The Layer 2 Ethereum network known as Base, developed by Coinbase, has recently reached a major milestone by surpassing $2 billion in total value locked (TVL). This achievement solidifies Base's position as the second-largest optimistic rollup platform in terms of deposits, trailing only behind Arbitrum.
According to data from DeFiLlama, Base's TVL has surged to $2.08 billion, marking an impressive 370% growth since the beginning of the year when it stood at around $430 million. Base, which was launched in August 2023, functions as an optimistic rollup solution by executing transactions off the Ethereum mainnet and subsequently posting relevant data on-chain periodically.
Base's Growth Driven by Aerodrome
A significant driver of Base's remarkable TVL growth is the decentralized exchange known as Aerodrome, which contributes over $1 billion to the total deposits on the platform. Additionally, Uniswap plays a pivotal role in Base's ecosystem by adding around $220 million in TVL.
Despite Arbitrum leading the optimistic rollup sector in terms of TVL, Base has excelled in user engagement metrics. Key indicators such as active addresses and daily transactions position Base as a frontrunner in the optimistic rollup space, as highlighted by data from The Block.
The resurgence of DeFi is becoming increasingly evident, with noteworthy growth observed in key metrics such as active loans and TVL compared to the lows experienced in 2023. Active loans in the DeFi sector have surged to approximately $13.3 billion, a substantial increase from previous levels.
DeFi lending, which enables crypto investors to offer their assets to borrowers in exchange for interest, serves as a vital gauge for assessing market participation and overall sector health. The recent resurgence in DeFi activity signals a positive trend for the overall market landscape.
Notably, DeFi's TVL experienced a significant decline last year, plummeting by 80% from its peak in November 2021 to roughly $37 billion by October 2023. However, the sector has experienced a remarkable recovery since then, with TVL now standing at approximately $96.5 billion, as reported by DeFiLlama.
Coinbase Pushes for Regulatory Clarity
In a recent development, Coinbase has made a compelling appeal to a federal appeals court in Philadelphia to urge the U.S. Securities and Exchange Commission (SEC) to establish clear regulatory guidelines for the cryptocurrency industry.
Coinbase's legal counsel, Eugene Scalia, emphasized that the SEC's lack of clarity in regulations has hindered the company's operations and compliance efforts. Scalia criticized the SEC's actions as being "arbitrary and capricious," pointing out the ongoing challenges faced by Coinbase in adhering to U.S. laws.
The ongoing legal battle between Coinbase and the SEC underscores the pressing need for regulatory clarity in the crypto space. Coinbase's pursuit for well-defined standards to determine the classification of cryptocurrencies as securities is emblematic of the broader industry's quest for regulatory transparency.
Despite facing regulatory hurdles, Coinbase recently achieved a partial victory in its legal battle against the SEC, which could potentially provide the exchange with crucial insights into the agency's classification of tokens as securities.
