Coinbase Launches Base Network L2 With Optimism To Make “Onchain the New Online”
Making “onchain the new online”. That’s the vision behind leading US crypto exchange Coinbase’s surprise announcement recently that it is building its own new layer-2 chain called “Base” on the Optimism (OP) stack.
Coinbase launched Base not to replace its centralized exchange, but to rather onboard the next billion users to crypto in a decentralized way, and this requires a fast, secure, and low-cost platform for developers to build, test, and deploy decentralized applications (Dapps). It’s clear that they have a long and ambitious roadmap ahead, as this week they also unveiled a new Wallet-as-a-Service offering.
In addition to its compatibility with Ethereum, ETH layer-2s (L2s) like Optimism, and other alternative layer-1s like Solana, Base will also support the use of Chainlink’s price feeds, which will enable developers to access accurate price data, critical for building DeFi applications.
The Base network is being built using Optimism‘s OP Stack, which allows for quick and cheap L2 transactions on Ethereum, and with the support of blockchain companies such as oracle network Chainlink, Ethereum block explorer Etherscan, and DeFi protocol Aave. To learn more about Optimism (supported by CoolWallet) and other optimistic rollups such as Arbitrum, check out our blog.
Warning: Coinbase has no current plans to introduce a token for the Base network, so be careful of existing or new scam tokens with that coin trying to fool you with the $BASE ticker- it’s not Coinbase’s token.
Got it? Let’s move on. This guide will provide a comprehensive guide to the Base network, including what it is, why it is important, why Coinbase chose Optimism, when Base will launch, and other relevant information.
What is the Base Network?
The Base network is Coinbase’s decentralized Ethereum layer-2 network that provides customers with a safe, affordable, and developer-friendly means to create Dapps and exchange value.
BASE uses Optimism’s OP Stack, a scaling solution built on Ethereum, which allows for quick transactions and lower fees. Its compatibility with Ethereum, Ethereum layer-2s like Optimism, and other chains like Solana make it an attractive choice for developers from these chains to deploy on Base.
Why did Coinbase create Base?
According to a blog post from Coinbase, the company decided to launch Base for three following reasons:
- to accelerate the development of its on-chain products,
- to bring its customers into the crypto economy,
- and to increase its investment in core crypto infrastructure.
Moreover, Coinbase aims to onboard a billion new users to the crypto, no small feat, and introduce an on-chain system for its exchange through Base. Base is also developer-focused and built on Ethereum, powered by Optimism’s tech stack, and designed to be compatible with Ethereum, Ethereum layer-2s like Optimism, and other alternative layer-1s like Solana.
In addition, Base is an Ethereum layer-2 sandbox for decentralized applications that allows developers to build, test, and deploy their applications on a fast, secure, and low-cost platform.
In their own words:
“Our goal with Base is to make onchain the next online and onboard 1B+ users into the crypto economy. In pursuit of this goal, Base will serve as both a home for Coinbase’s onchain products and an open ecosystem where anyone can build.
We’re incubating Base inside of Coinbase, leveraging the last decade of our experience building crypto products, and plan to progressively decentralize the chain over time. We have no plans to issue a new network token.”
Why is the Base Network Important?
The Base network is significant because it aims to address the scalability issues of Ethereum. Currently, the Ethereum network can only handle around 15 transactions per second, making it difficult for decentralized applications to scale effectively.
By using the Base network, developers will be able to create decentralized applications that can handle higher transaction volumes and lower fees, thus increasing the adoption of decentralized finance (DeFi) applications.
Base also helps Coinbase to decentralize its operations more, an important consideration since US regulators have been cracking down more on centralized American crypto exchanges and custodians such as Kraken for a variety of reasons, including the coordinated “Chokepoint 2.0” regulatory push and the FTX bankruptcy.
With Base, Coinbase puts the power of crypto not only in the hands of its customers to manage their own crypto assets, but also to draw and onboard millions of new users to our sector, by making crypto usage ubiquitous and effortless.
Why Did Coinbase Choose Optimism?
Coinbase chose Optimism because it believes it offers several advantages over other scaling solutions. Optimism’s OP Stack is built on Ethereum, making it compatible with Ethereum and other Ethereum-based networks. Additionally, Optimism’s rollup technology aggregates multiple transactions into a single transaction, reducing gas fees and increasing transaction speed. By choosing Optimism, Coinbase is demonstrating its commitment to improving Ethereum’s scalability and increasing the adoption of DeFi applications.
