Coinbase’s Layer 2 Base Sees Impressive Uptick in Token Holders But There’s More to the Story

Coinbase launched Base as an Ethereum layer-2 network earlier this year, marking a milestone as the first publicly traded company to launch such a network. Since making the network available for everyone on August 9, Base has witnessed significant growth.

New data suggest increased token holders on the Base ecosystem.

• According to the crypto analytic platform, Intotheblock, the number of holders of various tokens on the layer 2 network has been steadily increasing.
• Lesser known tokens such as Echelon Prime (PRIME), and Aero (AERO) have topped the chart recording 16.83k and 7.77k addresses on Base.
• In the past few months, Base has collaborated with several industry players, including Chainlink.
• Base’s rise in popularity can be attributed to the debut of the decentralized social media platform Friend.tech which not only drew in a considerable number of new users but also captured the attention of numerous influential celebrities.
• Additionally, the launch of the decentralized exchange Aerodome on Base acted as another driving force, successfully pushing the total value locked (TVL) on the layer-2 network beyond $400 million.
• However, following an explosive surge as well as retail rush, the overall activity on the Base blockchain has gradually tapered off.
• Since August 25, 2023, there hasn’t been a single day where the transaction volume for the featured prominent protocols on Base exceeded $4 million, as per ITB’s analysis.
• It further noted,

“The volume of these tokens appear to be directly correlated to the protocols incentives programs, suggesting that these tokens have yet to gain traction as a blue-chip.”

• Data from Dune Analytics further suggested that Daily active users on Base have dropped by over 64% since recording an all-time high of 145,479 on 21st August to 51,763 as of October 31st.