Base Ecosystem Facing Challenges

Base, the layer-2 network of the largest American crypto exchange, Coinbase, is facing tough times following its strong entrance into the market over a year ago.

Data from the market analytics platform IntoTheBlock indicates that the Base ecosystem is under pressure due to a recent market dip.

Base Ecosystem Under Pressure

After reaching a peak of $4 billion in total value locked (TVL) in mid-December 2024, Base is now struggling with a TVL of $3.2 billion, according to decentralized TVL aggregator DeFiLlama.

Base’s transaction volume has also fallen from $2.2 billion in mid-December to $852 million currently. The network’s revenue plummeted from $629,000 to less than $192,000 at the time of writing. Additionally, the chain’s active addresses and transactions have tumbled significantly.

Amid this decline, IntoTheBlock mentioned that only a handful of tokens have the majority of their holders in profit, weakening retail interest.

This network shift is evident in transaction volumes – IntoTheBlock’s basket of eight Base assets, including Aerodome Finance (AERO), Morpho (MORPHO), and Brett (BRETT), have recorded a 78% decline in on-chain volume since December.

Base’s Past Performance

Prior to these negative dynamics, Base was the go-to network for new retail traders. Its daily transactions surged 1,600% in 2024, growing from 372,000 in January to 6.63 million in October. Its TVL also rose by 470% over the same timeframe, expanding its share of the global on-chain TVL from 1.07% to 3.59%.

In addition, Base’s daily transactions skyrocketed by 1,900% from 2.1 million to 42.34 million, earning the network a 9% market share in global daily transaction volume. In November, the chain’s TVL rallied above $10 billion for the first time, making Base the second Ethereum layer-2 network exceeding that threshold, following Arbitrum.

Having recorded such significant growth last year, Base’s current condition raises the question of whether the network is at a crossroads – if this is a temporary setback or a turning point for the leading layer-2 chain.

However, with the year just beginning, analysts anticipate an altseason in the coming months. This, coupled with Base’s ambitious roadmap for 2025, offers hope for the chain’s mid-term trajectory.