Coinbase’s Base L2 Faces $4.3B Exodus as Ethereum Regains Layer 2 Crown

In a striking reversal of fortunes, Coinbase's Layer 2 solution Base has witnessed $4.3 billion in net outflows in 2025, according to Artemis Terminal data. This dramatic shift comes after Base's strong 2024 performance that saw $3.8 billion in net inflows, which had positioned it as the leading blockchain for cross-chain bridge activity. Meanwhile, Ethereum has reasserted its dominance in the Layer 2 space with $8.5 billion in net inflows this year, completely offsetting its $7.4 billion outflow from the previous year. The data suggests a significant reshuffling in the Layer 2 competitive landscape, with Ethereum regaining its position as the preferred platform for scaling solutions. This development marks a pivotal moment in the ongoing evolution of Layer 2 technologies and could signal changing investor preferences in the cryptocurrency market.

Base Sees $4.3B Outflows as Ethereum Regains Dominance in Layer 2 Shuffle

Coinbase's LAYER 2 solution Base has reversed its 2024 inflows streak with $4.3 billion in net outflows this year, according to Artemis Terminal data. The exodus marks a dramatic turnaround from last year's $3.8 billion net inflow that positioned Base as the top blockchain for cross-chain bridge activity.

Ethereum meanwhile reclaimed its throne with $8.5 billion in net inflows, erasing last year's $7.4 billion outflow. The shift underscores Ethereum's renewed appeal as the dominant smart contract platform, with Base's stablecoin supply stagnating above $4 billion since May amid declining trading volumes.

L2BEAT data reveals Base's ether reserves collapsed from 1.82 million ETH to 835,000 ETH in just four weeks - a trend mirroring broader capital rotation away from Layer 2 solutions. "The bridge metrics tell a clear story," says Michael Nadeau of The DeFi Report. "When liquidity leaves en masse, even the most promising Layer 2 networks can quickly become ghost chains."

Oregon AG Opposes Coinbase's Bid to Move Securities Case to Federal Court

Oregon Attorney General Dan Rayfield is pushing to keep the state's securities lawsuit against Coinbase in Multnomah County court, rejecting the exchange's attempt to shift proceedings to federal jurisdiction. The case centers on allegations that Coinbase facilitated unregistered crypto asset sales—claims the company dismisses as politically motivated.

The legal battle hinges on Oregon's Pratt test, a broader standard for defining investment contracts than the federal Howey test. This distinction could prove pivotal in classifying cryptocurrencies as securities under state law. Rayfield's motion frames the dispute as a routine state enforcement matter, countering Coinbase's warnings about fragmented regulation as hyperbolic rhetoric.

This clash underscores the growing tension between state and federal approaches to crypto oversight. While federal agencies grapple with jurisdictional questions, Oregon's action demonstrates states' willingness to apply traditional securities frameworks to digital assets.

Malicious Firefox Extensions Target Crypto Wallets in 'FoxyWallet' Campaign

More than 40 fraudulent browser extensions have infiltrated the Firefox Add-ons store, masquerading as legitimate cryptocurrency wallets to steal users' funds. Dubbed 'FoxyWallet,' the campaign impersonates popular wallets including MetaMask, Coinbase Wallet, and Trust Wallet, according to cybersecurity firm Koi Security.

The malicious code siphons wallet secrets to attacker-controlled servers, specifically targeting input strings longer than 30 characters to capture seed phrases and private keys. Victims' IP addresses are also exfiltrated, enabling potential follow-on attacks. Mozilla acknowledged the challenge in a recent blog post, describing its ongoing battle against malware developers as a 'constant cat and mouse game.'

Lightchain AI Gains Traction Amid Ethereum Layer-2 Competition

Lightchain AI is emerging as a quiet contender in the blockchain space, securing nearly $21 million in funding through its presale stages, now in a Bonus Round at $0.007 per token. The project distinguishes itself with a fully functional AI VIRTUAL Machine, transparent governance, and developer grants—eschewing hype for tangible utility.

Meanwhile, Ethereum's Layer-2 ecosystem remains fiercely competitive. Arbitrum and Base lead with over $2.3 billion each in Total Value Locked, while Optimism trails at $664 million. Base, backed by Coinbase, processes 6 million daily transactions and hosts 28% of new startups within its first year. Yet, fragmentation persists across 40+ L2 solutions vying for developer adoption.