Base, the Ethereum layer-2 scaling network launched by top U.S. crypto exchange Coinbase, generated more than $6 million in on-chain profits in May, making it the most profitable layer-2 network while topping the likes of Blast and Optimism in the process.

Base’s surging profits have been fueled by a rapid increase in total value locked (TVL), according to L2BEAT, in turn driven by Ethereum’s implementation of EIP-4844 and proto-danksharding via the anticipated Dencun upgrade in March.

According to blockchain analytics platform GrowThePie, Base generated the most on-chain profit of any layer-2 chain with $6.1 million in May, followed by $1.5 million for Blast and $1.4 million for Optimism. While Base is far ahead of these rivals in the profitability wars, its monthly tally has declined sharply after spiking with Dencun upgrade in March.

On the other hand, Blast, the rising layer-2 network from the makers of NFT marketplace Blur, has recently gained recognition for its unique native yield for ETH and stablecoins, as well as projects like Pacmoon and Fantasy Top that are doling out ample incentives to users.

Blast’s share of all layer-2 profits increased from 5.3% in April to 15.2% in May. It’s still well behind Base, however, which enjoyed 56.8% of all layer-2 profits last month.

On-chain profitability for layer-2 networks refers to the balance between costs to interact with the layer-1 network (Ethereum) and revenues generated via fees, token issuance, and other means. It does not include any off-chain expenses, and thus should not be considered a complete picture of how these networks are run from top to bottom.

A Dune dashboard maintained by pseudonymous on-chain analyst Kofi also put Base on top, but with just shy of $7 million in profit in May. The variance may be due to differences in how each data curator measures revenue and expenses. Dune’s dashboard excludes Blast data, however, so it’s an incomplete picture of how leading layer-2s stack up in that regard.

Per GrowThePie, Base has been the most profitable L2 each month since March 2024. In the last three months, its TVL nearly sextupled, from $1.3 billion to $7.6 billion, a historical high for the chain. As Optimism’s TVL has remained roughly flat in the last month, Base may be poised to overtake OP Mainnet.

Both Base and OP Mainnet are built on the OP Stack and are part of the Optimism “superchain” ecosystem, though they’re considered to be distinct L2s within that ecosystem. In terms of TVL, Base still remains far behind industry leader Arbitrum, which has $19.1 billion in TVL.

Besides the upgrades made possible by the Dencun fork, Base’s appeal within the crypto community has grown since Coinbase announced its new Smart Wallet, which is expected to improve accessibility of on-chain transactions to new adopters.

Coinbase’s Smart Wallet will make use of account abstraction, a way to facilitate easy on-chain transactions for those unfamiliar with the details of DeFi. Base has also benefited from the profile of Coinbase and the added exposure therein, along with promotional pushes like the latest “On-Chain Summer” rewards campaign that kicked off this week.

Edited by Andrew Hayward