The Ethereum community seems bullish on Coinbase’s newly announced layer 2 network Base, described as a “massive vote of confidence” and a “watershed moment” for blockchain networks.
Built on Ethereum and powered by Optimism, a layer 2 network, Base aims to eventually be the network for building decentralized applications (DApps) on the blockchain. According to Coinbase CEO Brian Armstrong, the second layer network is currently in the testnet phase. Members of the crypto community, including Bankless Show host Ryan Sean Adams, see the move as "a huge vote of confidence in Ethereum," which could set a precedent for cryptocurrency companies and financial institutions to use Ethereum as a settlement layer. Choose.
Since its inception in 2012, Coinbase has approximately 110 million verified users and has partnered with 245,000 companies in more than 100 countries. According to data from CoinGecko, its cryptocurrency exchange ranks second in terms of trading volume, behind Binance.
“If Coinbase converted 20% of its 110 million verified users to Tier 2 users over the next few years, that alone would be 10 times the total number of crypto-native users,” Adams added.
Adam also applauds Coinbase for choosing to open source Base, and believes that the new layer 2 network will bring more block space demand to Ethereum.
Meanwhile, Sebastien Guillemot, co-founder of blockchain infrastructure firm dcSpark, said Coinbase made the smart decision to use layer 2 rather than standalone sidechains, noting that "virtually all" cryptocurrency transactions and locks are on ethereum. The above values are all located on layer 2s these days. Ryan Watkins, co-founder of cryptocurrency-focused hedge fund Syncracy Capital, described the news as a “watershed moment” in the ethereum rollup ecosystem in a Feb. 23 tweet. He added that “probably no one is better suited” than Coinbase to bring the next 10 million users and institutions to ethereum.
Not everyone is bullish, though. Gabriel Shapiro, general counsel at investment firm Delphi Labs, explained in a Feb. 23 Twitter thread that the launch of a centralized layer-2 network "opens up" the SEC. The door to unwanted censorship.
Shapiro’s concerns come as the SEC has recently stepped up its enforcement efforts against several stablecoin issuers and staking service providers.
Regarding the launch of Base, the lawyers argued that it could be “a bad step for them” and cause “collateral damage” to the rest of the ecosystem, especially if the SEC finds the vulnerability exposed.
