Coinbase has created its Ethereum layer 2 network for building dapps called Base. The Ethereum community greeted Base with great confidence; some say it is a “watershed” moment.
On Feb.23, Coinbase announced Base’s testnet launch:
Our goal with Base is to make onchain the next online and onboard 1B+ users into the cryptoeconomy. In pursuit of this goal, Base will serve as both a home for Coinbase’s onchain products and an open ecosystem where anyone can build.
Initially, Base is highly centralized, but Coinbase has assured this will change over time. Base is built with security and scalability of Ethereum, and is backed by Coinbase, offering users easy access to the exchange’s services. In addition, Base joined Optimism’s OP Stack to become fully open-source and freely available. Coinbase also posted a detailed plan for the future of the network.
Bankless host Ryan Sean Adams said that Coinbase’s decision to go with Ethereum is a great vote of confidence for Ethereum and that it could be an excellent example for other companies to make Ethereum their settlement layer of choice:
Adams adds, “if Coinbase converts 20% of its 110m verified users to Layer 2 users in the coming years, this alone will 10x the total number of crypto native users.”
The market also reacted to the news, with many speculating that Base might issue a native token. Despite Coinbase’s statement that it has no plans to issue a token for Base, investors rushed to buy an asset with a similar ticker. It was the Base Protocol token (BASE), the exchange rate of which grew by 300%. This token has nothing to do with Coinbase’s Base.
As for Optimism’s OP, 24 hours after the announcement, it gained 20%. Now it’s trading at $3.10 with 11.39% growth.
Not all are praising Base. Gabriel Shapiro, general counsel of investment firm Delphi Labs, said in a Feb. 23 Twitter post that launching a centralized layer-2 network “opens the door” for SEC’s further scrutiny:
imo, this will accelerate the SEC’s “secondary market” agenda re: blockchain securities issues, because they can’t let an SEC registrant “get away with” potential violations & build up a legal arbitrage strategy right under the SEC’s nose.
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