Ethereum News Today: Base Generates $185K Daily Revenue Outpacing Arbitrum via Auction-Driven Model

Coinbase-incubated Ethereum Layer 2 network Base has solidified its position as the most profitable rollup in the ecosystem, generating an average of $185,291 in daily revenue over the past six months, outpacing Arbitrum’s $55,025 and the combined $46,742 from 14 other top Layer 2s. This dominance stems from a dynamic auction-based fee model and strategic infrastructure upgrades that optimize block space monetization while maintaining low user costs. Galaxy Digital’s analysis highlights Base’s EIP-1559-inspired approach, which allows sequencers to prioritize transactions based on highest bid per gas unit rather than rigid first-come-first-served ordering. This mechanism enables users to pay premiums for urgent execution, capturing demand spikes more effectively than competitors’ fixed-rate systems [1].

Ethereum’s Pectra upgrade further amplified Base’s efficiency by reducing Layer 1 posting costs through blob-based data submission. This innovation has enhanced Base’s ability to monetize block space without inflating transaction fees for users. The network’s recent implementation of “Flashblocks”—which allows high-priority transactions to receive sub-block confirmations—has also diversified revenue streams. By distributing priority fees across lower slots while preserving instant execution for urgent trades, Base maintains robust fee generation even as slot allocation evolves [1].

Decentralized exchange (DEX) activity remains a cornerstone of Base’s revenue engine. The platform consistently captures 50%-65% of Layer 2 DEX volume, with its DEX total value locked (TVL) ranking highest among peers excluding perpetual DEXs. While DEX-related priority fees previously contributed 50%-70% of daily revenue, this share has dipped to 34% recently due to rising base fees and non-DEX competition for block space. Despite this shift, DEX swaps remain critical for time-sensitive trades and maximum extractable value (MEV) strategies, reflecting Base’s adaptability in a competitive landscape [1].

However, revenue concentration raises questions about accessibility. A small cohort of 250 addresses accounts for 65% of all priority fees paid over the past year, indicating that high-impact users dominate the network’s value capture. This trend aligns with broader Ethereum dynamics, where institutional and retail capital inflows have driven network revenue to $552 million in Q4 2024, contrasting starkly with Cardano’s $1.8 million. Base’s success underscores the importance of modular architecture in sustaining blockchain growth, as Layer 2s increasingly become essential for scaling DeFi and tokenized economies [1].

The network’s trajectory highlights Ethereum’s resilience in an evolving ecosystem. While competitors like Arbitrum have introduced features such as Timeboost for slot-bidding, their fixed-rate models struggle to match Base’s responsiveness to demand fluctuations. Base’s ability to balance scalability with profitability—through auction mechanisms, infrastructure upgrades, and DEX-driven liquidity—positions it as a linchpin in Ethereum’s long-term value proposition. Yet, the concentration of revenue within a single Layer 2 also signals potential bottlenecks, emphasizing the need for continued innovation across the ecosystem to avoid centralization risks [1].

Source:

[1] "Here’s Why Base Is Crushing Other Ethereum Layer 2s in Revenue," CoinMarketCap, https://coinmarketcap.com/community/articles/68865d62bc4f3d117c473b3a/