Coinbase, a cryptocurrency exchange, has launched Base, a layer 2 network that uses Optimism’s OP Stack, with the aim of attracting millions of new crypto users in the future. Coinbase has begun testing the Base network on its testnet. Coinbase is joining Optimism as a core developer on the open-source OP Stack, a toolkit for the Optimism network. Base is not limited to Ethereum and will provide easy and secure access to layer 2 networks, such as Optimism, and other blockchain ecosystems, like Solana. Base offers a secure, low-cost, and developer-friendly way for anyone to build decentralized apps onchain. Coinbase plans to decentralize the chain progressively and has no plans to issue a new network token. Coinbase would allow developers to integrate their product with Base and provide fiat onramps, targeting an estimated 110 million verified users and $80 billion in assets on the platform in the Coinbase ecosystem. The Base Ecosystem Fund will invest in and support early-stage projects building on Base.
Base is an Ethereum L2 that offers a secure, low-cost, developer-friendly way for anyone, anywhere, to build decentralized apps. Our goal with Base is to make onchain the next online and onboard 1B+ users into the cryptoeconomy.
Does a L2 Coinbase Solution Make Sense?
Some argue that Coinbase’s L2 solution, which funnels all value back to ETH, could be a good option for a project of this scale that doesn’t try to profit via token. However, L2 solutions are generally centralized by nature, and some experts believe that Coinbase’s solution doesn’t provide enough decentralization for users.
One issue is the tradeoff between centralization and decentralization in L2 solutions. While L2s don’t necessarily need decentralization in the way that L1s do, this makes them less ideal for storing real value. Storing all value on Ethereum and only routing transactions on top of L2 could be a better solution.
Another issue is the technical feasibility of Coinbase’s L2 solution. While it may work well for the crypto ethos, it’s unclear if Coinbase’s L2 solution provides enough decentralization for users. Moreover, some experts believe that Coinbase’s solution doesn’t offer enough security for users.
Overall, there are concerns about Coinbase’s role as an L2 solution for Ethereum. While there may be some benefits to Coinbase’s approach, it’s important to carefully consider the risks and benefits of different options and to make informed decisions based on your individual goals and risk tolerance.
It’s worth noting that despite the anticipation surrounding Coinbase’s Base network launch, the announcement has been seen as lackluster by some in the cryptocurrency community. This is likely due to Coinbase’s disappointing track record over the past year, particularly with its failed launch of an NFT marketplace, which was announced with great fanfare but ultimately scrapped. Some critics are concerned that Coinbase may struggle to attract users to its new network, especially given the increasing competition in the cryptocurrency space. However, others remain optimistic about the potential of the Base network, and believe that Coinbase’s expertise and resources may give it an edge over its rivals in the long run. Only time will tell whether the Base network will be successful or not.
Important: Base is *not* a token We do not plan to issue a new network token for Base and will use ETH as the native gas token.
1/ 🔵 We’re excited to announce @BuildOnBase.
Base is an Ethereum L2 that offers a secure, low-cost, developer-friendly way for anyone, anywhere, to build decentralized apps.
Our goal with Base is to make onchain the next online and onboard 1B+ users into the cryptoeconomy. pic.twitter.com/RmwZFJzGGs
— Coinbase (@coinbase) February 23, 2023