Coinbase, the second largest crypto exchange, has recently launched a testnet for their newest product “Base,” an Ethereum layer 2 (L2) network. The new product will provide a secure and cost-effective solution for building decentralized applications (dApps) on-chain, per the official announcement.
The proposal from crypto exchange Coinbase is to make on-chain the “next online,” bringing millions of users into the crypto economy. Base will serve as a home for Coinbase’s on-chain products and an open ecosystem where anyone can build and develop new technologies, according to the exchange. The company added:
We’re incubating Base inside of Coinbase, leveraging the last decade of our experience building crypto products, and plan to progressively decentralize the chain over time. We have no plans to issue a new network token.
What Is Coinbase’s Base And How Does Crypto Benefits?
Base is an open source for developers powered by Optimism, an Ethereum-based L2 network supporting the OP Stack, a modular, open-source platform for scalable blockchain interoperability. This open-source protocol allows developers to build blockchains to meet specific user needs efficiently.
According to the exchange, Base is designed to provide easy and secure access to Ethereum L1 and L2 and other ecosystems such as Solana. Layer 2 refers to a secondary framework or protocol built on an existing blockchain. These protocols aim to solve the transaction speed and scaling issues affecting blockchains.
In addition, Base is built with the security and scalability to develop dApps. With the underlying security of Ethereum, along with Coinbase’s practices, users can access Base from Coinbase, Ethereum Layer 1, and other interoperable chains.
Moreover, Base will operate with full Ethereum Virtual Machine (EVM) compatibility, the program that executes Ethereum’s smart contract applications. Base will offer a fraction of the cost of Ethereum’s EVM for securely built multi-chain applications with easy-to-use bridges, according to the announcement:
Base has the vision to be an open ecosystem, seeded with Coinbase products, users, and assets. We’ll work with the broader community to bring the chain to life. We’re thrilled to have an incredible community who will contribute to making Base a robust ecosystem.
Coinbase also announced a foundation for the Base ecosystem, which will support projects built on the L2 network that meet the crypto exchange’s investment criteria. Coinbase concluded:
Our focus is ensuring a successful testnet. In the weeks ahead, we’ll share our roadmap to mainnet and provide more developers resources for building on Base.
COIN shares have rallied since the announcement. COIN opened at $58 per share on the Nasdaq. COIN stock is now up 2.83% in the last 24 hours and is trading at $62.50 per share.
Feature Image from Unsplash, chart from TradingView.