Coinbase’s Layer 2 Base Stands Out as Top Choice for New Capital

Layer 2 networks have witnessed massive activity this year, even as their native tokens slumped amidst intense volatility across the broader market. These solutions have witnessed relatively steady activity since the beginning of the year.

However, the latest analysis by IntoTheBlock revealed that Base continues to be the primary attraction for new capital.

Investors Flock to Base

Over the course of this week, net ETH deposits into the Base have exceeded 6,500 ETH, marking a significant increase, according to the data shared by ITB. On the other hand, its rival Arbitrum saw just half of this figure. Optimism lagged even further behind with only a fifth of the deposits Base received.

Such a trend suggests that despite the growing interest in Layer 2 scaling solutions, investors still see Base as the preferred choice for deploying their capital, possibly due to factors like its established infrastructure or perceived reliability.

“Despite leveling activity among Layer 2s, Base continues to attract the most new capital. Since Monday, net ETH deposits to Base have surpassed 6,500 $ETH, more than double that of Arbitrum and five times as much as Optimism.”

Base – the Ethereum layer-2 solution designed by Coinbase to expand its user base on-chain – was launched in August 2023. The end goal is to ensure faster transactions at a lower cost.

Coinbase’s recently released Q1 report indicated that trading volume on the Layer 2 network exceeded that of its competitors, especially following Ethereum’s Dencun upgrade. In fact, DeFi crypto exchanges on Base witnessed daily trading volumes surpassing $1 billion, significantly closing the gap between Base and Coinbase’s main centralized exchange, which trades nearly 250 cryptocurrencies.

Following the Dencun upgrade, Base saw a rapid increase in its daily transaction volume and revenue. It even outpaced already established players like Optimism and Arbitrum. This upgrade essentially slashed costs for Layer-2 scaling chains such as Base, resulting in a significant rise in user engagement and transaction volume.

Base Witnesses Surge in Scammer Activity

Owing to its growing popularity, the Base chain appears to be a target for scammers.

Scam Sniffer’s data observed that two of the top 10 largest single thefts occurred on this chain, making up 21% of the month’s total theft. Since January, scammer activity on the network has increased by almost 1,900%, resulting in approximately $170,000 stolen through phishing scams. In April, nearly 90% of the stolen assets were ERC-20 tokens.