Coinbase’s Base, a layer-2 Ethereum scaling solution, marked its presence in 2023 but did not reach the level of user adoption seen by its contemporaries.
Comparative user growth
A recent study by Web3 analytics firm Flipside Crypto revealed that Base garnered just under two million users in 2023. This figure is modest compared to the growth of layer-1 and layer-2 blockchains. Leading the pack, Ethereum, Bitcoin, Solana, and Avalanche attracted 15.4 million, 10.7 million, 5.6 million, and 2.5 million new users respectively. Similarly, layer-2 solutions such as Optimism, Arbitrum, and Polygon witnessed significant user influxes, adding 3.3 million, 7.3 million, and 15.2 million users, respectively.
Base’s comparatively lower user acquisition is notable, given its August 2023 launch amidst considerable enthusiasm. Initial strategies initially generated substantial interest, including the on-chain summer initiative and making USDC transfers free on Base. However, this momentum waned as the year progressed, with regulatory concerns over centralized exchanges potentially influencing Base’s growth.
Challenges and opportunities ahead
According to industry analyst Mercado, Base’s growth faced hurdles due to its nascent DeFi sector, which currently holds under $450 million in total value locked (TVL). This is significantly lower than competitors like Arbitrum, boasting a TVL exceeding $3.5 billion. Additionally, the resurgence of low-cost layer-1 solutions like Solana, offering established ecosystems, diverted potential users away from Base.
Despite these challenges, Base’s potential remains significant heading into 2024. Its performance in the NFT sector, notably outpacing other chains in sales transactions during several months of 2023, highlights its strengths. The anticipated integrations with Optimism, involving shared sequencing and seamless bridging, are expected to bolster Base’s activities in the upcoming year.
Looking ahead
Base’s journey reflects blockchain technology’s dynamic and competitive nature and user adoption trends. While its initial year may not have matched the growth of some competitors, the foundation laid and the potential for future integrations and developments suggest a path of steady growth and adaptation. This year will be crucial in determining how Base leverages its early successes and overcomes its challenges to become a significant player in the blockchain arena.
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