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.

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.

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.

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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