Coinbase’s layer-2 blockchain could help expand the scaling of Ethereum
Coinbase, the other largest crypto exchange by trading volume, is diving into the world of blockchain in a move that some market players are excited about.
On Thursday, the exchange launched Base, an Ethereum-focused layer-2 (L2) blockchain, in an effort to enter the decentralized ecosystem through its own chain and expand further into the developer space, Jesse Pollak, head of Base and head of protocols at Coinbase previously told TechCrunch.
Bases L2 is a “secure, affordable, developer-friendly” chain that aims to help developers create on-chain dApps, the company stated. A number of crypto businesses, platforms, marketplaces and infrastructure firms have committed to building on Base, a Coinbase spokesperson told TechCrunch.
Those planning to be involved include Blockdaemon, Chainlink, Etherscan, Quicknode, Aave, Animoca Brands, Dune, Nansen, Magic Eden, Pyth, Rainbow Wallet, Ribbon Finance, The Graph, Wormhole and Gelato, to name a handful.
“The launch of Base reinforces the importance of L2s in expanding the blockchain ecosystem,” said Dmitry Shklovsky, co-founder of QuickNode, a partner and node provider for Base. “More hits and fairer, developer-friendly L2s are important health indicators that we’re moving in the right direction.”
L2 blockchains build on top of layer-1 (L1) blockchains such as Ethereum, Solana, and Avalanche in an effort to reduce bottlenecks, throttling, and other network congestion effects. Instead of putting each transaction on an L1 chain, L2s aggregate transactions so that tasks can be delivered more efficiently.
L1s like Ethereum are secure but impractical for high-throughput volumes due to prohibitively expensive gas or transaction fees, spokespeople from The Graph Foundation and Edge & Node said in an email to TechCrunch. “L2s make the blockchain space more accessible to a wider range of developers and users alike, allowing cheaper, faster transactions that still benefit from the security of L1s like Ethereum.”
L2s are critical to availability and scalability in space, Shklovsky said. “L1s typically prioritize security and decentralization over scalability. L2s reduce the workload on the main chain, making the network faster and more user-friendly, allowing chains to scale quickly without sacrificing decentralization or security.”
Expand the L2 space
The base is built on the MIT-licensed OP Stack in collaboration with the layer-2 blockchain Optimism, which is also focused on the Ethereum blockchain. “Optimism is not a competitor [to Base]but rather a collaborator,” Shklovsky said.
The Optimism stack is open source and trusted by many in the web3 space, spokespeople for The Graph and Edge & Node said. “This demonstrates the positive buzz and collaborative spirit of web3, as opposed to the competitive landscape that has become the norm in web2. When developers build in the open, everyone benefits without having to reinvent the wheel from scratch every time a new technology be created.”
