Adam Cochran, partner and professor, is bullish on OP, the native token of Optimism, the layer 2 scaling solution for ethereum.
Taking X, Cochran is convinced OP is undervalued, signaling the importance of Coinbase and the brand it has built over the years as a crypto exchange and investor in multiple products. In 2023, Coinbase supported the development of Base, a Layer 2 scaling solution for ethereum that uses the Optimism infrastructure for its optimistic rollup.
OP will skyrocket due to CoinBase and Base
In making this assessment, the investor highlights Coinbase's broad user base and its ability to potentially drive retail adoption towards Base. And, as mentioned above, since Base uses Optimism, the expected adoption spike will significantly increase OP from current levels.
Cochran maintains that the “discovery power” associated with Coinbase, a brand that facilitates billions of dollars in daily transactions, will be crucial to Optimism's success. This is particularly relevant when looking at OP's prices as you write.
As of this writing, OP is holding steady but is up 220% from the October lows. The token has been on an upward trend, benefiting from the broader cryptocurrency rally. Still, although in an uptrend, OP has not recaptured the 2023 highs of around $4.2.
To make the point, Cochran compares how the BNB chain exploded in the number of active users. In the last bull run, the chain had an active ecosystem of decentralized finance (DeFi) and non-fungible tokens (nft). The popularity and soft landing of the BNB chain is due to the smart contract platform being associated with Binance, the world's largest cryptocurrency exchange.
Furthermore, Solana's success, the partner argues, lends its success to the now defunct FTX. At its peak, FTX pumped billions into funding Solana's development. He was also actively involved in funding some of Solana's active protocols.
The great convergence of support events
Coinbase is currently streamlining its operations and recently stopped supporting bitcoin, Litecoin, and other UTXO tokens through Coinbase Commerce. His focus is on ethereum-compatible tokens, which could give clues that Coinbase Commerce could soon be integrated into Base.
From the protocol level, ethereum plans to roll out upgrades to make transactions on layer 2 platforms even cheaper. The Dencun upgrade is scheduled for March and will see ethereum upgrade as part of its long-term scaling roadmap.
L2Beat data on March 1 sample that Optimism has a total value locked (TVL) of $7.8 billion, about half that of Arbitrum. Meanwhile, Base has been climbing the rankings, with a TVL of approximately $1 billion.
Featured image from Shutterstock, chart from TradingView
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