Base Network’s Rapid Growth Poses a Challenge to Coinbase
The cryptocurrency ecosystem has been abuzz with the rapid ascent of Base Network. In just one month, its total value locked (TVL) has nearly doubled, capturing the attention of crypto enthusiasts. This surge in popularity has also caused some headaches for the industry giant Coinbase.
Can Base Network Compete with Solana?
Ethereum’s recent upgrade, known as Dencun, has significantly improved transaction efficiency on layer-2 solutions like Arbitrum, Optimism, and Base. As a result, users have flocked to these layer-2 platforms, contributing to Base Network’s impressive growth.
Base Network has achieved a record TVL of $794 million, representing a 19.62% weekly increase. While this growth is impressive, it still falls short of Solana’s massive $4 billion TVL and $2 billion volume.
Despite trailing behind Solana, Base Network may have a strategy to close the gap. Coinbase is innovating with its “Smart Wallet,” targeting its vast user base of around 100 million. This wallet aims to streamline the interaction with decentralized applications (dApps) and facilitate on-chain activities by eliminating seed phrases and introducing passkeys. This approach could make Base Network an attractive entry point for many users.
In addition to user adoption, Base Network has experienced a surge in volume and dApp integration, indicating promising growth potential. However, the network has also faced challenges such as transaction failures and increased gas fees during peak times. To compete with giants like Solana, Coinbase must prioritize scaling its infrastructure to accommodate growing demand and ensure a seamless experience for users transitioning to on-chain operations.
Interestingly, Base Network’s appeal extends beyond users to developers as well. On-chain analyst Hitesh Malviya noted that Base Network surpassed Ethereum in new contract deployments, indicating a vibrant development activity. This trend suggests that Base Network could further enrich its dApp ecosystem, solidifying its market position.
“Base Network had 7,100 new contract deployments last week, while Ethereum only had 5,000 new deployments. It’s a great flywheel where devs keep shipping, so a new crowd keeps coming,” said Malviya.
For Coinbase, the explosive growth of Base Network presents both opportunities and challenges. While it opens up a lucrative market and potential user base expansion, it also requires significant infrastructure enhancements. Overcoming these technical hurdles is crucial for sustaining momentum and capitalizing on the rising interest in Base Network.
Hot Take: Base Network’s Rise Sparks Competition in the Crypto Ecosystem
The remarkable growth of Base Network has caught the attention of the crypto community. As its TVL continues to rise and surpasses Ethereum in terms of new contract deployments, Base Network is emerging as a formidable player in the industry. However, it faces stiff competition from established networks like Solana.
To stay ahead of the game, Coinbase must focus on scaling its infrastructure and providing a seamless user experience. By innovating with its Smart Wallet and targeting its massive user base, Coinbase can attract more users to Base Network and solidify its position in the market.
The future of Base Network looks promising, but challenges lie ahead. As the crypto ecosystem evolves and competition intensifies, it will be interesting to see how Base Network adapts and grows.
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