaYmmbG6iy
— Abdul (@0x_Abdul) October 15, 2024
The first liquidity pool (LP), featuring an ETH-superOETHb pairing, was launched just four weeks ago and already holds a staggering $457 million in TVL. Super OETH is Origin Protocol’s liquid staked ETH, and while the pool’s size is impressive—2.5 times larger than Lido’s biggest stETH LP—the volume and fees generated remain relatively low.
The second key LP, the USDC-AERO pool, has accumulated over $160 million in TVL, with an attractive 60% APR. This growth has been closely linked to AERO’s remarkable 3x price increase over the last month, boosting confidence in the protocol.
Closer Look At Base TVL Surge
Base’s TVL surge is closely tied to Aerodrome’s success, as its liquidity hub status trickles down benefits to all protocols within the ecosystem. While the sustainability of Super OETH’s rapid growth is uncertain, it has set a strong precedent for other liquid staking protocols to build their liquidity on Base.
Additionally, @Circle’s USDC and EURC processed nearly $250 billion in transfer volume on Base in September, surpassing Ethereum Layer 1’s $214 billion for the same period. Base’s momentum has firmly positioned it at the forefront of Layer 2 solutions.
' @Circle's USDC and EURC hit nearly $250B in transfer volume on @Base in September 🤯
For context, Ethereum L1 did $214B in the same period pic.twitter.com/4k9HlBCrR2
— Milk Road (@MilkRoadDaily) October 15, 2024
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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