Base, the Ethereum Layer-2 network incubated by Coinbase, has seen its total value locked (TVL) fall by $1.4 billion in the past few weeks.
The decline comes as public debate over the chain’s strategy and product direction intensifies.
Base TVL Slides as Builders, Critics, & Coinbase Leadership Clash Over the Chain’s Direction
Base TVL has dropped from about $5.3 billion in January to roughly $3.9 billion as of this writing.
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The drop matters because TVL remains one of the most closely watched indicators of capital activity and developer confidence in blockchain ecosystems.
However, TVL fluctuations are common across L2 networks, particularly during broader market rotations or liquidity shifts.
As liquidity tightens, Base is also facing unusually open criticism (and responses) from founders, investors, and Coinbase leadership.
Base creator Jesse Pollak framed the moment as part of a typical growth cycle for fast-scaling ecosystems.
“Base went from not existing to one of the most important chains in the world in two years, which happened because of the builders. And as with all fast growth, along the way, some left, some pivoted, some gave up. The builders who remain are the ones who define the next era,” Pollak wrote.
His comments reflect a view held by many infrastructure teams: that early surges often attract speculative capital and short-term projects, followed by periods of consolidation before the next phase of development.
Sponsored SponsoredCritics Argue Base Lost Focus
Some founders and investors say Base’s recent challenges are strategic rather than cyclical. A builder and Coinbase shareholder known as Hish on X publicly criticized the rollout of the Base App, arguing it was marketed as a “super app” but delivered features users did not request.
Investor Mike Dudas echoed similar concerns, saying Coinbase Wallet had previously been positioned as a broad on-chain hub, only to have its priorities shifted by strategic pivots.
Coinbase Leadership Acknowledges Missteps
Coinbase CEO Brian Armstrong responded directly to criticism and accepted responsibility for earlier decisions.
Sponsored“I’ll take ownership of that if you want to fire someone,” Armstrong wrote, adding that the Base App is now focused on being “the self-custodial version of Coinbase, and trading focused.”
He emphasized that self-custody is becoming increasingly important as more financial activity moves on-chain. However, the Coinbase executive also articulated that most company resources remain directed toward the main retail platform.
In separate remarks about Coinbase’s broader strategy, Armstrong also noted rising institutional engagement with crypto and highlighted growth in:
- Trading volumes
- Assets on the platform, and
- Product revenue streams,
According to Armstrong, the company remains well-positioned as the financial system grows.
Debate Expands to Ecosystem Design
The discussion has extended beyond immediate product changes to larger questions about how crypto ecosystems grow.
Sponsored SponsoredUniswap founder Hayden Adams suggested that combining managed accounts and self-custody into a unified interface could improve usability. His remarks reflect ongoing industry efforts to simplify onboarding without sacrificing decentralization.
At the same time, some community commentators argue that Base must strengthen incentives and culture to retain developers and users.
Meanwhile, others counter that long-term adoption depends more on infrastructure, compliance, and institutional partnerships.
If Base can translate its infrastructure advantages and Coinbase distribution into sustained user growth, the current pullback may prove temporary.
If not, competition among Layer-2 ecosystems is likely to intensify as liquidity and developer attention remain highly mobile.
