Coinbase’s blockchain is now the fifth biggest in DeFi.

Deposits to decentralised finance protocols on the Base network soared to more than $6.6 billion per DefiLlama data, propelling it above rival Tron.

DeFi protocol deposits, often referred to as total value locked, or TVL, are a widely used metric to gauge how well a given blockchain’s DeFi ecosystem can attract capital, and its overall performance compared to its peers.

“Base is doing a great job promoting native lending and borrowing protocols,” a spokesperson for DeFi lender Morpho, the biggest DeFi protocol on Base with over $2.5 billion in deposits, told DL News .

The spokesperson said Morpho’s integration with Coinbase that lets customers borrow stablecoins against their Bitcoin is a big driver of deposits, contributing $1 billion to Morpho’s Base TVL.

It is another example of how Coinbase has benefitted from the bullishness in crypto markets this year.

The US-listed crypto exchange is expected to further leverage the crypto rally to propel its stock by 60% to $510 in the near future, according to researchers at Bernstein .

Lending surge

Morpho, along with Aave, the second largest lending protocol on the blockchain, account for more than 60% of Base’s DeFi deposits .

It’s emblematic of the surge in DeFi lending across the entire DeFi ecosystem since the start of the year.

DeFi users have piled some $73 billion into lending protocols, a 52% increase since January, according to DefiLlama data.

Base is a so-called layer 2 blockchain, meaning that it is built on top of Ethereum. Coinbase launched Base in 2023 in partnership with fellow Ethereum layer 2 Optimism.

A Coinbase spokesperson told DL News that the firm has prioritised offering fast, low-cost transactions to attract users.

Network effects

Tron, the blockchain launched in 2017 by Chinese-born entrepreneur Justin Sun, is also benefiting from the increased interest in DeFi lending. Its top DeFi lender, JustLend, boasts some $5.2 billion in deposits, more than Morpho and Aave combined.

To be sure, while Base is pulling ahead of Tron in terms of DeFi deposits, Tron still beats it in other metrics, like stablecoin trading volume .

Tron DAO, an organisation that supports the Tron blockchain, did not immediately respond to a request for comment.

It’s Base’s dozens of smaller projects, then, that make up the deposit difference.

Base’s rapid growth is driven by powerful network effects, Mehdi Lebbar, co-founder of YO Protocol, a yield aggregator with $73 million in deposits, told DL News .

“Coinbase’s vast user base provides a foundation for a thriving marketplace,” Lebbar said, explaining why YO decided to launch on Base over dozens of other rival blockchains.