The cryptocurrency exchange Coinbase has announced the deployment of Base, an Ethereum layer two (L2) scaling network, after developers launched the Base testnet on Thursday. The company said it is incubating Base within Coinbase and that the L2 chain will progressively decentralize over time.
Coinbase L2 Scaling Platform Aims to Help Scale the Crypto Economy
Coinbase is joining the competition of Ethereum L2 scaling projects, such as Polygon, Arbitrum, Optimism, Loopring, Starknet, and others, by launching an L2 called Base. The company announced the launch of the Base testnet on Thursday and advised the public to stay tuned for the upcoming mainnet launch.
On Twitter, Coinbase stated, “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 crypto economy.”
The cryptocurrency exchange explained that Base will be open-source and will leverage Optimism’s OP Stack. Coinbase detailed it is also collaborating with Optimism. “We see this toolkit as an open platform that anyone can contribute to, fork, and extend to help the crypto economy scale,” Coinbase’s blog post said.
Initially, Coinbase will have more control, but Base’s vision is to become fully permissionless over time. “Base will progress from a Stage 0 to Stage 1 rollup in 2023 and a Stage 2 rollup in 2024,” the announcement noted. Furthermore, the blog post stresses that Coinbase has ‘no plans to issue a new network token.’ While Base will be a separate network, it will be powered by Ethereum and leverage the underlying security of Ethereum.
Coinbase also announced the launch of a Base Ecosystem Fund to support early-stage projects working with Base, as long as they meet the company’s investment criteria. Like many L2 platforms, Base will offer lower fees than the cost to transact onchain with Ethereum. This week ETH fees are higher than usual, and the L2 protocol Arbitrum, which offers lower fees, outpaced Ethereum’s daily transaction count.
‘Base offers full EVM equivalence at a fraction of the cost and is committed to pushing forward the developer platform,’ the blog post describing the L2 Base explains. After the Coinbase announcement, the native token of the L2 scaling network Optimism, OP, rose 7.4% against the U.S. dollar. Optimism has recently revealed its plans to upgrade its network in March.
When Coinbase launched the Base testnet, people on social media complained about a bumpy start. Coinbase Web3 developer Roberto Bayardo explained that the issue was fixed and noted that a lot of people were bridging. ‘We’re submitting the contracts for verification now,’ Bayardo added.