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Earlier this year, Coinbase, one of the leading cryptocurrency exchanges, unveiled its very own Ethereum layer-2 network, aptly named ‘Base’.
This development marked a significant milestone in the crypto space, as Coinbase emerged as the first publicly traded company to launch a layer-2 blockchain network on top of Ethereum (ETH).
Beyond being just another layer-2 solution, it stands out with its specific goals and a vision that could unlock the next adoption layer — easy ways for users to interact with crypto in the U.S. and beyond.
It’s been nine months this week since Base was first announced and two months since the first public bridge was opened — so where are we today?
Key Takeaways
- Coinbase introduced ‘Base’ as an Ethereum layer-2 network, making it the first publicly traded company to launch such a network.
- Base distinguishes itself with an open-source, decentralized, and permissionless approach, with extremely low gas fees.
- By encouraging developers and entrepreneurs to build on the platform, Coinbase aims to achieve mass adoption within the Web3 ecosystem.
- The absence of a native token suggests a user-focused strategy.
- Base benefits from Ethereum’s security protocol and combines it with Coinbase’s features, including fiat payment integration.
Base: An Open Ecosystem
Coinbase’s bold declaration that Base is designed to serve as a secure, low-cost, and developer-friendly Ethereum Layer-2 network with the potential to onboard the next billion users into Web3 is nothing short of ambitious.
This aspiration reflects Coinbase’s commitment to shaping the future of the blockchain industry. However, the real question that looms is whether Coinbase can translate this vision into reality.
The key to Coinbase’s strategy lies in the open-source nature of Base. By aiming to keep the network decentralized and permissionless, Coinbase opens the door for anyone with innovative ideas to build upon the platform. This approach is a crucial step towards achieving mass adoption within the Web3 ecosystem, as it encourages developers and entrepreneurs to create innovative applications and services on top of Base.
In the last few months, Base has been on a rapid growth trajectory, boasting over 130,000 active users and securing over $300 million in total value locked (TVL).
This achievement is even more remarkable because ‘Base’ does not intend to introduce a native token for its Layer-2 chain. Instead, Coinbase’s strategy focuses on delivering a seamless user experience and valuable services.
While the absence of a native token aligns with Coinbase’s belief, it also marks a fresh of breath air from the multiple crypto projects that launch tokens only as a way to siphon money from the market.
Coinbase’s Base also benefits greatly from the popularity of Coinbase as a major publicly traded crypto exchange in the U.S. Market watchers opine that Coinbase’s popularity will give Base adoption a boost and enable them to capture a global market.
However, when it’s all said and done, what features make up Base?
Well, Base is built on Ethereum and, therefore, benefits from the security and scalability that comes with Ethereum. Simply put, it takes advantage of Ethereum’s security protocol and combines it with Coinbase’s mainstream features, such as fiat payment integration. These two components make Base a decentralized and dApp development platform that bridges the gap between Web2 and Web3 for the next cohort of crypto users at cost-effective prices.
Another important feature of Base is also the fact that it is cheap with relatively negligible gas fees. This means developers can tap into mainstream markets with dApps that enable fiat-to-crypto payments instantly — and near-zero cost to the end user. This is set to expand the dApp ecosystem and lead to a shift into Web3.
As of now, Base operates as a roll-up agnostic superchain powered by Optimism, further enhancing its efficiency.
No Network Token, No Problem
Interestingly, Base is taking a different approach compared to many other layer-2 networks. Given the wild success of Binance’s BNB on the Binance Smart Chain, many in the crypto space were surprised to learn that Base won’t be introducing a network-specific token.
Instead, Coinbase’s strategy revolves around building excellent products as a means to drive user activity. This approach will very likely bring Base to the top as competition for bandwidth and attention on the Base chain increases.
Key Partnerships and Decentralization Goals
Base is not walking this path alone. It has established strategic partnerships with industry giants like Chainlink and Aave, among others. Coinbase also has ambitious plans for Base’s governance, aiming for full decentralization in the future.
Coinbase’s commitment to Base’s success is evident in its decision to become a core developer on the open-source OP Stack alongside Optimism. This collaboration is poised to bring about significant innovations in Ethereum’s layer-2 ecosystem.
The Bottom Line
In just a short time since its unveiling, ‘Base’ has already made waves as a pioneering layer-2 network. As it continues to evolve and expand, the cryptocurrency community eagerly anticipates the transformative changes it may bring to the world of decentralized finance and applications.
