Base, the Ethereum layer-2 protocol developed by popular crypto exchange Coinbase, has experienced a significant surge in activities recently, leading to a notable increase in its daily active addresses.
The rise in Base’s daily active addresses has been attributed to the launch of Coinbase Wrapped Bitcoin (cbBTC) and the introduction of the Base Name Service (BNS), according to data from the on-chain analytics platform IntoTheBlock.
Coinbase introduced cbBTC on Base and Ethereum on September 12, following the integration of the Lightning Network for bitcoin transfers on the protocol. This wrapped token is backed 1:1 by BTC and is held by the exchange, providing users with access to various decentralized finance (DeFi) applications and features. In just under two weeks since its launch, cbBTC has attracted over 3,500 users, with an average of $472 million in BTC settled on Base daily.
While cbBTC has played a significant role in the growth of Base’s daily active addresses, the excitement surrounding BNS has had an even greater impact. Coinbase launched the Basenames service on August 21, allowing users to establish their identity on the network by registering human-readable names for their addresses. Similar to the Ethereum Name Service (ENS), BNS offers a unified name service and on-chain identity experience for all users on Base.
Just three days after the introduction of Basenames, the number of daily active addresses on Base soared to a record 1.05 million. This figure has since doubled and surpassed two million within a month. Data from the Ethereum layer-2 analytics platform GrowThePie reveals that Base now accounts for 70% of the active addresses among layer-2 networks based on Ethereum, with Arbitrum following at 9.6%. Base overtook Arbitrum in late June and has maintained its lead ever since, with over 6.8 million active addresses in the past week compared to Arbitrum’s less than 943,000 addresses.
Despite the growth of Base and the success of cbBTC, there have been criticisms within the crypto community. Concerns have been raised regarding Coinbase’s lack of transparency in its Bitcoin reserves and the user agreement for cbBTC, which suggests that the exchange may not fully reimburse users for BTC lost due to malicious activity or unforeseen events.
This exciting development within the Base protocol showcases the growing interest and adoption of layer-2 solutions in the Ethereum ecosystem. With innovative features like cbBTC and BNS, Base continues to attract users and solidify its position as a key player in the decentralized finance space.