Is Base, Coinbase’s L2 Network the platform for Web3 adoption?
Coinbase wants to become a platform for mainstream Web 3.0 adoption, Helen Femi Williams writes.
Coinbase launched Base, an Ethereum-focused layer-2 (L2) blockchain, to expand into the developer space last month
The goal with Base is "to bring in billions of users to the crypto economy, so decentralised applications need to be easier, cheaper, and safer to interact with. For this to happen, we need to make it even easier for developers to build these decentralised," said Coinbase.
To achieve this, Coinbase is developing new tools and services to make it easier for developers to create and manage decentralised apps and for users to access them. They are also building features to make it simpler and more secure for users to interact with decentralised and to make the entire process more cost-effective.
Crypto is currently available through Coinbase; however, their products are not written as smart contracts and predominantly use the same application infrastructure used by other Web 2.0 companies, so Base represents a push towards Web 3.0.
"We're designing Base to provide easy, secure access to Ethereum L1, other L2s, and other L1 ecosystems like Solana. We encourage them to start on Base, but go everywhere: we see Base as a "bridge" for users into the crypto economy," said Coinbase.
Adam Boudjemaa, a lead blockchain developer at Polytrade, said this could improve scalability, efficiency, and transaction speeds while reducing gas fees, consequently attracting more mainstream users and developers to blockchain space.
This article discusses Coinbase's vision, how Base can support mainstream Web 3.0 adoption, and how it will compete against its competitors.
What is Base?
Ethereum: Base in an Ethereum L2 chain offering developers a fast, safe, low-cost way to build on the blockchain, making it one of the most popular places for developers to build. Base provides security and scalability that powers decentralised apps.
Empowered by Coinbase: Decentralised apps use Base with Coinbase's tools, users, and products. Developers can serve 110 million+ verified Coinbase users and access $80bn in assets on Coinbase's platform with seamless Coinbase product integrations, easy fiat onramps, and powerful acquisition tools.
Decreased costs: It provides gasless transactions for developer applications with easy APIs for account abstraction and securely builds multichain applications with easy-to-use bridges.
Open source: To develop a standard, modular, rollup agnostic Superchain powered by
Optimism, Base aims to be decentralised, permissionless, and available to everyone.
Coinbase is joining Optimism as a Core Developer and is working to build a thriving developer community around the open-source Optomisim Stack.
Coinbase has also integrated Base with its other products, such as Coinbase Wallet, Coinbase Commerce, and Coinbase Custody, to provide users with a seamless and secure experience when using their products.
Coinbase's "Master Plan"
For Coinbase, Base represents a leap into Web 3.0 as an integral part of Coinbase's CEO Brian Amstrong's 2016 "Master Plan" for a global open financial system and making it easier to enter Web 3.0.
Tyler Nee, a product strategist at Apply Digital, said Base is necessary for onboarding companies because it allows companies to build their decentralised apps, stay in Coinbase's ecosystem, and plug into other aspects such as their NFT marketplace, APIs, and much more.
"Until crypto winter blows over, we won't see an explosion in people who want to invest and open a Coinbase account. It will be non-Web 3.0 companies with large customer bases that help onboard the next 900 million
“So naturally, Coinbase will want to help onboard those companies. Still, none of them currently needs financial services because most of them haven't even built a decentralised application yet," he added.
Optimism Stack is a set of open-source software that includes the Optimism protocol, the Optimism Virtual Machine, and the Optimism API.
Optimism Stack is designed to make building blockchain applications easier, faster, and more secure. It provides a layer of abstraction to make the blockchain more accessible for developers and users. The Optimism protocol is used to coordinate data and transactions between the blockchain and the Optimism Virtual Machine.
In February, Base launched its testnet using the Optimism Stack, this demonstrated rapid progress towards decentralisation.
John Paller, the founder of Opolis, says Base has a strong foundation because it allows users to benefit from Optimism's scalability without compromising the Ethereum network's security. It also enables users to access the features of the Ethereum network, such as smart contracts, without needing to interact directly with the mainchain.
However, Nee has some concerns regarding how safe and secure people's data is when using Optimism Stack.
"One Base is built with Optimism currently, which uses optimistic rollups, not zero knowledge rollups (ZK-rollups), to help the L2 scale. There are tradeoffs such as less security and privacy for higher scalability comparatively,” said Nee.
“Still, ZK-rollups are the new kid on the block, and there's not a lot of developer support, so it makes sense why they chose Optimism for the time being," said Nee.
Optimistic rollups are much easier to implement and provide higher scalability with lower security and privacy. ZK-rollups are more secure and private but can be more challenging to implement and lack developer support, making them a less attractive option for scaling.
Competitive L2 Market
Coinbase will also have to compete with several major players in the L2 market, which host hundreds of decentralised apps. However, Base has a significant advantage in terms of resources, including over 110 million verified users and 245,000 ecosystem partners in more than 100 countries.
"They're competing directly with Polygon, which already has significant traction and big names. It will be interesting to see how they win business and convince others to build on Base instead of Polygon for the infrastructure layer," said Nee.
"Being among the first to become experts in implementing and navigating it will be advantageous for generating business. If Base succeeds and you're one of the first big developers on the platform, people will turn to you for advisory and work," Nee said.
Companies and developers using Base are likely to remain on the platform. It is an opportunity for Coinbase to take advantage of the platform's success and become a platform for the transition to Web 3.0.
The focus for Coinbase is ensuring a successful testnet. In the weeks ahead, they'll share their roadmap to mainnet and provide more developers resources for building on Base.
A key determinant of Base's success will be its ability to build a robust infrastructure for consumers, companies, and developers and help users transition to Web 3.0.
Users will want to take advantage of Web 3.0 technology such as better data privacy, enhanced security, and improved scalability.