Base Surpasses Arbitrum as Largest Ethereum Layer-2 Following Stage 1 Transition

• Base surpasses Arbitrum as the largest Ethereum Layer-2 after a transition from Stage 0 to reach Stage 1 level maturity.

• Vitalik Buterin’s previous warning about L2 rollups doomed to fail no longer applies to Base, now recognized as a Stage 1 rollup.

• Base’s ecosystem continues to grow, with Aerodrome leading protocols alongside Morpho, Aave, and Uniswap, among others.

Base has overtaken Arbitrum as the leading Ethereum Layer-2, marking a significant evolution in its maturity and ecosystem growth.

Base Becomes Largest Ethereum L2, Arbitrum Follows

Data from L2Beat illustrates that Arbitrum One is no longer the largest optimistic rollup on Ethereum. This analytics platform specializes in tracking the developments of Ethereum layer-2 solutions.

Following a significant surge of $557 million in Total Value Locked (TVL), Base has surpassed Arbitrum, achieving a total value secured of over $710 million.

Ethereum L2 rollups. Source: L2Beat

In transitioning from Stage 0 to Stage 1, Base has moved beyond the initial phase where the rollup is entirely controlled by its operators, marking an essential step in its development.

Now a Stage 1 rollup, Base features smart contract governance alongside a security council designed to address potential bugs, thus allowing for “limited training wheels.”

“Proud that Base is now stage 1 — and #1 by TVS but it’s still day one. Time to bring the world on-chain,” stated Base creator Jesse Pollak.

This sentiment resonates with Base’s ambition to foster an innovative on-chain creator ecosystem, promoting both virality and creativity.

Moreover, having achieved Stage 1 status, Base has effectively evaded Vitalik Buterin’s earlier categorization of L2 networks that were “doomed to fail.” In September, Buterin identified several layer-2 networks that needed to advance to secure their positions.

Buterin emphasized that he would recognize L2 networks reaching a maturity beyond Stage 1. He bases his assessments on a decentralization scale for various L2s.

“Stage 1 (75% threshold on the council to override the proof system, 26%+ of the council must be outside the rollup team) is a very reasonable milestone. The era of rollups being glorified multisigs is ending,” Buterin articulated, showcasing his commitment to enhancing cryptographic trust.

This directive aligns with Buterin’s broader strategy for Ethereum, as he recently outlined plans for scaling both L1 and L2 protocols by 2025.

COINOTAG reported that his proposals included incentivizing the integration of L2s within Ethereum’s ecosystem, encompassing aspects such as fee burning, staking, and public goods funding.

Despite it being the first instance of Base exceeding Arbitrum, it has historically challenged its competitor’s market position, evidencing its growth trajectory that saw Base’s TVL surpass $2 billion in September, concluding a remarkable 400% growth period, closing in on Arbitrum’s $2.6 billion TVL.

Aerodrome remains the leading protocol on Base, boasting approximately $830 million in TVL and showcasing a 5% increase in the last week. Notable protocols within Base also include Morpho, Aave, and Uniswap.

Base L2 Protocols. Source: DefiLlama

As Base solidifies its lead, it is essential to acknowledge Arbitrum’s challenges. The network is still recovering from an approximately 80% decline, initiating key recoveries, including token buybacks and a previously rejected proposal for Nvidia accelerator program support.

Arbitrum (ARB) Price Performance. Source: COINOTAG

Data from COINOTAG indicates that Arbitrum’s ARB price experienced a 2% increase within the last 24 hours, currently trading at approximately $0.33.

Conclusion

The rise of Base as the largest Ethereum layer-2 solution underscores a critical shift in the scalability landscape, emphasizing the importance of maturity and decentralization. With an expanding ecosystem and a commitment to innovation, Base is poised to influence the future trajectory of Ethereum’s development.