Coinbase’s Ethereum layer-2 network, Base, has surpassed Tron to become the fifth largest blockchain by decentralised finance (DeFi) deposits. According to DefiLlama data, deposits across Base’s DeFi ecosystem, commonly referred to as total value locked (TVL), surged past $6.6 billion, edging out Tron’s $5.2 billion.

This milestone underscores how rapidly Coinbase’s blockchain, launched in 2023 in collaboration with Optimism, has grown in the highly competitive DeFi space. For comparison, when Coinbase unveiled Base, the project was initially viewed as just another scaling solution; a year later, it has become a major hub for lending and borrowing protocols.

Lending Protocols Drive Growth

The bulk of Base’s rise can be attributed to its booming lending sector, which mirrors a wider surge in DeFi lending globally. Across the entire ecosystem, DeFi users have now committed $73 billion to lending protocols, a 52% increase since January.

On Base itself, the standout protocol is Morpho, a decentralised lending platform that has attracted more than $2.5 billion in deposits, making it the largest application on the network. Morpho’s integration with Coinbase, which allows customers to borrow stablecoins against Bitcoin has alone driven an additional $1 billion in deposits.

Aave, another leading lending protocol, is the second biggest on Base, and together the two platforms account for over 60% of the network’s deposits. Their dominance illustrates the outsized role lending plays in DeFi growth, particularly on Base.

Coinbase Leverages Its Ecosystem

Coinbase has played a central role in fuelling Base’s momentum. The US-listed exchange has leaned on its vast user base and brand recognition to encourage adoption, while also offering fast and low-cost transactions to keep users engaged.

A dedicated Base mobile app, essentially a rebranded version of the Coinbase wallet has further strengthened user activity. Launched in July, the app significantly boosted volumes for Morpho, demonstrating the power of Coinbase’s ability to funnel traffic into its own blockchain.

Industry insiders say this strategy mirrors moves by other centralised exchanges. Binance, for instance, launched BNB Chain (formerly Binance Chain) in 2017, which now ranks third globally with more than $9.3 billion in DeFi deposits. Similarly, Crypto.com’s Cronos chain, launched in 2021, has climbed to 16th position with $643 million.

Tron Still Strong in Stablecoin Activity

Although Base has surpassed Tron in terms of DeFi deposits, Tron remains a formidable player in other areas. Its top protocol, JustLend, holds $5.2 billion in deposits, rivaling the combined strength of Morpho and Aave. Moreover, Tron continues to lead Base in stablecoin trading volumes, a sector where it has long dominated thanks to its early focus on Tether (USDT) integration.

This dynamic suggests that while Base is emerging as a lending powerhouse, Tron retains strengths in payments and trading activity. The competition between the two blockchains highlights the fragmented but complementary nature of the DeFi landscape.

Network Effects and Future Outlook

The success of Base also demonstrates the importance of network effects. Projects such as YO Protocol, a yield aggregator holding $73 million in deposits, have deliberately chosen Base over dozens of rival blockchains, citing Coinbase’s massive reach as the decisive factor.

“The vast Coinbase user base provides a foundation for a thriving marketplace,” said Mehdi Lebbar, co-founder of YO Protocol, explaining why his team built on Base.

Looking ahead, Coinbase is expected to continue benefiting from the broader crypto market rally. Analysts at Bernstein recently projected that the exchange’s stock could climb by as much as 60%, to $510, as momentum in both retail and institutional adoption builds.

With a combination of aggressive ecosystem support, seamless integration with Coinbase’s existing services, and strong user incentives, Base appears well-positioned to cement itself as a long-term player in DeFi. Its ability to sustain momentum, however, will depend on how it continues to innovate while competing against entrenched rivals like Tron and Binance’s BNB Chain.