Base, the Ethereum Layer-2 network incubated by Coinbase, has seen its total value locked (TVL) decline by $1.4 billion over recent weeks, according to a report from BeInCrypto.
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The drawdown comes as public friction intensifies among builders, community members, and Coinbase leadership over the chain's strategic direction and product priorities.
What's Behind the TVL Drop
The $1.4 billion outflow marks a notable reversal for a network that had been one of the fastest-growing Layer-2s throughout 2024. Base had attracted significant capital and developer activity on the back of Coinbase's brand, its integration with the exchange's user base, and a wave of consumer-facing applications built on the chain.
However, the recent decline signals that capital is rotating elsewhere as confidence wavers. The TVL slide coincides with a broader period of debate within the Base ecosystem about what the chain should prioritize — and whether its current trajectory aligns with the expectations of its builder community.
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Community Friction Over Vision and Execution
At the center of the tension is a growing rift over Base's identity and execution strategy. Critics within the community have raised concerns about the chain's product direction, questioning whether Coinbase's leadership is steering Base toward outcomes that serve the exchange's corporate interests rather than the broader decentralized ecosystem.
The debate has played out publicly, with builders and commentators voicing frustration over what they perceive as misaligned incentives and a lack of clarity around Base's 2025–2026 roadmap. Some developers have pointed to cultural friction — arguing that the chain's governance and communication style feels more like a corporate product than a community-driven network.
Coinbase leadership has engaged with some of the criticism, though specific responses and commitments around the chain's future direction remain limited.
The company has previously positioned Base as a key pillar of its on-chain strategy, aiming to bring the next wave of mainstream users into the Ethereum ecosystem.
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Broader Layer-2 Context
Base's challenges come during a competitive period for Ethereum Layer-2 networks. Rivals including Arbitrum, Optimism, and newer entrants continue to vie for developer mindshare and liquidity. TVL movements across L2s have been volatile in recent months, driven by airdrop speculation, incentive programs, and shifting sentiment.
The decline also raises broader questions about the sustainability of corporate-backed Layer-2 strategies.
While Coinbase's involvement gave Base early credibility and distribution advantages, the current friction suggests that bridging traditional corporate governance with decentralized community expectations remains a difficult balancing act.
What to Watch
Key indicators going forward include whether Base can stabilize its TVL, how Coinbase responds to community demands for greater transparency, and whether any concrete roadmap updates emerge in the coming weeks.
The chain's ability to retain its developer base — and the applications they've built — will likely determine whether this episode is a temporary setback or the beginning of a longer-term repositioning within the Layer-2 landscape.
