Coinbase’s Ethereum Layer 2 network, Base, has officially surpassed both Polygon and Avalanche in total value locked (TVL), signaling a major shift in the DeFi landscape as institutional-grade infrastructure meets on-chain activity. As of July 13, 2025, Base now ranks as the third-largest Layer 2 by TVL, with more than $5.9 billion in assets secured across its ecosystem, according to data from L2Beat and DeFiLlama.
The milestone reflects a broader trend in DeFi’s resurgence and the market’s increasing preference for user-friendly, high-performance rollups. Backed by Coinbase and built using the Optimism OP Stack, Base has leveraged the exchange’s reach and trust to bootstrap liquidity and developers at a pace rarely seen in the space.
With a growing list of native applications, integrations with major protocols, and increased adoption among retail and institutional users, Base is no longer viewed as a side project — it’s becoming a foundational pillar of Ethereum’s Layer 2 roadmap.
Coinbase’s Strategic Advantage
The primary catalyst for Base’s growth is the unique synergy between its infrastructure and Coinbase’s massive user base. By seamlessly integrating Base with its main exchange interface, Coinbase has effectively removed friction from the DeFi onboarding process. Users can bridge assets, access dApps, and interact with smart contracts — all without leaving the Coinbase ecosystem.
This deep integration has brought hundreds of thousands of new users to Layer 2 DeFi, many of whom are interacting with on-chain finance for the first time. Coinbase Wallet, which now features one-click access to Base-native apps, has been instrumental in this surge, offering a familiar interface layered over cutting-edge DeFi functionality.
Additionally, Coinbase’s institutional custody services and compliance framework have made Base particularly appealing to fund managers, DAOs, and fintech firms looking to participate in DeFi within a regulated environment.
TVL Growth Driven by Lending, Perpetuals, and Stablecoins
Base’s rise in TVL is largely attributed to its rapidly expanding DeFi stack. Lending protocols such as Aave, Seamless, and Moonwell have attracted billions in deposits, offering attractive yields and institutional-grade risk models. Perpetual trading platforms like Level Finance and Synthetix are now gaining traction, catering to advanced users looking for derivatives and leverage products on-chain.
Stablecoins play a crucial role in Base’s ecosystem as well. USDC, which is natively issued by Circle on Base, has become the dominant stablecoin on the network. With Coinbase and Circle’s shared involvement, on-chain settlement in USDC has grown sharply, powering DeFi markets, payments, and treasury operations across hundreds of dApps.
Bridging solutions such as Wormhole and Axelar have also improved cross-chain liquidity, allowing assets from Ethereum, Solana, and Avalanche to flow into Base seamlessly. This cross-pollination of capital has reinforced Base’s position as a liquidity hub in the Layer 2 race.
Builder Momentum and Native dApp Growth
While many of Base’s early successes came from ported versions of Ethereum protocols, the network is now seeing an explosion in native dApp development. Projects like FriendTech (a social DeFi platform), Aerodrome (a decentralized exchange), and BasePaint (a collaborative NFT experiment) have helped build a culture of innovation and engagement unique to the chain.
These apps are leveraging Base’s low gas fees and fast finality to create user experiences that are often impossible on Layer 1. For example, microtransactions, social staking, and real-time trading are becoming standard features on Base-native platforms, encouraging stickiness and viral growth.
The Base ecosystem fund — backed by Coinbase Ventures — continues to invest in early-stage builders, offering grants, mentorship, and exposure. With hackathons, accelerator programs, and developer bootcamps, Base is creating a pipeline of talent and innovation that extends beyond simple DeFi primitives.
Security, Compliance, and Institutional Confidence
A key aspect of Base’s appeal lies in its security and regulatory alignment. Built on the OP Stack, Base benefits from Ethereum’s mainnet security while inheriting scalability from Optimism’s rollup architecture. Transaction finality is near-instant, and the risk of reorgs or MEV attacks is minimised through optimized sequencer logic.
Moreover, Coinbase’s oversight ensures that compliance is baked into the infrastructure. KYC-optional onramps, integrated analytics, and tax reporting tools provide institutional users with the confidence they need to deploy capital on-chain.
In July 2025, Base also passed a major security audit from OpenZeppelin, further reinforcing its readiness for enterprise-level applications. Discussions are underway to integrate Base into stablecoin settlement rails and tokenized asset platforms, potentially bringing trillions in TradFi assets into the fold over the next 12–18 months.
Base’s Position in the Layer 2 Landscape
Base surpassing Polygon and Avalanche is not just a numerical milestone—it reflects a paradigm shift in how Layer 2s are evaluated. Rather than just focusing on theoretical throughput or developer activity, the market is now rewarding rollups that offer a clear path to adoption, monetization, and trust.
Polygon, once a frontrunner in multichain scaling, has struggled to retain its TVL due to fragmentation between its PoS chain, zkEVM, and Supernets. Avalanche, while technically strong, has seen declining DeFi usage amid ecosystem consolidation and competition from Solana and Ethereum Layer 2s.
Base, by contrast, is unifying its narrative around simplicity, trust, and scale. Its alignment with Ethereum, Coinbase, and USDC gives it advantages that extend beyond technology—it has brand recognition, regulatory favourability, and user onboarding pipelines that others lack.
Conclusion
As of mid-July 2025, Base has emerged as a serious contender in the Layer 2 race. With TVL surpassing $5.9 billion and momentum building across lending, stablecoins, and native dApps, it has outpaced legacy networks like Polygon and Avalanche to become a new home for DeFi.
The network’s growth is a case study in how infrastructure, user experience, and institutional alignment can combine to create sustainable adoption. If current trends hold, Base could soon challenge Arbitrum and Optimism not just in volume but in defining the next generation of Ethereum’s scaling roadmap.
