- Base’s TVL has declined consistently in the past few weeks.
- The chain has seen a general drop in user activity.
Following a steady decline in its decentralized finance (DeFi) total value locked (TVL), Layer 2 (L2) blockchain Base has lost its spot among the top 10 chains by TVL, according to data from DefiLlama.
Source: DefiLlama
At press time, the L2’s TVL was $412 million, ranking as the 11th chain with the most DeFi TVL. So far this year, Base has witnessed a consistent fall in DeFi activity, resulting in a fall in its TVL.
For example, according to data from Artemis, the total volume of daily transactions executed through the decentralized exchanges (DEXes) housed within Base has plummeted by 28% since the 2nd of January.
For context, as of the 17th of January, Base’s DEX transaction volume totaled $23.34 million. On the 2nd of January, the network recorded a DEX volume of $33.21 million.
User activity on Base
Apart from the decline recorded in its DeFi vertical, the entire Base ecosystem has experienced a decrease in user activity, per data from Artemis.
Firstly, the daily count of unique wallet addresses sending on-chain transactions on the network has decreased by 19% since the 23rd of December.
As a result of the fall in user count, daily transactions completed during the same period have also dwindled. AMBCrypto found that this has dipped by 29% since the 23rd of December.
Source: Artemis
It is common knowledge that the increased adoption Base recorded after it launched in August 2023 was fueled by the activity on the decentralized social network friend.tech.
For the uninitiated, friend.tech lets users buy and sell tokenized shares of crypto personalities.
However, a severe decline in friend.tech’s usage has impacted Base’s network activity. According to data from Dune Analytics, the count of daily transactions on Base involving a friend.tech trade has fallen significantly since September 2023.
Source: Dune Analytics
Due to the dwindling hype surrounding the social network, the daily count of addresses buying the keys of other users has dropped by 99% since the 22nd of October 2023.
Source: Dune Analytics
As daily user and transaction count on Base fell, network fees and revenue also declined. AMBCrypto found that on the 1st of January, network fees on Base fell to a two-month low of $40,000.
Regarding network revenue, this has trended downward since the year began. As of the 17th of January, Base recorded a revenue of $7,000, dropping by 33% since the 1st of January, according to data from Artemis.
