Coinbase (NASDAQ:COIN)'s Ethereum layer-2 network, Base, experienced a significant slowdown in activity following an initial surge earlier this year. The network, which launched on August 9, saw a steady rise in token holders within its ecosystem, with tokens like Echelon Prime and Aero recording 16.83k and 7.77k addresses respectively. The launch of Friend. tech, a decentralized social media platform, and the decentralized exchange Aerodome on Base significantly boosted the network's standing, pushing the total value locked (TVL) on the network beyond $400 million.
The base also benefited from collaborations with industry players such as Chainlink. Despite these developments, ITB’s analysis indicates a notable decrease in activity on the Base blockchain. Daily active users dropped by over 64% from an all-time high of 145,479. Additionally, no day since August 25 has seen transaction volume for major protocols exceed $4 million.
This slowdown in activity and the direct link of token volumes to protocols incentive programs suggest that these tokens have yet to achieve blue-chip status. Despite an initial retail rush which contributed to an early surge in activity, the volume of transactions for featured protocols hasn't surpassed $4 million.
The data from Dune Analytics further corroborates this trend, showing a gradual tapering off of Base's activity. Despite the growth driven by collaborations and new launches, these indicators suggest a cautious approach by investors toward the tokens on Base's platform.
InvestingPro Insights
In the context of Coinbase's recent developments, it's important to consider some key insights from InvestingPro. The company has seen a declining trend in earnings per share and analysts do not anticipate it will be profitable this year, as per InvestingPro Tips. Additionally, the company's stock price movements have been quite volatile, with a significant price fall over the last three months, although there was a large price uptick over the last six months.
Turning to InvestingPro Data, Coinbase has an adjusted market cap of $18.45 billion and a negative P/E ratio of -13.82 as of Q2 2023. The company's revenue for the last twelve months as of Q2 2023 stood at $2580.23 million, showing a decrease of 55.34% compared to the previous period. Furthermore, the price-to-book ratio is at 3.37, indicating that the market values the company at more than three times its book value.
These insights underscore the dynamic and challenging landscape that Coinbase operates in. For a more comprehensive understanding of the company's financial performance and future prospects, consider exploring the additional tips and data available on InvestingPro.
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