Research Summary
This report discusses the strategic alignment of major centralized exchanges (CEXs) like Coinbase, Bybit, and Binance with the Ethereum ecosystem and its Layer-2 (L2) chains. The exchanges aim to leverage the momentum, liquidity, and user base of Ethereum to bridge the gap between CEXs and decentralized finance (DeFi). The report also highlights the success of Base, a new Ethereum L2 chain backed by Coinbase, in terms of total value locked (TVL), user metrics, and fees generated.
Key Takeaways
CEXs’ Strategic Alignment with Ethereum Ecosystem
- CEXs’ Adoption of L2 Chains: Major CEXs like Coinbase, Bybit, and Binance have launched L2 chains such as Base, Mantle Network, and opBNB to leverage the Ethereum ecosystem’s momentum, liquidity, and users.
- Bridge between CEXs and DeFi: This strategic alignment allows CEXs to tap into a resilient and growing market and enables CEX users to gain easier access to DeFi applications, creating a synergy between centralized platforms and DeFi.
- Common Architecture: The OP Stack, a crucial piece of architecture, has been a constant amongst the three newly launched L2s.
Success of Base, the Ethereum L2 Chain Backed by Coinbase
- Base’s Meteoric Rise: Among the newly minted L2s, Base has stood out due to its meteoric rise in total value locked (TVL), users, and fees generated.
- Base’s User Metrics: Base’s user metrics have exploded, putting it in contention with market leading L2s Arbitrum and Optimism.
- Value Accrual: The report explores how value accrual interacts with key players such as Optimism and discusses whether this momentum is sustainable.
Actionable Insights
- Investigate the Potential of L2 Chains: Given the success of Base and the strategic alignment of major CEXs with the Ethereum ecosystem, there is potential in exploring the benefits and opportunities presented by L2 chains.
- Consider the Synergy between CEXs and DeFi: The bridging of the gap between CEXs and DeFi presents opportunities for easier access to DeFi applications and tapping into a resilient and growing market.
- Monitor the Performance of Base: Base’s meteoric rise and exploding user metrics indicate potential for growth and success, making it a key player to watch in the Ethereum ecosystem.
