In the Ethereum Layer2 ecosystem, Coinbase’s Base accumulated over $6 million in on-chain profits in May, surpassing Blast by a significant margin. The article was written by Nathan Reiff and translated and written by Baihua Blockchain.
Following its launch by the largest cryptocurrency exchange platform in the United States, Coinbase, the Ethereum Layer2 scaling network Base generated over $6 million in on-chain profits in May, becoming the most profitable Layer2 network, surpassing competitors such as Blast and Optimism.
According to data from L2BEAT, Base’s profit surge is attributed to the rapid growth of the total value locked (TVL), which was driven by Ethereum implementing the expected Dencun upgrade in March, including EIP-4844 and proto-danksharding.
Based on data from the blockchain analysis platform GrowThePie, Base ranked first in on-chain profits among all Layer2 chains in May with $6.1 million, followed by Blast with $1.5 million and Optimism with $1.4 million. Despite Base’s significant lead in profit competition over these competitors, its monthly profit sharply declined after the Dencun upgrade in March.
Blast, a new Layer2 network developed by developers in the Blur NFT market, has recently gained recognition for its unique ETH and stablecoin native revenue, as well as lucrative incentives provided to users by projects like Pacmoon and Fantasy Top.
Blast’s share of all Layer2 profits increased from 5.3% in April to 15.2% in May. However, it still lags far behind Base, which occupied 56.8% of all Layer2 profits last month.
The on-chain profitability of Layer2 networks refers to the balance between revenue generated through fees, token issuance, and other means, and the costs associated with interacting with the Layer1 network (Ethereum). It ensures that the network can cover the costs of interacting with the Layer1 network while earning profits. It does not include any off-chain costs and should not be seen as a complete picture of executing these networks from top to bottom.
A dashboard maintained by the on-chain analyst Kofi lists Base as the first, but profits in May were slightly below $7 million. The difference may be due to variations in how each data provider measures income and expenses. However, Dune’s dashboard does not include Blast’s data, so a complete understanding of the leading Layer2 network in this regard is lacking.
According to GrowThePie’s data, Base has been the most profitable Layer2 network since March 2024. In the past three months, its total value locked (TVL) has almost sextupled, growing from $1.3 billion to $7.6 billion, reaching a historical high for the chain. With Optimism’s TVL remaining relatively stable in the past month, Base may surpass OP Mainnet.
Base and OP Mainnet are both built on the OP Stack and are part of Optimism’s “superchain” ecosystem, although they are considered independent Layer2 networks within that ecosystem. In terms of total value locked, Base still lags far behind industry leader Arbitrum, whose TVL has reached $19.1 billion.
Besides the upgrades brought about by the Dencun fork, Base’s attractiveness in the cryptocurrency community has been gradually increasing since Coinbase announced the launch of a new smart wallet to enhance new users’ accessibility to on-chain transactions.
Coinbase’s smart wallet will adopt an account abstraction approach to provide convenient on-chain transactions for those unfamiliar with DeFi details. Base also benefits from Coinbase’s popularity and the additional exposure it brings, as well as promotions like the recent “On-Chain Summer” incentive event, which started this week.
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