DailySun
As highlighted by the blockchain analytics company Nansen, Base, the layer-2 network created by Coinbase, is set to play a pivotal role in the decentralized finance and consumer applications sector beginning in the second quarter.
Nansen’s latest report points out crucial elements, including on-chain activity, robust metrics, and a growing user base, as signs that Base could witness significant growth in Q2.
This indicates that the L2 is on track to reinforce its status as a vital DeFi platform. Additionally, as it leads the charge for the next phase of consumer applications, the favorable landscape anticipated for the upcoming quarter underscores projects and tokens within the ecosystem, like Virtuals Protocol (VIRTUAL) and Aerodrome Finance (AERO).
Key factors driving Base in Q2, which are likely to enhance its total value locked, include the rollout of new app-chains, the U.S. Securities and Exchange Commission’s decision to withdraw its lawsuit against Coinbase, and an increasingly supportive pro-crypto atmosphere.
Nansen noted in its report, “Base is Coinbase’s direct investment in an onchain future, and considering Coinbase’s expansive network effects and scale, we believe Base is strategically positioned.”
The interplay of these catalysts and strong on-chain performance across traditional metrics like TVL, stablecoin velocity, and daily active users indicates a favorable outlook for Base. These indicators represent developer involvement, strategic initiatives, and funding, building a compelling case for Base’s growth.
Nansen’s analysts view this “State of the Chain” as a unique advantage for Base when compared to other layer-2 solutions.
Upcoming Developments
Among the significant advancements that enhance Base’s growth potential are Flashblocks, which are currently operational on the testnet and are expected to launch on the mainnet in Q2, along with Base appchains and smart wallet sub-accounts anticipated for release in the same quarter.
While Base does not currently have a native token, analysts propose that memecoins and AI-linked tokens could serve as likely avenues for exposure to the L2.
Projects like VIRTUAL, AERO, and others offer promising entry points based on their current trends. Important narratives to keep an eye on include DeFi meta, gaming, SocialFi, and payment systems. Notably, listings on Coinbase and an expansion into Solana represent significant milestones for the ecosystem, alongside Bitcoin (BTC) performance.
“With BTC currently trading within a range, we’re not rushing to make altcoin trades, but it’s important to prepare for a potential breakout. If momentum changes, Base-native assets could experience significant outperformance,” commented the analysts.
