Coinbase, the second largest crypto exchange by trading volume, has launched Base, an Ethereum-focused layer-2 (L2) blockchain, Jesse Pollak, lead for Base and head of protocols at Coinbase, told TechCrunch.
In the past, Coinbase has homed in on the trading and exchange side of its business, but from the utility perspective, it’s still too hard for developers to build useful decentralized applications (dApps) and for users to actually use those things on-chain, Pollak said.
In an effort to expand further into the developer space, Coinbase is building Base to make it “dead easy” for developers to build dApps and for users to access those dApps through Coinbase products, Pollak said. “Our goal is to bring about phase 4 of Coinbase’s master plan: to bring a billion users into the crypto economy.”
The L2 is a “secure, low-cost, developer-friendly” chain that aims to help builders create dApps on-chain, the company stated. Base is built on the MIT-licensed OP Stack in collaboration with the layer-2 blockchain Optimism, which is also focused on the Ethereum chain.
A number of crypto businesses, platforms, marketplaces and infrastructure firms have committed to building on Base, a Coinbase spokesperson told TechCrunch.
Those that plan 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.
“We’ve made an effort to go out to everyone and bring them into this open ecosystem,” Pollak said. “What will be required of us to make this successful is to continue to double down on those values of decentralization, open source and having this be for everyone and a bridge that connects our users into the crypto economy and brings them to places they can go that aren’t controlled by Coinbase but can offer them valuable experiences.”
At the beginning, Base will have comparable fees to Arbitrum or Optimism in the 10- to 50-cent range, with plans for it to drop near 1 cent over the next year, Pollak said. The chain is currently in its testnet phase and doesn’t have a specific launch date for mainnet, but expects it to transpire during Q2 of this year, Pollak said.
While Base is incubated inside of Coinbase, its plan is to decentralize it “in the years ahead,” Pollak said. Team has done “a lot of work over the last six months” to address some of the biggest concerns from others, including how a big centralized company can engage in a decentralized way.
“It’s going to be a journey, but that’s why we’re working with Optimism and why we’re building on an open source technology stack and acting so deliberately in who those stakeholders that we bring into the ecosystem are from day one,” Pollak said.
Coinbase’s goal with Base is to also provide the foundation for developers and users to enable folks coming in, Pollak said. “That’s going to require us making Base as cheap as possible, as secure as possible and as decentralized as possible because that decentralization is a key aspect to enable the openness of the ecosystem.”
The chain will be integrated across Coinbase’s exchange, wallet, NFT marketplace and developer products, and plans to be interoperable with other blockchains in the ecosystem beyond Ethereum, Pollak shared. Base has had conversations with teams building Solana, Avalanche, Polygon and others to work on that vision, Pollak added.
Base is also launching an ecosystem fund in partnership with Coinbase Ventures to make mainly pre-seed investments in builders developing on Base across the crypto ecosystem, Pollak said. “We don’t want to just focus on financial tools, NFTs or gaming; we want it to be welcome to everyone.”