Coinbase launches Layer 2 Blockchain with Optimism Token
Ethereum Layer 2 network Base has been launched by Coinbase, the top crypto exchange in the US.
Bitcoin exchange Coinbase unveiled Base – a testnet version of its newly developed Ethereum Layer 2 network. Coinbase is entering the layer 2 space, which offers faster and more affordable blockchain solutions. Coinbase Global’s crypto exchange allows developers to build apps and link to Coinbase Global products easily. The Coinbase layer 2 Base runs on OP Stack, a layer 2 network solution developed by Optimism Network.
A significant rise in buying interest for the Optimism token followed the Coinbase layer 2 launch news. As a sequencer for Base transactions, Coinbase will eventually have a fully permissionless validator set. As Coinbase’s native blockchain, Base will host many of the exchange’s products.
Optimism’s native token OP spiked after the official announcement of Base’s layer-two blockchain. Based on market size, the Optimism token is ranked 75 among all cryptocurrencies. The Optimism token price is currently at $2.88, not far from its all-time high of $3.11.
Ethereum’s scaling may be improved by Coinbase’s layer-2 blockchain
Some market players are excited about Coinbase’s entry into the blockchain world, the second-largest crypto exchange by volume.
Jesse Pollak, Coinbase’s lead for Base and head of protocols, previously told TechCrunch that the exchange launched Base, a layer-2 (L2) blockchain aimed at entering the decentralized ecosystem with its own chain and expanding further into the developer space.
Designed to help developers create dApps on-chain, Base’s L2 chain is a “secure, low-cost, developer-friendly” chain. A Coinbase spokesperson told TechCrunch that a number of crypto businesses, platforms, marketplaces, and infrastructure firms have committed to building on Base.
A number of companies plan to participate, including Blockdaemon, Chainlink, Etherscan, QuickNode, Aave, Animoca Brands, Dune, Nansen, Magic Eden, Pyth, Rainbow Wallet, Ribbon Finance, The Graph, Wormhole and Gelato.
Dmitry Shklovsky, co-founder of QuickNode, which is a partner and node provider for Base, said Base reinforces the importance of L2s in growing the blockchain ecosystem. “We are moving in the right direction when there are more onramps and more developer-friendly L2.”
In order to reduce bottlenecks, constraints, and other network-clogging effects, layer-2 blockchains are built on top of layer-1 (L1) blockchains like Ethereum, Solana, and Avalanche. L2s bundle transactions instead of putting them all on an L1 chain to make task delivery more efficient.
Graph Foundation and Edge & Node spokespeople said L1s like Ethereum are secure, but inconvenient for high-volume transactions because gas fees are prohibitively high. “L2s make the blockchain space more accessible to a broader range of developers and users, allowing cheaper, faster transactions that maintain Ethereum’s security.”
It is essential to have L2s in the space for accessibility and scalability, Shklovsky said. Security and decentralization are typically prioritized over scalability by L1. As L2s reduce the workload on the main chain, they make the network faster and easier to use, allowing chains to scale quickly without compromising security or decentralization.”