The Memecoin Fever Spreads to Layer-2 Base

Base, the layer-2 blockchain platform built on Ethereum and developed by the major cryptocurrency exchange Coinbase, is facing significant challenges in handling the abnormally high traffic on its ecosystem.

Recently, the development team issued a warning that the inflow of activity on the Base Mainnet is increasing dramatically, leading to a surge in transaction fees. Some transactions have become stuck due to setting fees too low, while others cannot be canceled.

The explosion of new “memecoin” projects like normie (NORMIE), Briun Armstrong (BRIUN), and brett (BRETT) on Base is believed to be the primary cause of this congestion. Within just one week, the prices of these meme coins have surged fivefold, according to data reflected on DEXTools. The frenzy of memecoin activity has driven Base’s gas fees up to $5 per transaction, while the regular fees typically fluctuate below $1.

Base transactions now $5 >.

Base transactions now failing.

Is this the new Ethereum?

Come home to Solana. pic.twitter.com/mD9w2GMVX4

— Kaizen (@KAIZ3NS) March 20, 2024

Related: Coinbase Offers Freebies for Ethereum NFT Game Parallel

About Base and Its Current TVL

Layer-2 blockchain is a scaling solution designed to improve the performance and scalability of an underlying blockchain, like Ethereum, by processing transactions and smart contracts offline or in a more efficient manner. Popular solutions include state channels, sidechains, optimistic rollups, and zero-knowledge rollups.

Data from DefiLlama shows that Base is currently the third-largest layer-2 ecosystem on Ethereum, with a total value locked (TVL) of nearly $870 million. This figure has risen rapidly over the past week, driven by the spread of the memecoin craze across various blockchains.

Statistics from Nansen also indicate that the daily transaction volume on Base has tripled, reaching 600,000 transactions, while the average is typically around 200,000.

Just yesterday (March 20), the trading volume on Base’s DEX set a new record of $359 million, a 53% increase from the previous month. The amount of gas consumed on Base during this period also hit an unprecedented high of 478.24 ETH. Notably, the number of active wallet addresses on a daily basis reached 464,000, with 129,600 new wallets being created.

Some observers have drawn comparisons between Base’s situation and the layer-1 Solana ecosystem, which is also being driven by the memecoin craze and has experienced network congestion issues multiple times in the past.