They’re also joining Optimism as a Core Dev on the open-source OP Stack to help advance its technology and build a thriving community of other developers.
What makes Base different from other chains?
Coinbase believes that Base will fulfill an important role in the crypto space and differentiate itself from other reasons thanks to the following:
- Base prioritizes security and scalability for DApps, using Ethereum’s security and Coinbase’s best practices to enable safe onboarding from various chains.
- Base provides easy access to Coinbase’s products, 10+ million users,$80B assets and tools for developers, with seamless product integrations and powerful acquisition tools.
- It offers gasless transactions, the ability to build easy-to-use bridges for multichain applications, and cheaper “full EVM equivalence” (equality)
- Base is decentralized, permissionless, and open for anyone interested in creating a modular, rollup agnostic Superchain powered by Optimism, with a focus on building a thriving developer community.
- Its Base Ecosystem Fund will invest in and support early-stage projects building on Base that meet their criteria. Interested parties can apply here.
When Will Base Launch?
The Base network, which is incubated inside Coinbase, entered its testnet phase on February 23, 2023, soon after its unveiling. Coinbase has not yet announced a launch date for the mainnet, but developers can access the testnet to start building Dapps on the network.
Final thoughts
In summary, Base is Coinbase’s new layer-2 chain that is being built on the Optimism stack and aims to onboard a billion users and help scale Ethereum. By using the Base network, developers will be able to create Dapps that can handle higher transaction volumes and lower fees, thus increasing the adoption of DeFi applications.
Coinbase’s announcement is very significant as it’s so influential in the sector and fulfills a leadership role, especially in the United States where crypto regulation is vague and it seems regulators are often out to get the industry and put the crypto genie back in its bottle.
With Base, Coinbase is taking its 110 million users and 80 billion USD in assets to crypto’s grassroots, which runs on transparency, immutability and true decentralization.
By choosing Optimism’s technology, Coinbase is aligning its future to a large degree with that of Ethereum’s, choosing to back the “world’s computer” to build the future of digital finance together. This doesn’t mean other L1s like Solana or Avalanche and L2 chains like Arbitrum are dead in the water- quite the opposite.
With ZK rollups considered to be superior in technological terms to optimistic rollups and a number of them such as Polygon’s ZK-EVM, Starknet and ZKSync rolling out in 2023 and/or launching tokens, the battle is just getting started, which in the end might just resemble an Olympic Games of cryptocurrencies rather than a World Cup where everyone’s chasing the same ball.
If successful, Coinbase will hopefully onboard millions of new users to the wonderful world of decentralized finance (DeFi), on-chain transactions, and most importantly, self-custody.
It might be more difficult than they think to convince diehard crypto HODLers who have always self-custodied their crypto to suddenly start trusting a centralized exchange that is also a listed company in the US and therefore subject to the whims of regulators. Especially if they’re already also indicated that they’ll be integrating anti-money laundering (AML) measures into it. There’s also the chance that if they grow too big, the US government might try to “Libra” them like the doomed Facebook coin. Then again, even Amazon is now rumored to be launching its own token.
Whether Base succeeds or not, Coinbase should be commended for this forward-thinking action, and for trying to undo some of the damage that FTX and other rotten apples did to our trust in the space.
So what about that potential $BASE coin one day then you ask?
Well, 2 things:
1: a fully decentralized public blockchain in almost all cases needs a native asset to incentivize its network users to use, transact on it and eventually govern it. While ETH can be used for gas fees, we can probably just look at Optimism’s OP token and other L2s’ eventual coin creations to wager a guess on which way the wind will eventually blow.
2: What you can be sure of is that if the coin $BASE (or COIN?) ever does launch, your favorite hardware wallet and Web3 wallet app will try its best to support it ASAP. CoolWallet always supports the best crypto assets out there, and with our CoolWallet Pro and new Web3-friendly HOT wallet (free to download), it’s easier than ever.
Any more questions? Then watch this excellent Bankless interview below with Jesse Pollack, Coinbase’s Director of Engineering on Base.
OK, that’s all for now. Hope you enjoyed the article and uhmm… let’s touch Base later
Written by Werner Vermaak for CoolWallet blog.
This article is not financial advice in any way, and for educational and entertainment purposes only. All opinions are that of the author.
The post Coinbase Launches Base Network L2 With Optimism To Make “Onchain the New Online” appeared first on CoolWallet.
Text source: News – CoolWallet
