The Rise of Base Meme Coin! Total Locked Value Exceeds $5 Billion
Base, the second-layer blockchain built by cryptocurrency exchange Coinbase, is one of the fastest-growing blockchains in 2024! Since the beginning of this year, Base has seen a 400% increase in weekly active users, with a total locked value (TVL) exceeding $5 billion.
The rapid rise of meme coins on the Base network is the main reason behind the surge in trading activity. At the start of 2024, Base’s daily trading volume ranged between $20 million and $50 million, but it has quickly risen to hundreds of millions of dollars per day. According to data from DEX Screener, meme coins have indeed taken the lead in trading on the decentralized exchange of Base.
Why are meme coins burning on Base?
Base is built on the Ethereum Layer 2 protocol and offers security, scalability, and decentralization. While Base and Ethereum have similar functionalities, Base has lower costs and faster speeds. Additionally, as Base is developed by the well-known and publicly listed cryptocurrency exchange Coinbase, it can directly integrate with Coinbase, making it convenient for developers to use existing Coinbase tools and resources.
Apart from its attractive technology, Coinbase, as a renowned and publicly listed company, already had a lot of investor support and trust. Being developed by the only publicly listed cryptocurrency exchange in the United States, Base also gives traders a sense of reliability.
Lastly, the recent trend of meme coins has caught people’s attention. Investors have also seen the potential of Base meme coins and have invested in them, hoping for high returns.
About 91% of meme coins have security vulnerabilities! What do experts think of the Base ecosystem risks?
According to Cointelegraph Magazine, approximately 91% of meme coins on Coinbase’s second-layer network, Base, have security vulnerabilities. The most common vulnerability on Base is when project creators suddenly disappear with the assets and abandon the project, also known as a “rug pull.” The main reason for the lack of security in these cases is likely due to the creators’ limited understanding of programming or the presence of malicious tokens.
Full-time trader Jing Yi (Mr. Wang) observes that there are frequent incidents of theft, intercepted transactions, and unlocked fund pools due to vulnerabilities in smart contracts of various projects on the Base chain. He warns that if meme coins want to continue capturing attention on the Base chain, these issues must be addressed to avoid the current hype from being short-lived. Jing Yi also admits that many of his full-time trader friends, who focus on early-stage projects with shallow whitepapers and token trading depth, prefer not to touch the Base chain and instead continue seeking opportunities on relatively safer chains like Solana.
Jing Yi analyzes that besides meme coins, Base has the potential to develop projects that integrate with the Coinbase exchange ecosystem, such as Goldfinch, which focuses on real-world asset tokenization (RWA). Base can assist in reviewing and custodizing related matters, ensuring the compliance and security of these projects, further increasing investors’ trust and participation in the ecosystem.
In addition, aside from the fraud risks, Andrew Forte, the Director of Business Development at blockchain solutions company Dappd, is optimistic about Base because Coinbase is launching a native smart contract wallet that will allow Coinbase’s 100 million registered users to trade on Base without the need to remember mnemonics or private keys.
In other words, Base already has a huge potential user base and offers a more convenient way of participating, further expanding its influence and attractiveness in the cryptocurrency market.
Sources:
NFTgators, Cryptonews, Dexscreener
Proofread by: Gao Jingyuan