Base, the layer-2 network of the largest American crypto exchange, Coinbase, has been facing challenges in recent times as the market dynamics have taken a toll on its ecosystem. The network, which made a strong entrance into the market over a year ago, is now struggling to maintain its momentum.
According to data from the market analytics platform IntoTheBlock, the Base ecosystem is under pressure due to the recent dip in the market. Total value locked (TVL) in Base peaked at $4 billion in mid-December 2024 but has since dropped to $3.2 billion, as reported by decentralized TVL aggregator DeFiLlama. Transaction volume has also seen a significant decline, falling from $2.2 billion to $852 million. Revenue has plummeted from $629,000 to less than $192,000, and active addresses and transactions have also taken a hit.
The decrease in active addresses and transaction count has weakened retail interest in Base, with only a few tokens showing majority holders in profit. Transaction volumes for Base assets like Aerodome Finance (AERO), Morpho (MORPHO), and Brett (BRETT) have decreased by 78% since December.
Despite the current challenges, Base had a strong performance in the past. The network saw a surge in daily transactions of 1,600% in 2024, growing from 372,000 in January to 6.63 million in October. TVL also increased by 470% during the same period, with Base’s share of the global on-chain TVL expanding from 1.07% to 3.59%. Daily transactions rose by 1,900% from 2.1 million to 42.34 million, giving Base a 9% market share in the global daily transaction volume. In November, TVL surpassed $10 billion for the first time, making Base the second Ethereum layer-2 network with over $10 billion TVL after Arbitrum.
As Base faces its current challenges, it raises questions about the network’s future trajectory. Analysts expect an altseason in the coming months, which combined with Base’s ambitious roadmap for 2025, offers hope for the chain’s mid-term outlook. The year is still young, and it remains to be seen whether the current setbacks are temporary or a turning point for Base as a leading layer-2 chain.