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Base, Coinbase’s layer 2 network for Ethereum, has seen a significant increase in inflows to its blockchain this week. Nearly $20 million in ETH has been deposited into Base since Monday, nearly double what was recorded on Arbitrum and five times more than Optimism, its competitors in the scaling ecosystem.

According to data from the DeFi platform Llama, Base recorded an increase in the volume of daily contracts deployed. This indicates that blockchain is gaining relevance and popularity among users.

Competition between Ethereum layer 2 blockchains has intensified, with Base, Arbitrum and Optimism competing for transactions, volume transferred on-chain and inflow of ETH (Ethereum deposits on the blockchain).

Base receives ‘avalanche’ of Ethereum

The volume of daily contracts on a blockchain is an important metric to identify its relevance among developers and market participants. According to TokenTerminal, of the 14,700 daily contract developers as of Tuesday, 9,000 are deployed on Coinbase’s Ethereum scaling solution, Base.

The Base memecoin ecosystem has a market value exceeding $900 million, and several categories of tokens are being deployed on Coinbase layer 2.

However, according to analysts, layer 2 solutions may suffer from two recent events linked to the Ethereum ecosystem. The first of these is the reduction in fees for transacting on the main blockchain, which are already below US$1. This could attract users and developers back to Ethereum and thus impact the growth of layer 2.

Another point raised by analyzes is the disapproval of an Ethereum spot ETF by the US Securities and Exchange Commission and the classification of ETH as a security. This should remove much of the investment in ETH, cause a drop in price and reduce interest from Venture Capital companies.


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