Base's L2 Capital Game: "Capturing" Ethereum Liquidity with Triple Reinforcement of Resources, Technology, and Ecosystem
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Base's L2 Capital Game: "Capturing" Ethereum Liquidity with Triple Reinforcement of Resources, Technology, and Ecosystem
Base's growth is driven by the resource advantages of U.S. crypto giant Coinbase, continuous technological breakthroughs, and the booming ecosystem fueled by MEME and RWA trends.
Navigating Web3 tides with focused insightsAuthor: Nancy, PANews
L2s have shifted from early technical narratives to a battleground of ecosystem and capital. While most L2 projects are gradually exhausting their narrative-driven momentum, Base has recently seen a dual surge in funding inflows and attention. Behind Base's growth lies the resource advantage of U.S. crypto giant Coinbase, continuous technological breakthroughs, and a thriving ecosystem fueled by MEMEs and RWA.
Leading the market with $2.8 billion in inflows, Ethereum bleeding into Base
With strong capital inflows, Base is leading the L2 market, particularly as Ethereum’s ecosystem undergoes large-scale migration to this network.
According to Artemis data, Base has attracted substantial funds since the beginning of this year, ranking first with approximately $2.8 billion in net inflows—surpassing other blockchains and demonstrating strong market confidence in its ecosystem. Specifically, Ethereum is the largest source of Base’s inflows, contributing 70.9% (about $3.73 billion), reflecting a clear trend of users and capital shifting from Ethereum to Base. Other L2 networks such as Arbitrum, OP Mainnet, and Blast have also contributed to Base’s inflows.
In terms of capital preference, Base has already gained a significant edge in the L2 competition. This contrasts sharply with Arbitrum, which leads in TVL but has suffered a net outflow of $3.1 billion so far this year. zkSync Era, OP Mainnet, and Linea have also experienced varying degrees of capital outflows.
However, Base’s on-chain activity has shown signs of slowing down this year, largely due to the broader downturn in the crypto market. Artemis data shows that Base’s capital inflows declined from a peak of $1.1 billion in January to $830 million in February and further dropped to $310 million by mid-March. Meanwhile, the number of on-chain transactions plummeted from 330 million in January to 91.6 million in March—a decline of over 70%. Despite the drop in transaction volume, Base’s number of active addresses has rebounded this month. Over the past half-month, active addresses reached 1.2 million, matching the level seen throughout January. As a result, Base’s revenue has also declined, falling from a high of $15.5 million in January to $2.5 million in March.
Notably, the recent surge in smart contract deployments indicates that Base is attracting a growing number of projects and developers to build applications on-chain. According to Token Terminal, the number of smart contracts deployed on Base has reached an all-time high. Last week alone, 11.4 million smart contracts were deployed on this L2 network.
Riding Coinbase Momentum: Strengthening Competitiveness Through Tech Breakthroughs and Ecosystem Explosion
Currently, Base is accelerating its rise by leveraging three key advantages: support from Coinbase—the U.S.-based crypto powerhouse—technological innovation, and surging ecosystem activity.
Riding on favorable U.S. crypto policy developments, Coinbase—the creator behind Base—is encountering multiple new opportunities. In recent months, Coinbase has received several positive developments, including VIP treatment at the White House summit, SEC lawsuit dismissal, relaunching its tokenized stock COIN program, lifting restrictions on staking services, and even rumors suggesting it has become a viable target for acquisition by traditional exchanges. Base stands to benefit significantly from Coinbase’s enhanced brand and resources. (Read more: Coinbase Rides U.S. Regulatory Tailwinds: White House Summit VIP Status, Tokenized Stocks, Hiring Spree, and Merger Rumors)
At the same time, Base’s frequent technological advancements are laying a solid foundation for mass adoption. In February, Base announced several new technologies focused on improving transaction speed, scalability, and user experience—key factors to attract both developers and users. Flashblocks technology has been launched on the Base Sepolia testnet, reducing block confirmation time from 2 seconds to just 200 milliseconds, making it the fastest EVM chain. Base Appchains (L3 chains) will provide dedicated blockspace for high-traffic applications, enhancing scalability. Additionally, Base introduced Smart Wallet Sub Accounts to improve user experience by reducing transaction signing frequency and offering more secure account management. Base plans to roll out Flashblocks and Sub Accounts on mainnet in Q2. The following month, Base acquired the Iron Fish team to accelerate development of privacy-preserving technologies on its network.
Top MEMEs on Base Source: GMGN
Compared to steady progress in technology, ecosystem热度 (heat) has been the core driver behind Base’s recent surge in inflows. As Solana’s MEME market weakens, the recent popularity of $Cocoro and $DRB has boosted activity on Base. Cocoro was launched when the owner of DOGE’s original Shiba Inu dog KABOSU adopted a new rescue dog and partnered with Own The Doge to issue a namesake token on Base. Leveraging authentic IP and community sentiment, Cocoro quickly went viral. GMGN data shows the MEME coin’s market cap briefly exceeded $100 million, with first-day trading volume reaching as high as $130 million. DRB (DebtReliefBot) is an AI-powered MEME coin proposed by xAI’s Grok and issued by AI agent Bankr. GMGN data shows its market cap peaked near $42 million, with 27,000 holder addresses remaining. The rapid rise of these MEME coins has amplified Base’s appeal. Notably, Coinbase listing MEME tokens like DOGINME and TOSHI—originating on Base—with significant price gains has further increased the network’s attractiveness.
Meanwhile, tokenized U.S. equities represent another trending narrative. Jesse Pollak, a Base developer, recently revealed they are considering launching a tokenized version of Coinbase (COIN) stock for U.S. users on Base. Although still in the exploratory phase, real-world asset tokenization issuer Backed has already launched wbCOIN, a token pegged to Coinbase Global’s stock price and fully backed by actual shares. Exploring this use case not only expands Base’s application scenarios but also broadens its investor base.
To further strengthen ecosystem development, Coinbase Ventures teamed up with on-chain private investment platform Echo on March 13 to launch the Base Ecosystem Group, providing three forms of support for the Base ecosystem: offering developers broader access to funding and expertise, enabling Base community members to participate in early-stage startup investments, and accelerating capital flow through on-chain rails to advance open financial systems. Prior to this, the Base Ecosystem Fund had already invested in over 40 Base-based projects.
Overall, for Base to maintain long-term competitiveness in the L2 liquidity battle, it must continuously push forward across multiple dimensions: sustainable ecosystem growth, ongoing technical iteration, market adaptability, and improved user retention.
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