Compound, a major player in decentralized finance (DeFi), has announced its integration with the newly launched Ethereum Layer 2 solution, Base. Users of the Compound platform can now access USDbC on Base, as per the company tweet on Monday.
This integration allows both ETH and cbETH to serve as collateral, enabling users to borrow bridged USDC on Base.
The Growth of USDC on Base
The integration follows comments made by Circle CEO, Jeremy Allaire, highlighting the global appeal of USDC. Allaire noted, “Contrary to popular belief centering on the US, we estimate around 70% of USDC stablecoin adoption comes from outside the United States.”
The freshly minted USDbC on Base currently boasts a total collateral amounting to $3.76 million. The dashboard notes a total borrowings value of $2.25 million. For lenders on the platform, the annual percentage rate (APR) stands at 1.24%, while borrowers face an APR of 2.83%.
The timing of Compound’s announcement coincides with Onchain Summer, a prominent event for Base, largely catering to the NFT market.
Base, the new Ethereum Layer 2, developed with the backing of Coinbase and constructed on the open-source OP Stack, was officially launched on August 9. Since its launch, Base has rapidly become a leading Ethereum Virtual Machine (EVM) chain, especially for NFT transfers.
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Data from Dune indicates a massive engagement, with Base users having bridged a total value of $216 million. Moreover, between August 10 and 14, Base witnessed over 100,000 active users daily.
SushiSwap to Debut on Base
In a related development, Jared Grey, the chief at the decentralized exchange SushiSwap, confirmed via a tweet that SushiSwap V2 will soon debut on Base.
The tweet read:
“V2 is coming to @BuildOnBase, supporting all the teams requesting it. Official comms from the @SushiSwap account this week.”
Despite the potential surrounding Layer 2 solutions like Base, there are reservations in the crypto community. Ethereum’s co-founder, Vitalik Buterin, has expressed concerns about decentralizing Layer-2 scaling networks, suggesting they possess ‘backdoors,’ which could pave the way for regulatory interference.
BeinCrypto also weighed in, highlighting the centralized nature of solutions like Base, especially given Coinbase’s overarching control. However, the claims of decentralization from platforms with significant corporate or VC backing will have to be looked at on a platform-to-platform basis.
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