Home | Crypto News | Base Faces A Dip Amid Rising Stars in Ethereum’s L2 Landscape

Base Faces A Dip Amid Rising Stars in Ethereum’s L2 Landscape

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Base, a Layer 2 (L2) solution backed by Coinbase, finds itself navigating choppy waters as it faces a noticeable dip in user interaction, a contrast to its prolonged reign in the Ethereum L2 scaling milieu. This downturn reflects a slump in revenue and profit, painting a stark contrast against rising stars like zkSync and Arbitrum.

The shifting dynamics became evident when Base reported 74,850 unique daily active addresses on October 6, trailing behind zkSync’s impressive 235,510 and Arbitrum’s 155,070, according to data presented by Chris Burniske. This downturn is attributed in part to the ascent of Stars Arena, an Avalanche-based social interaction platform, casting a shadow over Friend.tech’s activities on the Base network.

Despite the remarkable count of active addresses, Arbitrum’s network growth left much to be desired. Boasting a mere 940 in network growth, indicating a tepid embrace by new users. Optimism mirrored this lukewarm reception, with network growth plummeting to 738, signifying a stagnation in user attraction.

zkSync, while leading in active addresses, did not translate this dominance to its Total Value Locked (TVL) – a critical metric underlining the aggregate value of assets committed to a decentralized application. A reduced TVL often signals growing skepticism around a protocol’s utility or security. zkSync’s TVL dipped to $120.47 million, a manifestation of inadequate liquidity attraction by chains like SyncSwap and Mute.io within the zkSync ecosystem.

In the midst of this, Base’s dip in active users did not significantly erode its cost-over-profit ratio. A Dune Analytics report revealed a weekly revenue of $155,532 against operational costs of $75,921, rendering a profit of $79,611. While profitable, these figures lack the vibrancy of previous weeks, highlighting a need for rejuvenated activity on the network to recapture its erstwhile glory.

This shift in user engagement underscores the fluid nature of the Ethereum L2 landscape, where user preferences and engagement are as dynamic as the innovative solutions birthed within this ecosystem. As Base grapples with this downturn, the onus lies in rekindling user engagement and network activity to reclaim its foothold amidst the thriving, competitive space of L2 solutions.

Jay Solano

Jay Solano

Jay is a crypto and NFT enthusiast dedicated to exploring the dynamic world of digital assets. As a crypto blog writer, he is sharing his knowledge of the latest trends, breakthroughs, and investment opportunities in the blockchain world.

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