Cryptocurrency Exchange Coinbase has announced the launch of Base, a layer-two (L2) scaling network for Ethereum, with the release of its Base Testnet on Thursday. The company stated that it is currently incubating Base within Coinbase and the L2 chain is expected to become decentralized in the future.
Coinbase’s L2 Scaling Platform Aims To Help Expand The Crypto Economy
Coinbase joins the competition from Ethereum L2 scaling projects such as Polygon, Arbitrum, Optimism, Loopring, Starknet and others by launching an L2 referred to as Base. The firm announced the launch of Base Testnet on Thursday and advised the public to keep an eye out for the mainnet launch.
On Twitter, Coinbase stated, “Base is an Ethereum L2 offering a secure, low-cost, and easy-to-use way for anyone, anywhere to build decentralized applications. Our goal with Base is to onboard the next 1B+ users online and embedded in the crypto economy.”
The code for cryptocurrency exchange Base will be available in open source and will benefit from Optimism’s OP Stack. Coinbase also stated that it is collaborating with Optimism. “We view this toolkit as an open platform that anyone can contribute to, fork, and extend to help expand the crypto economy,” the Coinbase blog post said.
Initially, Coinbase will have more control over Base but its vision is to become more fully permissionless over time. “The platform will progress from a Stage 0 to Stage 1 rollup in 2023 and a Stage 2 rollup in 2024,” the announcement noted. Additionally, the blog post makes it clear that Coinbase “has no plans to launch a new network token.” Though Base is being created as a separate chain, it will be powered by Ethereum and will benefit from Ethereum’s security underpinning.
Coinbase also announced the launch of a Base Ecosystem Fund to help with early-stage projects for Base, as long as they meet the company’s funding criteria. Like many L2 platforms, Base fees will be lower than the cost of transacting on-chain Ethereum. This week, ETH fees have been higher than usual and L2 fees have been increasing. The Arbitrum protocol is an option that allows for lower fees and Ethereum’s daily transactions depend on it.
“Base offers full EVM equivalency at a fraction of the cost and is committed to powering the developer platform for decentralized applications,” the blog post explains Base. Following Coinbase’s announcement, the L2 scaling project Optimism’s native token OP was up 7.4% against the US dollar. Optimism has recently not revealed its plans for upgrading its network until March.
