San Francisco, November 7, 2023 – Coinbase, a major cryptocurrency exchange, has introduced “Base” as a promising solution to address the challenges of Ethereum’s network congestion and transaction costs. While Ethereum remains a leading public smart contract blockchain, the surge in its popularity has revealed limitations in scalability and cost-efficiency, especially for small transactions. Coinbase’s “Base” aims to enhance transaction speed, reduce costs, and improve the user experience while maintaining the network’s security.
“Base” is a Layer 2 (L2) network designed to alleviate the computational burden on the Ethereum network. This innovative solution, launched in July 2023, has gained early adoption, contributing to Ethereum’s growth.
Expanding Ethereum’s Ecosystem with Base
An analogy can help explain how “Base” operates within Ethereum’s ecosystem. Imagine Ethereum as a bustling boulevard with businesses of all kinds. However, the influx of users has led to traffic congestion and high toll costs, making it challenging for small transactions to occur efficiently. Now, envision a new train system that runs parallel to the boulevard, providing a swift and cost-effective means of transport for users. The train system spreads costs among a larger group, enabling users to pay minimal fees for the convenience of choosing their station. Similarly, L2 networks like “Base” reduce congestion on Ethereum, improving affordability and expanding transactional throughput while maintaining security.
What sets “Base” apart is its unique backing by Coinbase, a well-established public company with over $130 billion in assets on its exchange platform. “Base” offers a suite of tools and infrastructure for developers, including fiat onramps, mobile app integration, and a user-friendly self-custodial wallet. Coinbase aims to simplify the blockchain experience and enhance user interactions with applications through direct in-app integrations.
Strong Momentum and Adoption
Early indications show that L2 networks, including “Base,” have found strong product-market fit. Over 2 million daily transactions are now facilitated by L2 networks, primarily due to their lower transaction costs. For example, “Base” charges an average transaction fee of $0.31 for a $200 USDC stablecoin transfer, marking a 94% reduction compared to Ethereum’s current fee of $5.02.
Within three months of its launch, “Base” has garnered a user base of more than 2.5 million addresses. It has attracted over $565 million in transfers, making it the third-largest L2 network, following Arbitrum and Optimism, which have $6.5 billion and $3 billion in assets deposited, respectively. “Base” primarily caters to a diverse range of applications, focusing on on-chain financial services and innovative social platforms.
Coinbase’s Commitment and Opportunities
Coinbase’s commitment to “Base” strengthens Ethereum’s ecosystem and reduces barriers for users and developers, contributing to the platform’s growth. As “Base” is used, cryptographic proofs summarizing network activity are submitted and settled on the Ethereum network. Coinbase manages this data relay process, generating approximately $5.3 million in profit to date.
Coinbase’s role in ordering transactions and handling fees for off-chain execution positions it to explore new business opportunities. “Base” is poised to become an integral part of Ethereum’s vision, making the ecosystem more accessible and user-friendly.
In conclusion, “Base” represents an acknowledgment of Ethereum’s vision and a significant step toward advancing crypto adoption. It serves as a vital component in enhancing network efficiency and affordability while marking Coinbase’s pioneering role in the industry. Ethereum’s journey towards becoming an integral part of our digital lives takes a significant step forward with “Base.”
