- Base Network’s TVL plunged over 18% within a week, with its value currently at $437 million.
- The considerable decrease is primarily due to the massive burning of Base USDC on September 29.
The Ripple Effect of USDC Burn
Once celebrated for its meteoric rise, even momentarily overshadowing Ethereum’s mainnet, Base Network has recently faced challenges. Developed atop the Ethereum blockchain and leveraging the Optimistic Rollup technology, Base Network has carved a niche for itself, primarily because of its integration of OP Stack tech. This innovative approach makes it an enticing alternative within the growing blockchain ecosystem.
Unpacking the TVL Decline
Data sourced from L2Beat highlighted a stark reduction in Base Network’s TVL (Total Value Locked), which slumped by a significant 18.28% to $437 million over the past week. The primary catalyst behind this decline seems to be the extensive burning of Base USDC on September 29. This dramatic drop is evident when you analyze the numbers from Dune Analytics, which indicate that the value sharply descended from an impressive 160 million to a mere 29.84 million in a single day.
To offer some context, USDC, a type of stablecoin, witnessed its launch by fintech enterprise Circle just last month. For those new to the term, stablecoins like USDC are digital currencies whose value remains consistent, typically pegged to a traditional currency like the US dollar.
This downturn in Base’s TVL propelled Matter Labs’ zkSync Era – a solution powered by zero-knowledge (zk) rollup technology – to the fore, with its TVL reaching $476 million. This shift caused Base to slide down, now occupying the fourth spot. Interestingly, while Base grappled with this setback, its peers in the layer-2 ecosystem flourished. Among the leading five rollups, Base remains the only one with a downturn in its TVL. In contrast, platforms like Arbitrum One and OP Mainnet experienced growths of 10.12% and 8.29%, boasting TVLs of $6.17 billion and $2.80 billion, respectively. Additionally, zkSync Era’s TVL surged by over 15% during the same timeframe.
However, it’s crucial to recognize Base Network’s potential and resilience. Despite recent challenges, the platform remains a formidable force in the layer-2 blockchain landscape. Since its launch, it has successfully bridged a substantial sum, surpassing $459 million.