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The Base Layer 2 (L2) network has seen massive capital inflows in the past 24 hours, driven by bullish sentiment after Coinbase’s Q2 earnings beat expectations. The L2 network is built on Ethereum and utilizes Optimism’s OP Stack to offer users high security, scalability, and interoperability.
When Base debuted, Coinbase said exchange users would access the crypto ecosystem via Base’s intuitive interface. This marked an important development in Coinbase’s business model, elevating it from a centralized crypto exchange to a Web3 gateway.
Coinbase Q2 Earnings Inspire Base TVL Surge
Base Total Value Locked (TVL) soared by $11 million in the past 24 hours, from $1.666 billion to $1.677 billion between August 1 and 2. It comes after recent challenges on the L2 network, including security concerns about its meme coin projects.
The renewed positive sentiment comes after firm’s Q2 earnings showed it beat its revenue expectations. Coinbase reported its Q2 earnings on Thursday, recording a profit of $0.14 per share on revenue of $1.40 billion, surpassing Wall Street estimates, which had anticipated a profit of $0.94 per share on revenue of $1.38 billion.
The exchange’s subscription and services unit, comprising non-trading-related businesses, contributed $599 million to the revenue totals.
Read more: Coinbase Review 2024: The Best Crypto Exchange for Beginners?
Beyond the numbers, Coinbase CEO Brian Armstrong acknowledged partnerships with Bitcoin and Ethereum ETF (exchange-traded fund) issuers. As BeInCrypto reported, Coinbase offers custody services to multiple ETF issuers, ensuring secure preservation of tokens for investors.
Armstrong also reiterated the need for regulatory clarity, highlighting that Coinbase is the only crypto exchange publicly listed in the US. He is optimistic that the next US president will be “constructive on crypto,” despite being Republican or Democrat.
“We are increasingly optimistic that the next administration, whether Democrat or Republican, will be constructive on crypto. The rhetoric has shifted,” Armstrong said on the post-earnings conference call.
Three factors support Coinbase CEO’s optimism:
- Politicians on both sides of the aisle have taken notice, and there is growing momentum to pass comprehensive crypto legislation.
- The US Securities and Exchange Commission (SEC) has dropped some of its investigations against the industry. Spot ETF approvals are also a good sign.
- The Supreme Court overturned the Chevron deference, an established legal standard. This effectively kneecapped the regulator’s enforcement drive against the industry. BeInCrypto reported that the attorney who overturned the Chevron doctrine is now on Coinbase’s board of directors.
Read more: Who Is Brian Armstrong? A Deep Dive Into the Coinbase Founder
Another interesting revelation in the post-earnings call is that Coinbase plans to launch a crypto index fund, dubbed Coinbase 500. This is part of the exchange’s product roadmap, inspired by US politicians’ and regulators’ signaling more positive crypto-focused stances.