Base’s TVL Surges Exponentially as Memecoin Frenzy Takes Over
Over the weekend, Base’s total value locked (TVL) climbed by over 3,000 percent, from $2.2 million on Sunday to $78.2 million on Monday. Despite being under construction, Ethereum’s scaling network Base got into the top ten layer 2 solutions. The sudden surge in the TVL is likely due to a new memecoin frenzy on the layer 2 solution.
Base TVL Up Exponentially
Since its inception, Ethereum has had to tackle network congestion problems, often resulting in prohibitive transaction fees unsuited for mass adoption. After all, data bandwidth for any computer network, blockchain or not, is inherently limited.
Ethereum developers pushed for a rich scaling network ecosystem as roads unload traffic from Ethereum’s mainnet highway. Each layer 2 (L2) has its technique to increase transaction throughput while providing lower fees. Until late 2022, Optimism was the most popular but was overtaken by Arbitrum One in the first half of 2023.
Base is the latest L2 newcomer launched by Coinbase in February, still having under 1% Ethereum scaling market share. As another Optimistic rollup, Base surged tremendously within a day, earning 10th rank, above Polygon’s zkEVM.
At $78.2 million TVL, Base is closing in on Loopring, previously picked by GameStop to power its NFT marketplace.
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Bald Boosting Base
Since Elon Musk popularized Dogecoin (DOGE), memecoins have become tokenized gambling. The pattern is always the same:
- Social media frenzy drastically increases a meme token’s price.
- This initial boost creates a FOMO effect, fear of missing out.
- Not knowing where the top or the bottom will hit, most investors hold the bag, as insider/lucky investors ‘pull the rug’ at the top.
The same process is still unfolding with Bald (BALD), having started on Sunday. As a homage to Brian Armstrong, CEO of Coinbase, Bald memecoin surged over 300% on Monday.
Bald’s valuation frenzy is all the more impressive given that, unlike Pepe, it has no discernable origin – website, utility, or narrative outside of being themed after Brian Armstrong. Nonetheless, Bald embodies tokenized gambling, with some investors gaining $1 million from a tiny $1,000 investment.
When news of astronomic gains spreads, this further boosts the FOMO effect. This means that copycat memecoins also benefit, as it happened with BASED. BOLD and BASED have been tradeable on LeetSwap decentralized exchange (DEX).
This DEX prides itself on being “the #1 DEX for leet degens”, wherein “degens” is a derogatory reference for speculative (degenerate) traders, while “leet” is derivative of elite, used initially to obfuscate online activities within the leetspeak hacker subculture.
In addition to supporting Polygon zkEVM, LeetSwap is also live on Base, resulting in its massive TVL boost via BOLD and BASED speculative meme mania.
Ethereum Scaling is Still a Work in Progress
When Coinbase launched the Base testnet in late February, it opted for an open-source approach to make dApps easier, cheaper, and safer. This means building with the Optimism (OP) stack, the original Ethereum scaling solution under the MIT permissive license.
Using Optimistic rollups, Base batches transactions off-chain only to submit them back to Ethereum mainnet as a single transaction. This compression then alleviates Ethereum’s congestion and lowers gas fees. However, as the name implies, these rollups assume that every transaction in a batch is valid.
Although fully compatible with Ethereum smart contracts, the drawback of this approach is that one has to wait for one week before withdrawing funds. This is when rollup sequencers publish fraud proofs to the Ethereum mainnet, rolling back invalid transactions.
Not only is Base still in development but Optimism as well. This includes the hot-button issue of defending against front-running attacks. Optimism plans to decentralize rollup sequencers, but it remains unclear how that will affect the front-running frequency.
Other scaling solutions, from zkSync and Loopring to Arbitrum One, are also work in progress, regularly unrolling upgrades. Suffice it to say, in a half-finished state, this is the domain of degens, just as it was in the DeFi summer of 2020.
Do you think tokenized gambling via memecoins is more reliable than classic gambling? Let us know in the comments below.