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With the Coinbase Base layer-2 network, decentralized applications developers can tap on other EVM-compatible blockchains like Bitcoin and Solana to access more Web3 users.
Coinbase Global Inc (NASDAQ: COIN) has announced a low-cost, developer-friendly Ethereum layer-2 (L2) scaling solution dubbed Base. According to the cryptocurrency exchange, the Ethereum layer-2 scaling solution will first come in a testnet mode, with developers welcome to begin building on top of the network before the mainnet launch. Coinbase has noted that the Base layer-2 network will not have a token for fees and governance purposes, and there are no plans to issue any.
Coinbase Ethereum L2 Scaling Solution
As a starter pack, Coinbase has announced that all its on-chain products will be routed to the Base network. Moreover, the Base layer-2 network will tap on Optimism as a core developer backed by its decade of experience in blockchain technology.
“Base aims to be decentralized, permissionless, and open to anyone with the vision of creating a standard, modular, rollup agnostic Superchain powered by Optimism. We’re joining Optimism as a Core Dev on the open source OP Stack, and working to create a thriving community of other developers,” Coinbase noted.
With the Coinbase Base L2 network, decentralized applications developers can tap on other EVM-compatible blockchains like Bitcoin and Solana to access more Web3 users. Moreover, Coinbase has a mission to help onboard over 1 billion Web3 users through the Base network.
3/ Base will be:
→ The onchain home for @Coinbase
→ An open ecosystem where anyone, anywhere, can build dapps that reach the next 1B+ users
→ A bridge that brings our users onchain and enables them to go anywhere, including L1, other L2s, and ecosystems like Bitcoin & Solana
— Base (@BuildOnBase) February 23, 2023
The Base layer-2 network will be competing with Polygon (MATIC) in onboarding scalable Dapps on the Ethereum network. Nonetheless, the winner will be the Ethereum network, which has been the king of smart contracts since its inception.
Coinbase and the Market Outlook
As the leading cryptocurrency exchange in the United States, Coinbase understands the stakes of digital assets in the country. Moreover, federal agencies including the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), and the Securities and Exchange Commission (SEC) have embarked on a journey to route out ‘rogue’ crypto companies.
The exchange has, on the other hand, decided to take the SEC and the rest of the agencies head on by changing its risk disclosures section, stating that they may determine not to remove a particular crypto asset from Coinbase Spot Market even if the SEC or another regulator alleges that the crypto asset is a security.
Currently, Coinbase lists six of the nine crypto tokens that the SEC alleged were securities last year, including AMP, RLY, DDX, XYO, LCX, and POWR.
Meanwhile, Coinbase shares have gained approximately 76 percent YTD to a market capitalization of approximately $13.89 billion. According to a survey conducted by MarketWatch, 28 analysts gave COIN shares an average rating of HOLD.