Coinbase Unveils Secret Masterplan's Phase 3.5 With Launch Of Layer-2 Blockchain

Coinbase, the world's second-largest centralized cryptocurrency exchange platform by trading volume, has unveiled phase 3.5 of its secret master plan with the launch of its layer-2, Ehereum-based blockchain called the BASE.

Coinbase teased BASE through its official Twitter account when it posted a six-second video showing nothing but a blue circle with the date Feb. 23, 2023, written after the circle disappeared from the screen. While it triggered speculations from crypto Twitter, no one guessed that it is about Coinbase's layer-2 blockchain.

The launch this week is just the testnet of the BASE, which is initially incubated inside the company and is designed to improve data processing speed, lower transaction costs across Ethereum and other blockchains, and allow developers to build other cryptocurrency applications as well as software.

"Our goal is to bring about phase 4 of Coinbase's master plan: to bring a billion users into the crypto economy," said Jesse Pollak, Coinbase lead for Base and head of protocols. BASE's code will be totally open-source, allowing the protocol to preserve the global, critical and permissionless nature of cryptocurrencies.

"We're working with Optimism because we believe this must be decentralized and open to everyone," Pollak said, adding that "doing that in collaboration with others is going to be the path to making that actually happen."

Since Coinbase has no plans to issue a token for the layer-2 blockchain, it will use Ether (ETH) as its native asset, which means users will use ETH for gas fees. Pollak, however, revealed that the company has plans to bring the fully-reserved stablecoin USDC onto the network soon.

"We're designing Base to provide easy, secure access to Ethereum L1, other L2s, as well as other L1 ecosystems like Solana," Coinbase said in its blog.

"We encourage them to start on Base, but go everywhere: we see Base as a 'bridge' for users into the crypto economy. It's an easy-to-use default on-chain experience with access to products on other chains. Along with making Base interoperable with other chains, we will continue supporting as many chains as possible across Coinbase products," Coinbase further said.

BASE's launch is just a part of a long-term plan of Coinbase to "have powerful interoperability between chains."

Pollak said, "Rather than having one chain that's monolithic and requires everyone to be in the same place, we can actually have many chains that work together to scale Ethereum."

Coinbase will partner with several multichain providers during BASE's initial launch, which includes those with Ethereum layer-1 and layer-2 interoperability and layer-1 ecosystems like Solana.