Is there a connection between the USDC burn and a decrease in the Total Value Locked (TVL) of Base Network, a blockchain incubated by Coinbase? This question has been on the minds of many, especially after the recent events that unfolded in the cryptocurrency space. The answer is a resounding yes, and here’s why.
The Rise and Fall of Base Network’s TVL
Base Network, a layer-2 blockchain developed on the Ethereum network using Optimistic Rollup technology, has been a shining star in the cryptocurrency ecosystem. Its use of the popular OP Stack tech has significantly contributed to its appeal, with the platform witnessing a dramatic surge that briefly eclipsed the Ethereum mainnet.
However, Base Network’s TVL experienced a significant dip over the past week. Data from L2Beat reveals that the TVL locked in Base Network dropped by over 18.28%, coming down to $437 million within seven days. This reduction in Base’s TVL can largely be traced back to the extensive burning of Base USDC on September 29.
USDC Burn and Its Implications
According to data from Dune Analytics, the amount of Base USDC fell drastically from a high of 160 million to a mere 29.84 million in a single day. This followed the announcement by Circle, a fintech firm and stablecoin issuer, about the launch of USDC earlier last month. Consequently, Matter Labs’ zkSync Era, a scaling solution powered by zero-knowledge (zk) rollup tech, with a TVL of $476 million, surpassed Base Network, which now ranks fourth.
Interestingly, among the top five rollups, Base is the only project in the red, while Arbitrum One and OP Mainnet saw an increase of 10.12% and 8.29% respectively, with TVLs of $6.17 billion and $2.80 billion.
The Future of Base Network
Despite the drop in TVL, Base Network continues to be a formidable player in the field. Since its inception, the network has bridged over $459 million. This resilience is a testament to Base Network’s potential and the faith investors have in the platform.
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