What can we expect from Coinbase's own son, Layer2 Base?

In 2023, the Layer2 concept will completely explode. As dozens of Rollup Layer2 projects emerge, crypto giants such as Coinbase and ConsenSys have also begun to compete and deploy native Layer2 networks.

Among them, Base released by Coinbase, the largest CEX platform in the United States, has been launched on the test network on February 23, 2023. On May 25, Coinbase announced that the Base main network will be launched soon. Although it did not specify the specific time, it said that relevant updates will be released soon. in progress.

So do you know what Base is? How does it work?

01
What is Base?

Base is a Layer 2 chain developed by Coinbase, the largest crypto CEX in North America. It is built on Optimism, the second largest Layer 2 ecosystem after Arbitrum. Optimism is a Layer2 scaling solution on Ethereum that aims to solve the blockchain trilemma by providing interoperability and composability through Roll-up technical solutions, one of which is Base.

Source: L2beat

Optimism’s long-term goal is to develop into a “super chain” of Layer2 chains ” to promote the expansion of Ethereum. This superchain introduces a shared security model and tools for developers to create and interact with Optimism-compatible layer 2, allowing all chains to work with ordinary wallets.

Coinbase has been cooperating with Optimism for more than a year. The incubated Base is built on Optimism and is an Optimistic rollup chain. It is built on open source technology, and developers may be attracted to partnering with Base as it will unlock access to Coinbase’s large existing non-DeFi native user base.

Simply put, Base is an Ethereum Layer 2 (Layer2) chain that provides a secure, low-cost, developer-friendly way to build on-chain.

02
The development history of Base

From the above we know that Base is a Layer 2 public chain built on Optimism’s OP Stack , incubated by Coinbase. To bring more other Coinbase products, users, and assets into the decentralized crypto economy, Coinbase partnered with Optimism to build Base on the open source, MIT-licensed OP Stack. The development process is as follows:

- 2022-02-23: Coinbase announced the launch of the Ethereum Layer 2 network Base and the establishment of the Base Ecosystem Fund.
- 2023-02-27: Base will integrate Coinbase self-hosted wallet and dApp wallet.
- 2023-03-26: Base Ecological Fund announced four major support directions: stablecoins that can track inflation rates, reputation platforms, limit order book (LOB) platforms, and safer DeFi product.
- 2023-04-01: Layer2 network Base issued a statement stating that it will push Base to the main network in the next few months.
-2023-5-24: Base official website released the "Base Mainnet Roadmap", saying that the five prerequisites that need to be completed before the Base mainnet is launched, the first two have now been completed . Specifically include:

1. Successfully completed the Regolith hard fork in the testnet (completed);
2. Successfully conducted an infrastructure review with the OP Labs team (completed);
3. Optimism successfully completed the Bedrock upgrade;
4. Successfully completed internal and external audits without serious problems;
5. Proved the stability of the test network.

But the official time for the mainnet launch has not yet been announced.

03
Base’s development advantages and potential challenges

According to the official website, Base’s goal is to attract 1 billion users, so what confidence does Base have to issue such a goal? It is not difficult to see through analysis that some of the highlights of Base include:

1. Secured by Ethereum: Base has the security and security required to support decentralized applications. Scalability. It leverages Ethereum's underlying security and Coinbase's practical experience to enable entry into Base from Coinbase, Ethereum Layer1, and other interoperable chains.

2. Powered by Coinbase: Coinbase has a large number of verified users and hosts nearly $100 billion worth of assets. Therefore, Base backed by Coinbase can easily bridge the gap between CeFi and DeFi and bring a large number of users into DeFi.

3. Big features, small cost: Base provides complete EVM compatibility at a very low cost and is committed to promoting the development of the developer platform. Set gas fees for your dapps using a simple developer API for account abstraction, and securely build multi-chain applications with easy-to-use bridges.

4. Open source: Base aims to be decentralized, permissionless, and open to anyone who wants to create a super chain by Optimism.

But there are also potential challenges in the development of Base:

1. The launch of Base may have an impact on Coinbase’s finances. On the one hand, the operation of Base in its initial stage will bring certain costs to Coinbase; but on the other hand, it also shows that Coinbase has an Optimistic attitude (pun intended) towards Base’s order volume. Perhaps this is still a problem for Coinbase. A scalable additional revenue stream, even if it’s a small one at first.

2. Moreover, regulatory issues still exist. Base is unlikely to launch Token when the regulatory environment is uncertain, and specifically reminds in the mainnet release route that there is no plan to issue Token.

In general, Base has more development advantages. We will wait and see whether it can create Dapps that can host 1 billion users in the future.

04
Summary

The launch of Base shows on the one hand that the blockchain infrastructure is gradually improving, and Layer2 is Growing. As a public chain, the biggest challenge Base faces may be its governance model. Previously, Binance, OKX, etc. have developed their own ecological public chains, but they seem unable to surpass the crypto ecosystems such as Bitcoin and Ethereum.

However, Base can add practicality to the DeFi field and can also promote the large-scale adoption of DeFi. It also reflects Coinbase’s choice to bet on decentralized technology and compete with other platforms such as Binance by embracing Layer2. It also reflects Coinbase’s efforts to adapt to different market cycles and improve its value capture capabilities.

What is the future development of Layer2 public chain Base? What can you look forward to? Welcome to leave a message in the comment area.

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