Major Insights
- Coinbase has launched its own Ethereum Layer 2 solution to address high fees and slow confirmation times on the Layer 1 blockchain.
- With this new solution, users can conduct transactions faster and cheaper, while also earning interest on their holdings.
- This move puts Coinbase in competition with other Layer 2 solutions and has the potential to improve the user experience for their customers.
Coinbase, the second-largest cryptocurrency exchange by trading volume, has launched Base, a layer-2 (L2) blockchain that focuses on Ethereum. Jesse Pollak, the director of protocols at Coinbase, revealed this news.
The base will be nurtured within Coinbase but has plans to become fully autonomous in the future. It will operate as the second primary contributor to Optimism’s OP stack and will be powered by it.
Coinbase aims for Base to serve as a gateway for users into the cryptocurrency market by providing access to other L1 networks such as Solana and enabling interoperability with other chains. It will also offer access to Coinbase’s tools, users, and products, along with quick fiat on-ramps and strong acquisition tools. However, Coinbase has no intentions to release a new network token.
Base aims to achieve its objectives of making on-chain the next online and bringing more than one billion people to the crypto economy by housing Coinbase’s on-chain goods and acting as an open platform where anyone can create. Additionally, the network will be open-source, autonomous, and based on the MIT-licensed OP Stack.
The base will use ether as its native asset, and users will pay for gas in ETH, although Coinbase plans to integrate USDC into the network eventually. Coinbase plans for the network to become completely decentralized by 2024 and will construct it entirely in open source.
The news of the new layer-2 (L2) blockchain with Ethereum as its primary emphasis is expected to be welcomed by the community, especially as Coinbase has been facing controversy this year, including a $3.6 million fine in the Netherlands and an ex-manager pleading guilty in the first-ever crypto insider trading case.
