Coinbase has announced the testnet launch of Base, an Ethereum Layer 2 protocol and brushed off rumors of a new coin.
Yesterday, a cryptic tweet from Coinbase sparked excitement and speculation among the community. Some believed that Coinbase was launching a new token. But today, the exchange cleared the air by announcing an Ethereum Layer 2 protocol – called Base. The company further clarified that they have no plans to issue a new network token.
Base – a Secure, Low-Cost, and Developer-Friendly Protocol
Coinbase has partnered with Optimism to utilize its MIT-licensed OP Stack for Base. The company will build its future on-chain products on Base, and the L2 protocol will be open for others to build. The protocol will leverage upon the Coinbase exchange to make the fiat on-ramp seamless.
Base aims to onboard over a billion internet users into Web3. For that, the company believes it needs to be a bridge to Web3, not an island. The users will be able to securely interact with not just Ethereum but also with other Layer 2s and Layer 1 protocols.
The announcement reads, “We encourage them to start on Base, but go everywhere: we see Base as a “bridge” for users into the crypto economy.”
Coinbase also announced the “Base Ecosystem Fund” to help early-stage projects building on Base. Base is incubated inside Coinbase, but the company wants to decentralize the chain gradually.
Can it Compete With Other Established Layer-2s?
Base wants to onboard over a billion new users to Web3. But how will users choose Base over existing chains such as Polygon or Arbitrum?
According to Dune, Polygon had 282,049 active users on Wednesday, and Arbitrum had 135,483 users. While Optimism, the partner of Base, had just 44,824 users.
In terms of onboarding new users, Optimism onboarded 3,984 new wallets on Wednesday. By contrast, Polygon and Arbitrum onboarded nearly 10 times more, 38,221 and 39,839 respectively.
Whether Base overthrows the dominance of Polygon, Arbitrum, or other chains, awaits to be seen.
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