For some context, earlier last week, Coinbase, which is one of the biggest centralized crypto exchanges in the world and is listed on the US bourses, announced that it is launching a new layer-2 platform built on Optimism. Curtly named 'Base', their official blog of the launch mentions,
"Base is a secure, low-cost, developer-friendly Ethereum L2 built to bring the next billion users to web3."
The blog also mentioned in bold that the company didn't plan on launching any network token for Base but that it will be,
"Leveraging the last decade of our experience building crypto products, and plan to progressively decentralize the chain over time."
Coinbase is joining Optimism as a Core Dev on the open-source OP Stack and will be working to create a thriving community of other developers.
Read more: Ethereum Shanghai Upgrade Explained
In light of this development, the largest trading and liquidity marketplace on the Optimism layer-2 scaling solution - Velodrome - recorded its highest all-time weekly fees of more than $101,460 starting on 23 February.
With a few more days left before the current week comes to an end, Velodrome is strongly on its way to generating fees totaling over $146,790, according to data sourced from the Dune Analytics dashboard, created by Michael Silberling, who works in the data department at OP Labs.
While this number does look hefty in light of Velodrome's past, it still has a long way to go, as by comparison - Optimism and Ethereum have been averaging approximately $490,000 and $33 million respectively in weekly fees since the start of 2023, according to data sourced from DefiLlama.
This major jump can be largely attributed to the launch of Coinbase's Base on 23 February 2023 - sparking interest and attention from the crypto community at large at the budding layer-2 platform, Optimism.
Alongside that, VELO, which is Velodrome's native crypto token witnessed a rally all through the month of February. Since the beginning of February, the price of VELO has more than quadrupled, and since the announcement has soared over 80%. It has corrected slightly from those highs but is still going strong. In this same week, Velodrome also saw $263 million worth of weekly trading volumes, which marked a solid 6-month high in this metric too!
According to the report by CoinDesk, the two most popular pairs on Velodrome by fees generated are OP/USDC and VELO/USDC.
OP, which happens to be the native crypto token of the Optimism protocol, an Ethereum layer-2 scaling solution was airdropped on 31 May 2022 and it is a governance token that grants holders governance rights regarding technical and public goods funding decisions on the platform. VELO however, is a utility token that is used to reward liquidity providers through emissions.
Further, data from the crypto and blockchain analytics platform Nansen shows that Velodrome has had more than 14,000 users and over 81,000 transactions in the past seven days alone. Also, data from DefiLlama shows that Velodrome's total-value-locked (TVL) in DeFi stands at about $313 million as of writing this article, making it the seventh-largest decentralized exchange (DEX) out there.
Additional read: What is TVL?
Values as on 28 February 2023.