Ethereum
Ethereum Layer-2 networks rake in millions, with grassroots leading the way
BaseThe Ethereum layer 2 scaling network launched by leading US cryptocurrency exchange Coinbase, generated over $6 million in on-chain profits in May, making it the most profitable while exceeding Blast And Optimism In the process.
Base’s profit rise was fueled by a rapid increase in total value locked (TVL), according to L2BEATin turn motivated by Ethereum’s implementation of EIP-4844 and proto-danksharding via the planned Dencun upgrade in March.
According to blockchain analysis platform GrowThePie, Base generated the highest on-chain profit of all Layer 2 chains with $6.1 million in May, followed by $1.5 million for Blast and $1.4 million for Optimism. Even though Base is well ahead of its competitors in the war for profitability, its monthly figure fell sharply after increase with Dencun upgrade in March.
On the other hand, Blast, the rising layer 2 network of the creators of the NFT market Get confusedwas recently recognized for its unique native yield for ETH and stablecoins, as well as projects like Pacmoon And Fantasy Top which distribute many incentives to users.
Blast share of all layer 2 profits rose from 5.3% in April to 15.2% in May. However, it remains far behind Base, which earned 56.8% of all Layer 2 profits last month.
On-chain profitability for Layer 2 networks refers to the balance between the costs of interacting with the Layer 1 network (Ethereum) and revenue generated through fees, token issuance, and other means. It does not include any off-chain spending and therefore should not be considered a complete picture of how these networks are managed from top to bottom.
A Dune Dashboard maintained by the channel’s pseudonymous analyst Kofi also put Base in the lead, but with a profit of just under $7 million in May. The discrepancy may be due to differences in how each data curator measures income and expenses. However, Dune’s dashboard excludes Blast data, so it’s an incomplete picture of how the major Layer 2s compare in this regard.
According to GrowThePie, Base has been the most profitable L2 every month since March 2024. Over the past three months, its TVL almost sixfoldfrom $1.3 billion to $7.6 billion, a historic summit for the chain. As Optimism’s TVL has remained roughly stable over the past month, Base could be on the verge of surpassing OP Mainnet.
Both Base and OP Mainnet are built on the OP stack and are part of the Optimism “superchain” ecosystem, although they are considered separate L2s within that ecosystem. In terms of TVL, Base still remains far behind industry leader Arbitrum, which has $19.1 billion in TVL.
Aside from the upgrades made possible by the Dencun fork, Base’s appeal within the crypto community has grown since Coinbase announced its new Smart Walletwhich is expected to improve the accessibility of on-chain transactions for new adopters.
Coinbase Smart Wallet will use account abstractiona way to facilitate on-chain transactions for those who are unfamiliar with the details of Challenge. Base also benefited from Coinbase’s profile and associated additional exposure, as well as promotional campaigns like the latest “On-Chain Summer” rewards campaign which started this week.
Edited by Andrew Hayward