The US-based giant cryptocurrency exchange Coinbase‘s Ethereum (ETH) Layer 2 network Base has seen a significant increase in the total value locked (TVL) on the network. User deposits on the network have nearly doubled, reaching almost 1 billion dollars, and data shows that the lion’s share of the TVL comes from the decentralized cryptocurrency exchange Aerodrome (Aero).
The Rise of Aerodrome and Aero Token
According to data from DeFiLlama, Base’s TVL, which is close to 1 billion dollars at 970 million dollars, is largely contributed by the decentralized cryptocurrency exchange Aerodrome, with a TVL of 424 million dollars, which constitutes about half of the total TVL on the network.
The decentralized cryptocurrency exchange Aerodrome, operating on Base, has achieved significant growth by constituting nearly half of Base’s TVL. Its TVL, which was 125 million dollars at the beginning of February, has risen above 420 million dollars due to increased user activity and a significant increase in the value of Aerodrome’s native asset, the Aero token.
The development team behind Aerodrome, Velodrome Finance, introduced the decentralized exchange as a forked version on Base in September 2023. Aerodrome’s goal is to increase on-chain liquidity on Base and facilitate a significant portion of the swaps on the network using decentralized finance (DeFi) incentives and governance by voting, similar to its strategy with Velodrome on the OP Mainnet.
The Impact of Ethereum’s Dencun Update
As is known, Base’s mainnet was launched to the public at the beginning of August 2023 and became the fourth most valuable Layer 2 network in terms of TVL, surpassing networks like Arbitrum (ARB), Optimism (OP), and Blast. Following the significant Dencun update for Ethereum’s Layer 2 networks, there was a sudden increase in daily users and transactions on the network, reaching record levels.
The increase in TVL and user activity on Base reflects the growing demand for Layer 2 solutions in the Ethereum ecosystem, which offer scalability and lower transaction fees compared to the Ethereum mainnet.
With the support of the cryptocurrency exchange Coinbase and the success of projects like Aerodrome, Base continues to strengthen its position as a significant player in the Layer 2 space by offering users efficient and cost-effective decentralized exchange services.
