Layer-2 Base Under Pressure Amid Memecoin Craze

Amid a rush for memecoins, gas fees on the Layer-2 Base have at times surged to $5 per transaction.

Layer-2 Base Under Pressure Amid Memecoin Craze. Image: Blockworks

Base, the Layer-2 blockchain of the cryptocurrency exchange Coinbase, is facing significant challenges in meeting the skyrocketing demand across its ecosystem.

Recently, the project issued a warning:

"The traffic on Base Mainnet is increasing sharply, leading to surging transaction fees. Some transactions are stuck due to underpaid fees, while others cannot be canceled."
Announcement posted on the Base website

According to data from DefiLlama, Base is currently the third-largest Layer-2 on Ethereum, with a Total Value Locked (TVL) nearing $870 million. This figure has rapidly escalated over the past week, primarily driven by the memecoin frenzy bubbling across various blockchains.

TVL of Base from July 2023 to present. Source: DefiLlama

Statistics from Nansen also indicate that transaction volume on Base has tripled to 600,000 daily, while throughput typically hovers around 200,000.

Notable memecoins on Base include normie (NORMIE), Briun Armstrong (BRIUN), and brett (BRETT), which have surged 500% compared to the previous week, as reported by DEXTools. The robust surge in memecoins has sometimes pushed gas fees on Base to $5 per transaction, whereas network fees usually remain below $1.

Just yesterday (March 20), DEX trading volume on Base reached a record-high $359 million, marking a 53% increase from the previous month. Gas consumption on Base during this period also hit an uncommon high of 478.24 ETH. Daily active wallet addresses reached 464,000, including 129,600 newly created wallets.

Some observers have even drawn parallels between Base and the Layer-1 Solana ecosystem, which has also been propelled by the memecoin explosion and has faced network congestion multiple times in the past.