The Ethereum (ETH) Layer 2 network known as Base, operated by the United States-based cryptocurrency exchange Coinbase, has experienced a notable uptick in its total locked value (TVL). Deposits from users on the network have nearly doubled, skyrocketing to nearly 1 billion dollars. Notably, a substantial portion of this locked value originates from Aerodrome (Aero), a decentralized cryptocurrency exchange.

The Emergence of Aerodrome and the Aero Token

Recent data from DeFiLlama indicates that Base's TVL stands close to 1 billion dollars, with a significant contribution coming from the decentralized exchange Aerodrome, boasting a TVL of 424 million dollars. This impressive figure accounts for about half of the total TVL on the Base network.

Aerodrome, functioning within the Base network, has witnessed remarkable growth, becoming a dominant force in Base's TVL. Beginning with a TVL of 125 million dollars in February, Aerodrome's value has surged to over 420 million dollars, propelled by heightened user engagement and a substantial rise in the value of its native asset, the Aero token.

The team behind Aerodrome, Velodrome Finance, introduced this decentralized exchange as a forked version on Base in September 2023. Aerodrome aims to enhance on-chain liquidity within Base and facilitate a significant portion of the network's swaps using decentralized finance (DeFi) incentives and governance mechanisms, akin to its strategy with Velodrome on the OP Mainnet.

The Influence of Ethereum's Dencun Update

Base's mainnet went live to the public in August 2023, swiftly ascending to become the fourth most valuable Layer 2 network in terms of TVL, surpassing competitors like Arbitrum (ARB), Optimism (OP), and Blast. Following Ethereum's significant Dencun update for Layer 2 networks, Base experienced a surge in daily users and transactions, achieving record-breaking levels of activity.

The escalation in TVL and user engagement on Base underscores the escalating demand for Layer 2 solutions within the Ethereum ecosystem. These solutions offer scalability and reduced transaction fees compared to the Ethereum mainnet. With the backing of Coinbase and the success of projects such as Aerodrome, Base consolidates its position as a prominent player in the Layer 2 landscape, providing users with efficient and economical decentralized exchange services.