It’s still a big bull market for Base. But that hasn’t exactly led to big profits yet.
Ethereum layer 2 is setting new records for the number of transactions and unique active addresses every day – currently recording more than four million transactions per day from more than a million unique addresses.
Both metrics can easily be improved by Sybil bots and the like, but in any case, volumes on Base DEXs Aerodrome and Uniswap remain stable, while some others on other blockchains have dropped.
The blue line in the chart below shows the weekly number of trades for Base. The orange shows the combined count for rival networks Arbitrum, Optimism and ZKSync.
Note that Base really kicked into gear after Ethereum blobs were introduced in March with the Dencun hard fork.
Blobs gave layer 2s like Base their own specialized compensation market, so they would no longer compete with regular users for block space. This change has reduced average L2 fees to fractions of a cent and made ETH an inflationary asset once again.
The blue line goes up, the orange line goes down
None of that has led to more profits for Base’s operator, Coinbase, despite record high usage.
According to data from Blockworks Research, Base generated an average weekly profit of $5.6 million in the four weeks after the blobs were activated in March.
Over the past four weeks, Base has averaged almost €407,000 in weekly profits – a drop of over 90%.
(The gains for Base, in addition to Arbitrum, Optimism and ZKSync, can be seen in the chart by the columns in the background.)
The calculation based on Base’s weekly transaction counts shows that onchain activity increased by more than 80% during the same period.
Who knows if all these transactions would have happened on Base (or elsewhere) if fees hadn’t been reduced so much. It may also be that the low costs have made running a Layer-2 much less lucrative, especially for companies that focus solely on the network itself.
Yet every profit is of course a profit. Blobs have made Base’s operating costs virtually insignificant: putting data on the Ethereum mainnet cost Base less than $11,000 last month, compared to $3.8 million in February.
In terms of scale, the Coinbase company made a total of $36.15 million in profits in the second quarter of this year.
Base, by the way, has raked in a profit of $53.63 million for Coinbase since it came online last June, which averages out to $11.5 million per quarter.
Not shabby at all, even with blobs.
An edited version of this article first appeared in the daily Empire newsletter. Subscribe here so you don’t miss tomorrow’s edition.