In a surprising turn of events, Coinbase’s layer 2 network, Base, has made significant strides in the decentralized finance (DeFi) sectors, surpassing Solana in terms of total value locked (TVL). As per data from DeFi Llama, Base’s TVL is currently standing at a robust $397.32 million, a marked jump from its position just a month and a half ago, since launching in August. As this milestone was reached, Solana‘s TVL was pegged at $358.96 million.
Given these developments, it may be observed that the last 30 days have been pivotal for Base; data revealed a striking 97.21% increase in network’s TVL, an increment that seems even more impressive when set against Solana’s 9.64% drop in their TVL over the same period. Two Base-native projects – Aerodrome Finance, a decentralized exchange (DEX), and Friend.tech, a decentralized social media app – account for large shares of TVL on the network.
Aerodrome Finance, in particular, stands out as the leader with a TVL of $97.83 million. It became operational on Aug. 28 and offers various features, including the ability for users to deposit liquidity to earn AERO tokens. After a slightly lackluster start in terms of deposit accumulation in its initial days, Aerodrome’s TVL took an impressive leap on Aug. 31, with $150 million pouring in that day alone. However, the subsequent decrease in its TVL by approximately 51% from its peak suggests that the initial excitement around the project could be tapering off.
Friend.tech, the other major player, launched on Aug. 11, and enables users to tokenize their social networks through the buying and selling of “Keys.” Despite previously being marked as “dead” due to falling user activity and fees, it saw a significant increase in September; in fact, according to DeFi Llama data, Friend.tech’s TVL grew by a staggering 540% over the last month.
Moreover, Base recently reported new highs in terms of daily transactions, reaching 1.88 million on Sept. 14, and surpassing rival chains like Optimism and arbitrum, which combined had almost 880,000.
While the expansion of TVL on Base’s network is indeed a reason to celebrate, it’s equally imperative that these growth rates are viewed with a healthy dose of skepticism. The long-term sustainability of these platforms must take into account the inherent volatility within the crypto domain. These networks’ reliance on factors such as their user activity, which can sharply fluctuate or even decline, can equally lead to a swift contraction of their respective TVLs. As impressive as the recent figures might seem, they are by no means a guarantee of future success. To conclude, while Base’s recent success provides plenty of reasons to be optimistic, the lessons from similar platforms must serve as a reminder of the swings and roundabouts of the crypto world.
Source: Cointelegraph
