The Ethereum community seems to have taken an optimistic view of Coinbase’s newly announced Layer 2 network, Basewhich has been described as a “massive vote of confidence” and a “defining moment” for the blockchain network.
Secured on Ethereum and powered by the Optimism layer 2 network, Base aspires to become a network for the creation of decentralized applications (DApps) on the blockchain. Layer 2 network is currently in testing phaseaccording to Coinbase CEO Brian Armstrong.
0/ Hello world.
Meet Base, an Ethereum L2 that offers a secure, low-cost, developer-friendly way for anyone, anywhere, to build decentralized apps.
Our goal with Base is to make onchain the next online and onboard 1B+ users into the cryptoeconomy.https://t.co/Znuu3o3pJw
—Base (@BuildOnBase) February 23, 2023
0/ Hello world. Introducing Base, an Ethereum L2 that offers a secure, low-cost, and easy-to-use way for anyone, anywhere to build decentralized applications. Our goal with Base is to make onchain the next network and embark more than 1 billion users in the crypto economy.https://t.co/Znuu3o3pJw
Crypto community members like Bankless Show host Ryan Sean Adams believe the move “is a massive vote of confidence for Ethereum,” which could set a precedent. for cryptocurrency companies and financial institutions to use Ethereum as the settlement layer of choice.
2/ This sets precedent that other crypto companies will follow, then Fintechs, then banks. Eventually the world will use Ethereum as a settlement and property rights system.
— RYAN SΞAN ADAMS – rsa.eth (@RyanSAdams) February 23, 2023
2/ This sets a precedent that other cryptocurrency companies will follow, then fintechs, then banks. Finally, the world will use Ethereum as a settlement and property rights system
Coinbase has approximately 110 million verified users and has partnered with 245,000 companies in more than 100 countries since its founding in 2012. Its crypto exchange is second in trading volumebehind Binance, according to CoinGecko.
“If Coinbase converts 20% of its 110 million verified users to Layer 2 users in the next few years, this alone will increase the total number of native cryptocurrency users 10-fold,” Adams added.
Adam also praised Coinbase for going open source Base and believes the new Layer 2 network will bring even more demand for block space on Ethereum.
Coinbase just announced that they are launching a layer 2, named Base, on Ethereum and powered by Optimism.
Ethereum is becoming the world’s settlement layer.
— sassal.eth (@sassal0x) February 23, 2023
Coinbase has just announced that it is launching a Layer 2, called Base, on Ethereum and powered by Optimism.
Ethereum is becoming the settlement layer of the world.
Meanwhile, Sebastien Guillemot, co-founder of blockchain infrastructure firm dcSpark, suggested that Coinbase made a wise decision in opting for a Layer 2 rather than a standalone sidechain.noting that “almost all” cryptocurrency transactions and value locked in Ethereum reside at layer 2 these days.
Coinbase announced Base, a new L2 (based on the Optimism L2)
L2s continue to dominate the industry
– Almost all txs in crypto are on L2s
– Almost all TVL in crypto are on L2s
– More devs working on L2s than basically every L1Sidechains (which aren’t L2s) are a waste of time
— Sebastien Guillemot (@SebastienGllmt) February 23, 2023
Coinbase announced Base, a new L2 (based on the Optimism L2)
L2s continue to dominate the sector
– Almost all txs in cryptocurrencies are in L2
– Almost all TVLs in cryptocurrencies are in L2s
– There are more developers working on L2s than basically any L1Side chains (non-L2) are a waste of time.
Ryan Watkins, co-founder of cryptocurrency-focused hedge fund Syncracy Capital, described the news in a Feb. 23 tweet as a “defining moment” in the Ethereum rollup ecosystem.. He added that there is “probably no one better” than Coinbase to onboard Ethereum to the next 10 million users and institutions.
However, not everyone was optimistic.
Gabriel Shapiro, CEO of investment firm Delphi Labs, explained in a February 23 Twitter post that Launching a centralized Layer 2 network “opens the door” to unwanted SEC scrutiny.
“A centralized L2 that trades many tokens, some of which could be alleged securities, or does many DeFi transactions that could be claimed to be regulated (security swaps, etc.), opens the door for the SEC to make new types of claims. aftermarket,” Shapiro wrote.and I add:
“In my opinion, this will accelerate the SEC’s “secondary market” agenda regarding blockchain securities issues, as they cannot allow an SEC registrant to “get away with” potential violations and build a legal arbitration strategy right under the nose of the SEC.”
Shapiro’s concerns arise when The SEC has recently intensified its enforcement efforts against several stablecoin issuers and staking service providers..
As for the launch of Base, a lawyer opined that it could be a “misstep for them” and inflict “collateral damage” to the rest of the ecosystem.especially in the event that the SEC finds a vulnerability to expose:
Overall, if indeed Coinbase’s motives are regulatory in nature, it’s not only a bad step for them, but could threaten dangerous collateral damage to the rest of the ecosystem
if their motives are regulatory, they should’ve waited till all the infra can be really decentralized
— _gabrielShapir0 (@lex_node) February 23, 2023
Overall, if Coinbase’s motives are indeed regulatory in nature, not only is this a bad move for them, but it could threaten dangerous collateral damage to the rest of the ecosystem. If their motives are regulatory, they should have waited until all of the infra can actually be decentralized.
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