One more chain: Launch of Base | Astha Puri

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Astha Puri
Mar 15, 2023
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One more chain: Launch of Base

The announcement of Coinbase launching its own Layer 2 blockchain, Base, is significant because it signals the increasing popularity and competition among Layer 2 solutions.

L2 blockchains provide cheaper and faster transactions compared to L1s like Ethereum, which is a key factor in their growing popularity. Base will be built using Optimism's OP Stack and will initially be sequenced solely by Coinbase, with plans to decentralize over time.

While other L2s like Arbitrum and Optimism have tokens, Coinbase has no plans to issue a token for Base at this time.

The launch of Base also includes a new fund called Base Ecosystem, which will invest in early stage projects building on the new blockchain.

Coinbase's large user base of 110 million users with $80 billion in assets across the Coinbase ecosystem could make it a significant contender in the Layer 2 space. However, it remains to be seen if Coinbase can attract its users to Base and make it successful, as its recent NFT marketplace has been a flop with low sales volume and waning interest.