The major US-based crypto exchange Coinbase has announced the launch of its own layer 2 blockchain for Ethereum (ETH) called Base.
Base brands itself as a “secure, low-cost, developer-friendly” way to build decentralized applications (dapps), and will serve as a home both for Coinbase’s own on-chain products and as an open ecosystem for developers.
The exchange announced the launch in a blog post on Thursday, where it also said that Base already now is open for developers on a testnet.
“Our goal with Base is to make onchain the next online and onboard 1B+ users into the cryptoeconomy,” the announcement said. It also explained that Base will be interoperable with other popular Layer 1 blockchains like Solana (SOL), as well as with Ethereum’s base layer and other Ethereum second-layer networks.
Progressive decentralization and no token
The announcement added that although Coinbase is “incubating” the new network, the plan is to “progressively decentralize the chain over time.”
It further made it clear that there are no plans for issuing a native token for the chain, thus challenging a widely held belief that new tokens are somehow necessary to ensure a decentralized protocol or network’s security.
The immediate next step now will be to ensure a successful Base testnet, and then share a more detailed roadmap as well as more developer resources “in the weeks ahead,” the announcement said.
COIN rises
Shares of Coinbase listed on the Nasdaq stock exchange rose by 1.93% for the day yesterday to $62.36 as news of the new layer 2 network was announced. However, the stock slipped by 1.36% in pre-market trading on Friday to $61.51 as of press time.
Coinbase has seen a rebound in its stock price this year along with rising crypto prices. From the beginning of 2023, the stock is up a respectable 85.6% on improved sentiment in the crypto sector.
Coinbase has “unparalleled reach”
Commenting on the launch of Base, Adam Cochran, partner at Cinneamhain Ventures and a contributor to several DeFi projects, said he believes people will be surprised by Base’s feature set. This will be the case even if the network turns out to not be better than existing layer 2 networks like Optimism, he said.
“Tech is important, reach is better,” Cochran wrote on Twitter, while pointing out that Coinbase has “unparalleled reach on both the user side (110M users) and on the partnership side.”
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