Base Keeps Growing Based on DeFi Lending, as Its App Activity Is up by 129%

The growth of Morpho lending and overall DeFi value locked is driving the expansion of Base.

Base is showing strong growth in its underlying app activity, despite the recent slowdown in memes and AI agents. This growth is largely driven by the expansion of Morpho lending and the overall increase in DeFi value locked on Base.

According to DappRadar, Base's app activity saw a 129% increase, with the chain now hosting over 500 decentralized applications (dApps). Among these, top DeFi hubs are showing strong performance in early 2025. The tokenless chain's activity has also expanded to over 2 million daily active users (DAUs) in January, indicating a surge in on-chain engagement over the past three months.

The adoption of Base is being fueled by the activity on SynFutures DEX and Morpho DeFi lending. Initially launched as a chain for fun NFT and meme experiments, Base is now pivoting towards DeFi, with a growing volume of cbBTC trading. Morpho's expansion follows its promotion by Coinbase as a source of crypto-backed loans, offering access to Coinbase users to borrow against a collateral of Bitcoin (BTC).

Another factor boosting Base's growth is its addition to Phantom Wallet, which was used to onboard more new users in the last quarter of 2024.

Base's app volumes reached an all-time high in January after months of accumulating users. Initially, Base was generating mostly low-value traffic, with accessible transactions and meme-based activity. Currently, Base also carries $2.27 billion in cbBTC, further boosting liquidity for DeFi activities.

Over time, Base locked in $3.47 billion in total value, although other reports count a higher value locked in smart contracts. Morpho Blue, the Base version of the lending protocol, locks in a total of $3.56 billion on all chains, contributing significantly to Base's inflows. The lending protocol recently expanded its assets and loans to a new all-time high.

The activity of decentralized applications and complex interactions with DeFi protocols are increasing the throughput for Base or gas spent on each transaction. Base leads other L2s in the throughput metric, showing consistent growth since the chain's launch.

Top DeFi apps boost Base's revenue

DappRadar's reports indicate that Base carries $2.44 billion in its top DeFi applications, or $1.59 billion in adjusted value. The chain's top applications include Uniswap V2 and V3, Aerodrome, Morpho, and Moonwell, among others. This path of development chosen by Base could enable it to compete with Solana, although the chain still lags in most metrics.

The increased app activity also translates into higher fees for the chain. Base achieved over $12 million in fees for December and over $11.48 million for January to date. Base is one of the few chains with a relatively low cost of revenues, managing to retain most of its on-chain earnings. For the past three months, Base has achieved more than $8 million in retained earnings after paying out incentives.

Base's revenues grew again in the last quarter of 2024, although not reaching the peak levels from April. The chain's activity is now more sustainable, coinciding with the expansion of cbBTC. This recent expansion follows a period of deliberate marketing, which however produced much lower traffic.

Base only pays a few thousand dollars to verify its transactions on Ethereum, which hardly affects the chain's earnings. Base remains one of the cheapest L2s to transact on. The current app activity may be more organic, as Base has not hinted at airdropping a token. The chain carries some low-value or zero-cost transactions, but there is no immediate expectation of airdrop farming.

Base picks up Ethereum's activity

After Arbitrum's initial success, Base seems to be the chain picking up activity and liquidity from Ethereum. Arbitrum retained its status as the chain for DEX swaps and risky trading, while maintaining its relatively high inflows from the L1 chain. Arbitrum still leads with $5.6 million in stablecoin liquidity, while Base is slowly catching up with $3.6 billion in stablecoins.

The movements of liquidity from Ethereum into Base reached $3.44 billion, with a 5% share of stablecoins and the inclusion of ETH and bridged tokens. A total of 612,691 ETH have been bridged on Base for liquidity and DEX trading.

Base remains one of the top chains for DeFi and CeFi activity, largely due to Coinbase's efforts to offer consumer crypto products. Base still relies on Coinbase's regulated status and the reputation of USDC, its most widely used stablecoin. Base is one of the leading chains for token transfers and general on-chain utility.