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In this beginner’s guide, we’ll dive into Coinbase Base. We will explain what Coinbase Base is, how it works, and why it’s important for the future of decentralized finance (DeFi).
Recently, Coinbase, a leading cryptocurrency exchange, introduced Base, a layer 2 network developed using Optimism’s OP Stack. Base aims to provide a secure, cost-effective, and user-friendly platform for building decentralized apps (dApps) on the blockchain.
Coinbase plans to leverage its experience building crypto products over the past decade to incubate Base inside the company and progressively decentralize the chain over time.
What is Coinbase Base?
Coinbase, one of the leading cryptocurrency exchanges in the world, has launched a new layer 2 network called Coinbase Base. Built on Optimism’s OP Stack, Coinbase Base is a layer 2 network offering a cost-effective, secure, and user-friendly way to develop dApps on the blockchain. Layer 2 networks, like Base, improve upon Ethereum’s layer 1 blockchain by enhancing speed, reducing costs, and resolving scaling issues.
Coinbase Base will support not only Ethereum but also other layer 2 networks like Optimism and blockchain ecosystems such as Solana. By incorporating Base within its platform, Coinbase utilizes its extensive experience in crypto products and will gradually decentralize the chain.
Developers can directly integrate with Base and access fiat onramps. Targeting Coinbase’s ecosystem with 110 million users and $80 billion in assets, Base is set to make an impact.
Why is Coinbase Building Base?
Coinbase Base is being built using open-source software and will be fully available to everyone. Coinbase is working with Optimism to build Base on the MIT-licensed OP Stack, which is an open platform that anyone can contribute to, fork, and extend to help the crypto economy scale.
Using Optimism’s OP Stack, Coinbase Base enhances Ethereum’s layer 1 blockchain by boosting speed, lowering costs, and addressing scalability. Supporting Ethereum and other layer 2 networks like Optimism and ecosystems like Solana, Base leverages Coinbase’s crypto expertise for gradual decentralization.
Developers can integrate with Base for fiat onramps, targeting Coinbase’s 110 million users and $80 billion in assets. Decentralization is crucial for an open, global, and accessible crypto economy. Coinbase commits to advancing Base’s decentralization, expecting a Stage 1 rollup in 2023 and Stage 2 in 2024.
Base aims to be an open ecosystem with Coinbase products, users, and assets. Collaborating with the wider community, Coinbase seeks to create a robust Base ecosystem with community contributions.
What is the Coinbase Base Ecosystem Fund?
The Coinbase Base Ecosystem Fund was created by Coinbase to support and invest in early-stage projects building on Coinbase Base. This investment fund focuses on projects that meet specific criteria and have the potential to expand the Base ecosystem. Aiming to speed up Dapp development on Base and boost technology adoption, Coinbase offers financial support and resources to promising projects that utilize layer 2 scaling benefits like Base.
Coinbase Base Social Channels
What is Coinbase?
Coinbase is a popular cryptocurrency trading and investing platform that allows users to buy, sell, and exchange over 200 tradable cryptocurrencies, including popular coins such as Bitcoin, Ethereum, and Dogecoin. With over 108 million users and over $80 billion in assets on the platform, Coinbase is one of the largest cryptocurrency exchanges in the world.
Coinbase was founded in 2012 as a place to send and receive Bitcoin, but it has since grown to support dozens of unique cryptocurrencies. Coinbase operates in over 100 countries, and customers trade approximately $159 billion per quarter.
Coinbase also provides a standalone Coinbase wallet to store digital assets securely. Some of the most popular cryptocurrencies available on Coinbase include Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Solana (SOL), Polkadot (DOT), USD Coin (USDC), Dogecoin (DOGE), Uniswap (UNI), Litecoin (LTC), Shiba Inu (SHIB), Stellar Lumens (XLM), and Polygon (MATIC).
What is Optimism?
Optimism is a layer 2 scaling solution for Ethereum that aims to address issues like high transaction fees and slow processing times. It uses a technology called Optimistic rollups, which bundle data about hundreds of transactions into a single transaction on the Ethereum mainnet.
This reduces the transaction fee required to pay, making transactions faster and more cost-effective. Optimistic rollups assume transactions are valid until proven false and allow potentially invalid transactions to be challenged by submitting a “fraud-proof.” Optimism reimburses the gas needed to run the computation of the fraud-proof.
The platform is governed by its eponymous token, OP, which gives holders participation rights in The Optimism Collective, a two-tier governance system composed of Token House and Citizens’ House. OP tokens were airdropped to early Optimism users. Optimism is the second-largest Ethereum layer 2 and is becoming increasingly popular along with other layer 2s like Arbitrum and Polygon.
How Does Optimism Work?
Optimistic rollups bundle data about hundreds of transactions into a single transaction on the Ethereum mainnet (layer 1), which significantly reduces the blockchain transaction fee required to pay.
Transactions are assumed to be valid until they are proven false, or in other words, innocent until proven guilty. There’s a time window during which potentially invalid transactions can be challenged by submitting a “fraud-proof” and running the transactions’ computations with reference to available state data. Optimism reimburses the gas needed to run the computation of the fraud-proof.
What Are the Benefits of Optimism?
Optimism offers several benefits to Ethereum users, including faster transaction processing times, lower transaction fees, and improved network scalability. With Optimism, users can execute transactions with greater speed and efficiency, making it easier and more cost-effective to use decentralized applications (dApps) and other Ethereum-based services.
Conclusion
Coinbase Base represents a significant step forward in the world of cryptocurrency, thanks to its use of Optimism Layer 2 technology. By creating a new blockchain that leverages the speed and efficiency of Optimism, Coinbase is setting itself up to be a major player in the digital asset space.
With Coinbase’s expertise in the cryptocurrency market and the innovative technology of Optimism, Coinbase Base has the potential to revolutionize the way we use and interact with digital assets. As more investors and traders turn to digital assets as a way to diversify their portfolios, platforms like Coinbase Base will become increasingly important, offering a secure and efficient way to buy, sell, and exchange digital assets.
FAQs
Will Coinbase issue a new network token for Base?
Coinbase has no plans to issue a new network token for their layer 2 network Base, which is built using Optimism’s OP Stack.
