Crypto exchange Coinbase will launch Base, an Ethereum layer-2 network designed to make developing decentralized applications (dApps) easier, cheaper, and more secure.
On February 23, Coinbase announced the launch of Base, an Ethereum layer-2 network. The project aims to provide simple, secure, and low-cost tools for creating decentralized apps on the Ethereum network.
The Base layer-2 solution was developed based on Optimism’s OP Stack architecture and worked with all of the company’s major products, including Coinbase Wallet. The project doesn’t involve the issuance of a new token and will use ETH for transaction fees.
In its blog, Coinbase described the solution as “a bridge for users into the crypto economy.” According to Coinbase, Base has several key advantages:
- Security. Base will use Ethereum’s basic security and scalability, as well as Coinbase’s best practices, to protect dApps.
- Integration with Coinbase. Base will make it easy to create dApps with direct access to Coinbase’s products, users, and tools.
- Low fees. Base will provide full EVM equivalence with the ability to set up gasless transactions for dApps with easy developer APIs.
- Open source. All Base’s tools will be in the public domain.
Although the development of Base is still in the testing phase, everyone can already try the new L2 solution. To do so, developers can use the RPC testnet endpoint or choose QuickNode, Infura, and Blockdaemon as node providers.
The crypto community reacted positively to the news, highly appreciating Base’s prospects and its potential impact on Ethereum’s popularity. For example, Ryan Sean Adams, Host of The Bankless Show, called the initiative “a massive vote of confidence for Ethereum,” suggesting that Base could increase the use of blockchain as a settlement layer among crypto companies and financial institutions alike. According to Adams, the future use of Base could lead to a significant rise in demand for Ethereum.
Ryan Watkins, Co-Founder of the crypto hedge fund Syncracy Capital, called Base a “watershed moment” for the Ethereum ecosystem. Sebastien Guillemot, Co-Founder of dcSpark, emphasized the popularity of L2 solutions and praised Coinbase for not making their tool just a sidechain. Anthony Sassano, Founder of The Daily Gwei and Co-Founder of ETHhub, said Base would make Ethereum “the world’s settlement layer.”
However, not everyone in the crypto community was so optimistic. For example, Gabriel Shapiro, General Counsel at Delphi Labs, expressed concern that launching a centralized L2 network could attract unwanted interest from regulators, especially the U.S. Securities and Exchange Commission (SEC). He said Base could cause “collateral damage” to the rest of the ecosystem, should the SEC manage to uncover vulnerabilities.
The lawyer’s concerns are primarily related to the regulator’s recent actions. The SEC accused Paxos, an issuer of BUSD, of breaking the law and forced the company to suspend its token minting. The SEC also forced the cryptocurrency exchange Kraken to shut down its crypto staking program.
