Base, the Ethereum layer-2 network developed by Coinbase, has seen a sharp increase in activity, with daily active addresses surpassing 2 million. This spike is largely attributed to two major developments: the launch of Coinbase’s Wrapped Bitcoin (cbBTC) and the introduction of the Base Name Service (BNS).
Significant Growth in Base Activity
On-chain data from analytics platform IntoTheBlock reveals that the recent rise in daily active addresses on Base is closely linked to the launch of cbBTC. Coinbase introduced Wrapped Bitcoin on September 12, following its integration of the Lightning Network for quicker Bitcoin transactions. This wrapped token, backed 1:1 by Bitcoin, allows users to access a range of decentralized finance (DeFi) applications and protocols on both Base and Ethereum.
In less than two weeks, cbBTC has attracted over 3,500 users, with an average daily volume of $472 million in Bitcoin transactions on Base. Although cbBTC has played a crucial role in increasing activity, the Base Name Service (BNS) has had an even larger impact.
The Influence of Base Name Service (BNS)
Coinbase launched the Base Name Service (BNS) on August 21, providing users the option to register easy-to-read names for their addresses, similar to Ethereum’s ENS. This feature allows for a more streamlined on-chain identity experience within the Base network.
Within three days of BNS’s release, daily active addresses on Base hit a record 1.05 million. One month later, that number has more than doubled, surpassing 2 million. The fast adoption of BNS highlights its role in making the Base network more user-friendly and appealing.
Base Leading Ethereum Layer-2 Networks
Data from Ethereum layer-2 analytics platform GrowThePie shows that Base now holds 70% of all active addresses on Ethereum-based layer-2 networks. This places it well ahead of competitors like Arbitrum, which currently accounts for 9.6%. Base overtook Arbitrum in late June and has maintained its lead since. In the past week alone, Base reported over 6.8 million active addresses, while Arbitrum saw fewer than 943,000.
Criticism of cbBTC
Despite cbBTC’s contribution to Base’s growth, the wrapped Bitcoin token has drawn some criticism. The crypto community has expressed concerns over Coinbase’s transparency regarding its Bitcoin reserves, as well as the terms of the cbBTC user agreement, which suggests that users may not be fully reimbursed in cases of loss due to malicious events or unforeseen circumstances.
Conclusion
The recent surge in daily active addresses on Base is driven by innovative features like cbBTC and the user-friendly Base Name Service. As Base continues to lead in activity among Ethereum-based layer-2 networks, its growth is notable. However, addressing concerns around transparency and user protection will be key to maintaining trust and sustaining this growth.
