Base Ecosystem Update

Introduction

Base has positioned itself as one of the primary Ethereum Layer 2 ecosystems in just a year and half post launch. In the last quarter, the ecosystem has seen strong inflows, indicating that it may emerge as the primary EVM compatible chain in 2025. 

Although Base is a young ecosystem when compared to other leading L2s such as Arbitrum and Optimism, this rapid growth shows that Coinbase’s distribution advantage is real. With regulatory clarity likely coming in the next year, coupled with the 9.5 million monthly active users that Coinbase is funneling to Base through the Coinbase wallet, it is reasonable to assume this growth will not only continue, but accelerate.

This report will review the market leading protocols across various relevant sectors: DEXs, Lending, Perpetual Futures, and AI. Amongst DEXs, we remain constructive on Aerodrome as the dominant exchange on Base, reaching new all time highs in volumes every week. Morpho and Moonwell are the most interesting bets in the lending ecosystem, as each has the potential to become the dominant Base-native money market. Amongst perpetual futures exchanges, BSX Exchange and Avantis are the most interesting as they are backed by Coinbase via the Base Ecosystem Fund, and are rapidly capturing market share. 

Base Ecosystem KPIs

Market share over competing chains continues to grow across key KPIs such as revenue, transaction count, total value locked (TVL), and stablecoin market cap. With respect to network real economic value (REV), Base has significantly outpaced other L2s such as Arbitrum and Optimism.