Coinbase, the preeminent cryptocurrency exchange in the United States, has introduced Base, a layer 2 blockchain, marking a notable step forward in its aspiration to engage with a global audience of 1 billion individuals through decentralized applications (DApps) constructed on blockchain technology.
The inauguration of the public-access network on Wednesday positions Coinbase, a major player in the global digital asset exchange landscape, alongside prominent corporations like IBM and Microsoft, who have previously introduced their own blockchain networks. Base’s launch empowers users to seamlessly transfer Ether between the Ethereum mainnet and Base, expanding Coinbase’s revenue potential by offering a platform for DApps creation and utilization.
Jesse Polak, the creator of Base and Coinbase’s Head of Protocols, emphasized that Base’s establishment is a strategic investment in innovation rather than solely profit generation. Polak stated in an interview with CoinDesk that greater cryptocurrency use cases present avenues for monetization.
Notably, Base has garnered a total value locked (TVL) exceeding $140 million, making it the fifth-largest layer 2 blockchain according to L2Beat, a crypto analytics and research platform. The platform’s successful developer testing phase in July propelled its TVL growth. However, it trails behind top-tier competitors such as dYdX, zkSync Era, and OP Mainnet, while Arbitrum One leads the pack with a remarkable $6 billion TVL, as per L2Beat data.
Coinciding with the Base launch, Coinbase has inaugurated ‘Onchain Summer,’ an extensive multi-week celebration focusing on art, culture, gaming, and community engagement. Esteemed brands, including Coca-Cola, are set to participate in this event.
Simultaneously, the public release of Base aligns with Coinbase’s strategies to mitigate losses amid declining trading volumes. In Q2 2023, the firm managed to reduce its net loss from $1.1 billion to $97 million, as reported by Finance Magnates. Furthermore, Coinbase is engaged in a buyback of a portion of its $1 billion bond, expiring in September 2031, which aims to lower its interest expenses. The buyback is being facilitated by Citigroup’s brokerage arm.