There have been reports recently claiming Base Network’s total value locked (TVL) has surged by 25%. But is it actually the case?
The community has been attentive to the developments in the Coinbase’s Base Network. The Layer 2 solution has ambitions of onboarding the next billion users to the Web3 ecosystem.
Reason Behind Rapid Surge in Base TVL
The screenshot below shows that the Base TVL has increased by 24.73%, and it currently around $555 million. However, this picture doesn’t tell the complete story.
After the launch of the mainnet on Aug. 9, the USDC stablecoin remained unavailable natively for users. The bridged version, USDbC, enabled the bridging of USDC stablecoin from the Ethereum network to the Base network.
Read more: How To Use Arbitrum Bridge To Bridge Ethereum Tokens.
Finally, on Sept. 5, Coinbase announced that natively minted USDC tokens would be available on the Base Network. Hence, the surge in the Base network TVL has been due to the re-minting of the native USDC stablecoin.
The TVL breakdown shows that there was a 467.42% increase in the natively minted tokens on the Base Network.
In fact, on Sept. 29, the TVL on the Base network dropped by 16.92% due to the burning of bridged USDC tokens. During that time, Wu Blockchain reported:
“According to L2Beat data, Base Network TVL fell 16.92% to $445 million in the past seven days, and was overtaken by zkSync Era ($477 million) again. Mainly due to the large-scale burning of Base USDC on Sept. 29, the amount dropped from 160 million to 29.84 million in one day.”
The screenshot below clearly shows that there was a sharp dip in the Base TVL during late September due to the burning of USDC tokens. However, the re-minting of USDC covered the dip.
While the Base network TVL has increased by 25% in the past 7 days, on zooming out, the chart shows that the TVL is nearly equivalent to the previous levels.
Since its launch, users have been flocking to the Base ecosystem. SocialFi projects such as Friend.Tech has acted as a catalyst to increase the on-chain activity of the network. On Aug.11, Coinbase’s Base Network recorded over 136,000 daily active users.
Read more: How To Monetize Your Social Media Influence On Friend.tech
But on the downside, the project experienced its first outage on Sept. 5, which lasted nearly 43 minutes.
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