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Highlights
- Base's strong transaction volumes and fees is fueled by project listings and high demand.
- Coinbase has netted a total of $26 million in net profits from Base operations.
- Base faces new competition as OKX launches Ethereym Layer-2 scaling solution, X layer.
Since its inception in July 2023, Coinbase’s Layer-2 network Base has experienced significant growth and adoption within the decentralized finance (DeFi) sector. This expansion has positioned Base as a key contributor to Coinbase’s overall profits.
Coinbase Base Contributes $26 Million In Profits
Coinbase Base, an Ethereum-based Layer-2 solution, has witnessed strong growth in transaction volumes and fees amid a large number of project listings happening on the platform this year in 2024. The demand for this Layer-2 network is so high that Base also faced a situation of network congestion, a few weeks ago.
However, this surge in the gas fee has led to strong earnings for Coinbase. As per the CoinShares report, Coinbase would be taking 85% of the Base network profits while the remaining 15% will go to competitor Optimism.
Amid this stellar growth, Base has eaten into the market share of its competitors like Arbitrum and Optimism. Citing data from Dune Analytics, CoinShares reports that this uptick in Layer-2 Base network utility shall contribute to USD 26 million in net profit for Coinbase ever since its inception to now, April 15, 2024. It also provides Coinbase with a good diversification from its traditional brokerage business.
Furthermore, Coinbase seeks to continuously innovate the Base platform and make it as economically viable as possible. One significant update that Coinbase plans to bring to the Layer-2 Base network includes the ability to store users’ USDC balance within the platform. This strategic decision allows the company to efficiently handle and safeguard customer funds, benefiting from reduced fees and faster settlement times.
OKX Pitches A New Competition
On Monday, crypto exchange OKX announced the public mainnet launch of its Ethereum-based layer-2 scaling network, X Layer. This advancement positions OKX among the renowned blockchain platforms offering users faster and more cost-effective transactions compared to Ethereum’s mainnet.
X Layer is constructed using the Polygon CDK and is among the pioneering networks to utilize Polygon’s AggLayer functionality.
With the introduction of X Layer, OKX enters direct competition with Coinbase and its Layer-2 solution, Base. One notable distinction between Base and Layer X is the latter’s incorporation of zero-knowledge (ZK) proofs.
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