News & Analyses

Coinbase’s BASE crosses $2 billion in TVL, eyes at becoming next meme coin hub

  • Coinbase’s Base is set to overtake Blast to become the third-largest Ethereum L2.
  • Among many other metrics, DEX volume on Base has more than doubled in the last month.
  • Smart wallet could onboard over 100 million Coinbase users to the meme ecosystem on Base.

Coinbase’s Layer 2 chain Base saw a surge in its on-chain metrics after the Ethereum Dencun upgrade went live on March 13. The new update slashed fees on Layer 2 chains by 10x.  The benefits of the Dencun upgrade along with its smart wallet functionalities seems to have attracted the meme coin madness from Solana to Base. 

Meme coins is where the profit is

The meme coin frenzy that began in early March has been localized to Ethereum and Solana blockchains. This meme coin rally  gave rise to the popular meme tokens like dogwifhat (WIF), Book of Meme (BOME), and Slerf (SLERF).

  • Dogwifhat shot up 358% between Februay 28 to March 15. The market capitalization of WIF currently hovers around $2.78 billion. 
  • Likewise, BOME price rose dramatically from $0.001 and set an all-time high of $0.26 on March 16.
  • Slerf meme coin faced stiff controversy but emerged victorious and currently trades at $0.61 after surging 16% in the past 24 hours.

Also read: Memecoin mania briefly sends Book of Meme past $1 billion in market cap amid insider trading

Why Base could breed next meme coin cycle

Developers favored Solana over Ethereum in launching meme tokens due to its low fee structure, which ensures easy trading and cheap token presales. The recent Ethereum’s Dencun upgrade has decreased the gas fee costs on Ethereum Layer 2s by a significant amount. To be precise, the Dencun upgrade promised a 10x reduction and has delivered it. 

The chart shows how gas fees have dramatically reduced since the Dencun upgrade on March 13. The low fees have attracted developers and traders back to the blockchain where the meme rush began.

Ethereum layer 2 fees

Ethereum layer 2 fees

One L2 that has largely benefitted from the fee slash is Coinbase’s Base. Since the Dencun upgrade, fees on Base have significantly reduced, boosting users’ attraction to the L2. It has doubled its TVL in the last month, from around $405 million in February to over $884.4 million on March 25, just shy of Blast, another L2. However, a recent tweet from Base Daily, an X account that posts daily updates about Base, said it has crossed over $2 billion in TVL.

Daily average users, dapps, and DEX volume on its platform have also seen significant growth, according to DeFillama. Most of this recent growth comes from Bases’s easy onboarding experience through its smart wallet feature, which allows users to create wallets without dealing with long key phrases. The smart wallet also allows options for wallet recovery, which may pull over 100 million Coinbase users to its meme ecosystem. 

This easy user onboarding process—combined with the low free structure made possible by the Dencun upgrade—attracts users, and Base might become home to the next meme coin mania.

Meme tokens on Base are rising

While meme coins’ rally on Solana slowed down, their counterparts on Base have piqued, with meme tokens like TOSHI and Briun Armstrong (BRIUN), among many others, recording huge gains in the past three days.

TOSHI/WETH 1-hour chart

TOSHI/WETH 1-hour chart

DEGEN/WETH 1-hour chart

DEGEN/WETH 1-hour chart

Considering Coinbase’s alignment to the Base ecosystem, speculation is that more meme tokens will flood its ecosystem in hopes of a quick listing on the US’s largest crypto exchange.

In other news, Coinbase CEO Brian Armstrong launched a soulbound NFT airdrop on Base that many in the crypto community have said may play a role in a potential Base token airdrop. 

Meme coins are highly volatile and are subject to rug pulls, where the developer or project’s team pulls the liquidity for a particular token, plummeting its value to zero. Hence, investors need to exercise caution as a majority of the meme coins are typically dead within a few weeks. The ones that survive can result in life-changing money to early investors.

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