The Ethereum community appears to have taken a bullish view of Coinbase’s newly announced Layer 2 network, Base, which has been described as a “massive vote of confidence” and a “defining moment” for the blockchain network.
Secured on Ethereum and powered by Layer 2 Network Optimism, Base aims to eventually become a network for creating decentralized applications (DApps) on the blockchain. The layer 2 network is currently in its testnet phase, according Coinbase CEO Brian Armstrong.
0/ Hello world.
Meet Base, an Ethereum L2 that offers a secure, affordable, and easy-to-use way for anyone, anywhere to build decentralized applications.
Our goal with Base is to chain the next 1B+ users online and embedded in the crypto economy.https://t.co/Znuu3o3pJw
—Base (@BuildOnBase) February 23, 2023
Crypto community members such as Bankless Show host Ryan Sean Adams believe the move “is a great vote of confidence for Ethereum” that could set a precedent for cryptocurrency companies and financial institutions to use Ethereum as the cloak. liquidation of choice.
2/ This sets a precedent for other cryptocurrency companies to follow, then Fintechs and then banks. Eventually, the world will use Ethereum as a property rights and settlement system.
— RYAN SΞAN ADAMS – rsa.eth (@RyanSAdams) February 23, 2023
coin base it has approximately 110 million verified users and has partnered with 245,000 companies in more than 100 countries since it was founded in 2012. Its cryptocurrency exchange is the second largest in terms of trading volume behind Binance. according to CoinGecko.
“If Coinbase converts 20% of its 110 million verified users to Layer 2 users in the next few years, this alone will increase the total number of native crypto users 10-fold,” Adams added.
Adam also praised Coinbase for going Open Source Base and believes the new Layer 2 network will drive even more demand for block space on Ethereum.
Coinbase just announced that they are launching a layer 2, called Base, on Ethereum and powered by Optimism.
Ethereum is becoming the settlement layer of the world.
— sassal.eth (@sassal0x) February 23, 2023
Meanwhile, Sebastien Guillemot, co-founder of blockchain infrastructure firm dcSpark, suggested that Coinbase made the wise decision to go with a layer 2 rather than a standalone sidechain, noting that “almost all” cryptocurrency transactions and the value locked in Ethereum reside in the layer. 2s these days.
Coinbase announced Base, a new L2 (based on Optimism L2)
L2s continue to dominate the industry
– Almost all txs in crypto are in L2s
– Almost all TVLs in crypto are in L2
– More developers working on L2 than basically on each L1Side chains (non-L2) are a waste of time
— Sebastien Guillemot (@SebastienGllmt) February 23, 2023
Ryan Watkins, co-founder of cryptocurrency-focused hedge fund Syncracy Capital, described the news as a “defining moment” in the Ethereum accumulative ecosystem, in a February 23 Twitter account. mail before opining that “there was probably no one better” positioned than Coinbase to bring the next ten million users and institutions onto Ethereum.
However, not all were optimistic.
Gabriel Shapiro, general counsel at investment firm Delphi Labs explained in a February 23 Twitter post that the launch of a centralized Layer 2 network “opens the door” to unwanted SEC scrutiny.
Related: Coinbase Beats Q4 Earnings Estimates Amid Falling Transaction Volume
“A centralized L2 trading many tokens, any number of which could be purported securities, or doing many DeFi transactions that could possibly be regulated (security swaps, etc.), opens the door for the SEC to make new types of claims. in the secondary market. Shapiro explained, adding:
“In my opinion, this will accelerate the SEC’s “secondary market” agenda regarding blockchain securities issues, because they cannot allow an SEC registrant to “get away with” possible violations and develop a legal arbitration strategy right under the nose of the SEC”.
Shapiro’s concerns come as the SEC has recently increased its enforcement efforts against several stablecoin issuers and staking service providers of late.
Regarding the release of Base, the lawyer opined that it could be a “misstep for them” and could inflict “collateral damage” to the rest of the ecosystem, particularly in the event that the SEC finds a vulnerability to expose:
Overall, if Coinbase’s motives are regulatory in nature, not only is this a bad move for them, but it could threaten dangerous collateral damage to the rest of the ecosystem.
if their motives are regulatory, they should have waited until all the infrastructure can be truly decentralized
— _gabrielShapir0 (@lex_node) February 23, 2023
