Bankless: Why is Base’s Extra so popular?

Author: Jack Inabinet, Bankless; Compiled by: White Water, Golden Finance

Extra Finance (EXTRA) has experienced a meteoric rise, breaking last week's high after soaring more than 100% in the past 24 hours. All time high. What developments have fueled this growth, and how will EXTRA sustain this momentum?

While EXTRA holders made huge gains in late February and early March, the price remained stagnant throughout the month until yesterday morning when the coin began its parabolic rise.

As the token price has increased, so has Extra’s Total Value Locked (TVL), with the metric increasing 2x since the beginning of the month!

Extra Finance is a deployment Lending platforms on Base and Optimism enable users to borrow funds from lenders and provide liquidity to whitelisted decentralized exchanges (i.e. Velodrome and Aerodrome) through leverage to increase their yield.

The cryptocurrency space has seen a sharp increase in on-chain activity in recent weeks, with Ethereum L2 deployed by Extra Finance seeing a further increase in transaction volume this month due to the reduced data costs of EIP-4844.

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Higher levels of on-chain activity mean an increase in the number of transactions, which increases the leverage benefits available to participants on Extra and enables them to pay a higher cost of capital, which in turn Attracting more TVL to the application.

If L2 yields remain elevated, Extra Finance is well-positioned to further increase usage and TVL, particularly through its Base deployment, which has been the nexus for Extra's growth throughout the year.

Extra on Base ’s continued success, coupled with the fact that it is the third largest dApp on the TVL chain, suggests it may be a suitable candidate for Base Ecosystem Fund investment and listing on Coinbase, both of which could be positive catalysts for price.

Tokens from other popular Base applications, including Aerodrome, have previously been favored by Coinbase to support projects built on its chain.