For several months now, the Layer 2 war has been raging, and Coinbase officially entered it on 9 August, the date on which its Base scalability solution was deployed on the mainnet.
Beyond the stated objective of onboarding "the next billion users and the next million developers on the blockchain", Base has above all enabled Coinbase to find new growth drivers. And from that point of view, the launch has been a success.
In just over 5 months, Base has entered the podium of the layer 2s in terms of total fixed value (TVL) with just under $400 million, behind Arbitrum ($2.35 billion) and Optimism ($820 million). It even made the top 10 across all blockchains, according to data aggregated by DeFi Llama.
Base generated more than $5 million in revenue from transactions made by the more than 390,000 users, according to data aggregated by asset manager 21Shares on Dune Analytics.
These good figures were largely achieved thanks to the launch last summer of the FriendTech social network, whose passing frenzy caused a record number of transactions on Base, peaking at 1.8 million on 14 September and then 1.4 million on 2 October.
But speculation is not the only reason for the success of Coinbase layer 2. "Base has implemented a very comprehensive onboarding system. Unlike other blockchains, it's much easier to deploy. Thanks to this, they managed to mobilise a large community fairly quickly," remarks Mounir Benchemled, CEO of DEX aggregator ParaSwap, which also deployed on Coinbase's layer 2 in September.
A strategic alliance with Optimism
To launch its layer 2, Coinbase has chosen to use OP-Stack, the optimistic roll-up developed by Optimism launched last June.
"Today, OP-Stack is the most developed layer 2 solution. Optimism also offers the advantage of providing a clearer roadmap than its competitors and support for more advanced projects," continues Mounir Benchemled. These are necessarily differentiating arguments for a company with institutional ambitions like the one run by Brian Armstrong.
A few weeks after the launch of Base, Coinbase announced that it shared Optimism's vision based on the principles of a "Superchain", i.e. a network of interoperable layer 2s.
On 24 August, the two companies even announced an agreement to share the revenues generated by Base. In return, Coinbase's layer 2 will be able to receive up to 118 million OP tokens (around $250 million at the current price) over a period of 6 years, allowing it to participate in Optimism's governance.
Profiting from its brand
"Even if Base has had an interesting start, in the long term it will have to find differentiating elements compared with other layer 2 solutions," warns Stanislas Barthélémi, head of blockchain & crypto at KPMG.
Base has a potential user base of over 100 million and the power of a brand that is currently one of the most reassuring on the market in terms of regulation.
"In recent years, Coinbase has spent a huge amount of money on simplifying its user experience as much as possible both for its platform but also for its various products such as Coinbase Wallet. It could do the same for Base and thus secure some interesting traction," continues Stanislas Barthélémi.
There is no shortage of possibilities, especially since USDC, Circle's stablecoin, has been available natively on Base since the beginning of September, in other words without going through a bridge. According to Stanislas Barthélémi, "this integration opens up a huge range of possibilities for everyday payments or cross-border payments at lower cost. Coinbase clearly has a number of levers to pull to make Base viable".
Decentralisation in its sights
In addition to making it easier for its users to access the blockchain, Coinbase has been hammering away in recent months at its desire to decentralise the way Base operates to make it "an open and neutral platform where developers and users can participate freely", explains the company, which for the time being has not revealed a precise timetable.
Once raised as a possibility "at some point in the future" by its general counsel Paul Grewal, the launch of a native token for Base has for the moment been completely ruled out by CEO Brian Armstrong. "We have no plans to create a token for Base", he explained in early December to US media outlet Decrypt.
"It's harder to imagine decentralising a layer 2 without a token", Mounir Benchemled points out. "A token provides more flexibility to set up governance models or incentives to use the protocol," he adds.
It has to be said that the US environment is not necessarily conducive to such a launch, with the Securities and Exchange Commission (SEC) having drastically tightened the regulatory screw on the crypto sector since the fall of FTX. For several months now, the US securities regulator has been tending to consider the majority of cryptos or tokens as financial securities. A reclassification that Coinbase is keen to avoid more than anything.
"Because of this threat and the lack of clarity in the rules, many projects have put their token projects on hold", confides a French entrepreneur who has just spent several months in the United States.
