- Base has climbed to become the fifth largest blockchain platform.
- Surpassing Tron, it now boasts over $6.6 billion in total locked value (TVL).
Coinbase’s Base blockchain is rapidly ascending in the DeFi landscape, securing its position as the fifth largest.
The decentralized finance (DeFi) ecosystem built on the Base network has seen a significant influx of capital, exceeding $6.6 billion according to data from DefiLlama. This surge has propelled Base beyond its competitor, Tron, in terms of deposits.
Total Value Locked (TVL), representing deposits in DeFi protocols, is a crucial metric for assessing the strength and capital-attracting ability of a blockchain’s DeFi ecosystem. It serves as a benchmark for comparing performance among different blockchain platforms.
A representative from Morpho, a leading DeFi lending platform on Base with over $2.5 billion in deposits, commented to DL News, “Base is effectively fostering the growth of its native lending and borrowing platforms.”
The spokesperson highlighted Morpho’s integration with Coinbase, enabling users to borrow stablecoins using Bitcoin as collateral, as a key factor driving deposit growth. This integration has contributed $1 billion to Morpho’s TVL on Base.
This growth exemplifies how Coinbase is capitalizing on the positive momentum within the cryptocurrency markets this year.
Analysts at Bernstein project that the US-based crypto exchange is poised to further leverage the crypto rally, potentially boosting its stock price by 60% to $510 in the short term.
DeFi Lending Sees Substantial Growth
Morpho, alongside Aave, the second-largest lending protocol on Base, collectively account for over 60% of the platform’s total DeFi deposits.
This trend mirrors the broader surge in DeFi lending witnessed across the entire DeFi ecosystem since the beginning of the year.
DeFi participants have allocated approximately $73 billion to lending protocols, marking a 52% increase since January, according to data provided by DefiLlama.
Base operates as a layer-2 blockchain, built upon the Ethereum network. Coinbase launched Base in 2023 through a collaboration with Optimism, another Ethereum layer-2 solution.
A Coinbase representative informed DL News that the company prioritizes offering fast and cost-effective transactions to attract a wider user base.
Harnessing Network Effects
Tron, the blockchain created in 2017 by Justin Sun, is also benefiting from increased DeFi lending activity. Its leading DeFi lending platform, JustLend, reports approximately $5.2 billion in deposits, exceeding the combined figures of Morpho and Aave on Base.
While Base has surpassed Tron in DeFi deposits, it’s important to note that Tron maintains a lead in other areas, such as stablecoin trading volume.
Tron DAO, the organization supporting the Tron blockchain, has not yet responded to requests for comment.
The substantial deposit difference is primarily attributed to Base’s numerous smaller, emerging projects within its ecosystem.
Mehdi Lebbar, co-founder of YO Protocol, a yield aggregator holding $73 million in deposits, emphasized to DL News that Base’s swift growth is fueled by strong network effects.
Lebbar explained that “Coinbase’s extensive user base provides a solid foundation for a thriving marketplace,” citing this as the reason YO Protocol chose to launch on Base over numerous competing blockchain platforms.
Coinbase is actively directing users to Base through a dedicated mobile app, a rebranded version of the Coinbase wallet.
The spokesperson from Morpho indicated that the launch of the Base app in July significantly boosted transaction volume on their platform.
The strategy of centralized exchanges launching their own blockchains is becoming increasingly common, with Coinbase not being the sole example.
Binance, the world’s largest crypto exchange, launched BNB Chain (formerly known as Binance Chain) in 2017. Currently, it stands as the third-largest blockchain in terms of DeFi deposits, holding $9.3 billion in total value locked, according to DefiLlama.
Crypto exchange rival Crypto.com launched its own blockchain, Cronos, in 2021, and it currently ranks as the 16th largest blockchain with approximately $643 million in deposits.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.