In this beginner’s guide, we’ll dive into what is Coinbase Base, how it works, and why it’s important for the future of decentralized finance (DeFi).
Cryptocurrency exchange Coinbase has recently launched a new layer 2 network called Base, built using Optimism’s OP Stack. This network is designed to offer a secure, low-cost, and developer-friendly way for anyone to build decentralized apps or “dapps” onchain.
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. This network is built using Optimism’s OP Stack, a developer toolkit for the Optimism network, which provides a low-cost, secure, and developer-friendly way for anyone to build decentralized applications, also known as “dapps”, on the blockchain.
The layer 2 network is a separate blockchain built on top of the layer 1 blockchain, Ethereum. It reduces bottlenecks with scaling and data and is generally much faster and cheaper than the layer 1 blockchain. Coinbase Base will not be limited to Ethereum; it will also provide easy and secure access to layer 2 networks such as Optimism, as well as other blockchain ecosystems like Solana.
Coinbase is incubating Base inside its platform, leveraging its decade of experience building crypto products, and plans to progressively decentralize the chain over time. Base will allow developers to directly integrate their products with it and provide fiat onramps.
Coinbase is targeting an estimated 110 million verified users and $80 billion in assets on its platform in the Coinbase ecosystem.
Coinbase Base is a new blockchain being developed by Coinbase. It will be built using Optimism Layer 2 technology, which allows for the bundling of multiple transactions into a single transaction on the Ethereum mainnet, reducing gas fees and increasing efficiency.
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.
Why is Coinbase Building Base?
Coinbase is building Base to make it easier, cheaper, and safer for users to interact with decentralized applications (dapps) in the crypto economy. They believe that to bring billions of users to the crypto economy, developers need to be able to build dapps more easily.
Base is designed to be a bridge to the crypto economy for users, with easy, secure access to Ethereum L1, other L2s, and other L1 ecosystems like Solana. Base will be interoperable with other chains, and Coinbase will continue to support as many chains as possible across their products.
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 they see as an open platform that anyone can contribute to, fork, and extend to help the crypto economy scale.
Decentralization is essential for the crypto economy to remain open, global, and accessible to everyone. While Coinbase has begun incubating Base, they are committed to progressing towards full decentralization over the years ahead. With the increased resourcing that Coinbase brings to the OP Stack, they are confident that Base will progress from a Stage 0 to Stage 1 rollup in 2023 and a Stage 2 rollup in 2024.
Base has the vision to be an open ecosystem seeded with Coinbase products, users, and assets. Coinbase will work with the broader community to bring the chain to life and is excited to have an incredible community that will contribute to making Base a robust ecosystem.
What is the Coinbase Base Ecosystem Fund?
The Coinbase Base Ecosystem Fund is an investment fund created by Coinbase to support and invest in early-stage projects building on Coinbase Base. The fund will invest in projects that meet specific investment criteria and have the potential to grow the Base ecosystem.
The fund’s goal is to help accelerate the development of decentralized applications (dApps) on the Base network and increase the adoption of the technology. By providing financial support and resources to promising projects, Coinbase aims to build a thriving ecosystem of dApps that leverage the benefits of layer 2 scaling solutions 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
Coinbase has no plans to issue a new network token for their layer 2 network Base, which is built using Optimism’s OP Stack.
