Base’s Rise in the Crypto Market: A Look at its Profitable Journey and Competition from OKX’s X Layer

Base, Coinbase’s Layer-2 network, has been making waves in the crypto market with its recent surge in total value locked (TVL), surpassing $4 billion for the first time. This milestone has not only solidified Base’s position in the market but has also significantly contributed to Coinbase’s profits, with an estimated $26 million in net profit since its launch in July 2023.

The growth of Base can be attributed to its robust transaction volumes and fees, driven by project listings and high demand. In fact, transactions on Base accounted for over 60% of all Ethereum activity in Q3 2023, showcasing its increasing popularity among users.

According to a coinShares report, the surge in gas fees on Base, due to high demand, has resulted in strong earnings for Coinbase, with 85% of the profits going to Coinbase and 15% to competitor Optimism. This success has positioned Base as a formidable player in the Layer-2 space, challenging competitors like Arbitrum and Optimism.

Looking ahead, Coinbase plans to enhance the Base platform by allowing users to store their USDC balance within the network, aiming to improve efficiency, security, and reduce fees and settlement times.

However, Coinbase now faces new competition from OKX, which recently launched its own Ethereum-based Layer-2 scaling network, X Layer. X Layer, built using Polygon’s CDK and incorporating zero-knowledge proofs, offers users faster and more cost-effective transactions compared to Ethereum’s mainnet, adding further dynamism to the Layer-2 ecosystem.

Despite the competition, Base remains a strong player in the market, currently ranked third in terms of total value locked (TVL) according to data from L2Beat. With $5.29 billion in TVL and 14.17% of the market share, Base continues to be a key player in the evolving Layer-2 landscape.