The main topic is the launch of Coinbase's layer-2 blockchain Base's mainnet to the public on August 9. Key points include:
- Base has been operating on the testnet since late February and launched its "builder only phase" in mid-July.
- Users can start bridging their funds onchain to mint NFTs and experience Base.
- Base will kick off its Onchain Summer initiative, partnering with consumer brands like Coca-Cola and Atari.
- Base has seen over $68 million worth of ether bridged to the network and over $200 million in trading volume and transactions.
- The blockchain is partnering with Prop House to offer grants to builders building on Base.
- Onchain activity is growing quickly.
Cryptocurrency exchange Coinbase is acquiring a minority stake in Circle Internet Financial, dissolving their partnership and bringing the stablecoin USD Coin fully in-house, while also adding native support for USDC on six additional blockchains, bringing the total to 15.
Despite the bear market, Ethereum layer-2 solutions like Optimism, Arbitrum, and Base are thriving, with increased traction and healthy fundamentals, according to analytics firm IntoTheBlock.
Base, the Layer 2 scaling solution from Coinbase, has experienced a significant increase in transactions per second (TPS) due to the trend called Friend.tech, according to CEO Brian Armstrong. Base's TPS has exceeded that of Ethereum, with a TPS value up by over 75% in the past week, making it a major L2 protocol to watch out for.
Uniswap, the leading decentralized exchange, has surpassed Coinbase in spot trading volume in 2023, processing around $110B worth of trades in Q2 compared to Coinbase's $90B, showcasing the resilience of decentralized protocols during the crypto bear market.
The cost of executing transactions on Ethereum's blockchain has reached its lowest point since December, indicating the increasing popularity of scaling solutions such as Friend.tech built on Coinbase's L2 chain, which has contributed to the decline in fees.
Coinbase's stock experienced a significant surge after a federal judge ruled in favor of Grayscale in their SEC dispute, leading to hopes of a potential Bitcoin ETF and increasing the value of COIN by over 15%.
The implementation of layer-2 projects, including Coinbase's Base, on Ethereum has led to a significant decrease in transaction fees and congestion on the network, even during periods of high activity such as the recent explosion of the Friend.tech crypto craze.
Coinbase CEO Brian Armstrong shared ten emerging ideas in the cryptocurrency space that excite him, including the creation of a CPI-linked stablecoin, on-chain reputation systems, on-chain advertising, and decentralized labor markets.
Coinbase's layer-2 solution, Base, experienced four security incidents shortly after its launch, resulting in the loss of $15.8 million in cryptocurrencies in August.
Coinbase's Ethereum layer-2 network Base experienced its first major outage, lasting for 43 minutes, due to a delay in block production, highlighting the potential risks of using layer-2 networks compared to Ethereum's mainnet.
Cheap and speedy layer 2 rollup networks like Arbitrum, Optimism, and Coinbase's Base are gaining popularity as alternatives to the congested Ethereum network, but concerns arise over the centralized nature of their sequencers, which could pose risks such as transaction censorship and system failure. However, experts argue that the bigger security concerns for layer 2 networks lie elsewhere, such as the lack of fraud proofs and escape hatch mechanisms.
Coinbase CEO Brian Armstrong discusses the company's base layer 2 blockchain network, interest in flatcoin, and the need for regulatory clarity in the crypto industry, suggesting that the courts, congress, and the CFTC could provide clarity and that there could be a new SEC chair in 2024.
Crypto exchange Coinbase has confirmed its decision to integrate the Lightning Network, a layer 2 payment protocol, in order to enable faster and cheaper Bitcoin transactions and compete against newer cryptocurrency projects.
Coinbase has reportedly earned a $1 million profit from the $73 million Curve exploit in July, but has refused to refund victims, highlighting the tension between the decentralized nature of blockchain finance and the lack of recourse for crypto theft.
Coinbase's layer 2 blockchain Base has achieved a record-high number of daily transactions driven by the decentralized social network platform Friend.tech, while the sale of tokens held by bankrupt exchange FTX will not cause a market shock due to controlled liquidations, according to Coinbase.
Coin Metrics' latest report shows that Coinbase's revenues have diversified away from trading fees, now accounting for 77% of total revenues, as other business lines like subscription fees and wallet services contribute an increasing share. However, Coinbase's growth is limited due to its high trading fees and dependence on the U.S. market, making its future uncertain.
Coinbase, the largest cryptocurrency exchange in the United States, holds around $25 billion in Bitcoin reserves, a sum comparable to the holdings of Bitcoin's enigmatic founder, Satoshi Nakamoto.
Coinbase is looking to diversify its revenues, but for now, it remains heavily reliant on Bitcoin trading.
Coinbase's blockchain, Base, has quickly become a major player in the Ethereum-based layer-2 chain space, hosting numerous decentralized projects and seeing a high volume of transactions and new addresses, with the goal of bringing a billion users on-chain within this decade. The company aims to drive mainstream adoption by reducing costs, improving user experience, and developing better identity infrastructure, and believes that blockchain technology is moving from a speculative phase to one focused on utility for everyday people.
Decentralized social media platform Friend.tech, built on Coinbase's layer-2 protocol, has experienced significant growth in revenue and total value locked, proving critics wrong who predicted its failure.
Ethereum's Layer-2 networks accounted for the majority of transactions in Q3, driven by the launch of Base and the popularity of Friend.tech, according to Messari's State of Ethereum report, with Base's growth exceeding expectations and highlighting the potential impact of new apps on blockchains. However, the report also notes that interest and enthusiasm in the market remain low due to the bear market.
Ethereum's Layer-2 networks dominated transaction activity in Q3, accounting for 61% of all transactions and driven by the launch of Base and the popularity of the Friend.tech social token platform.
