Understanding Coinbase’s Layer 2 Solution: Base

Cryptocurrency trading has become increasingly popular in recent years, and Coinbase is one of the biggest players in the market. In this article, we’ll explore Coinbase’s Layer 2 solution, called Base, and how it can help improve the scalability and efficiency of cryptocurrency trading.

What is Coinbase’s Layer 2 Solution?

Base is an Ethereum layer-two (L2) network that offers a secure, low-cost, and developer-friendly way for anyone, anywhere, to build decentralized applications, or “dapps,” onchain. Base is built on Optimism, a layer-two scaling solution for Ethereum that aims to solve the blockchain trilemma by providing interoperability and composability for participating rollups. Base leverages the underlying security of Ethereum, along with Coinbase’s best practices, to enable users to confidently onramp into Base from Coinbase, Ethereum L1, and other interoperable chains.

It is a platform that allows for faster, cheaper, and more scalable transactions on the Ethereum network. Users of Base can make transactions without having to wait for the network to confirm each one. This makes Base perfect for high-frequency trading and other uses.

Why did Coinbase create Base?

Coinbase’s vision is to make onchain the next online and onboard 1B+ users into the cryptoeconomy. To achieve this goal, dapps need to be easier, cheaper, and safer to interact with. For this to happen, developers need an easy and accessible platform to build these dapps. Base is designed to provide easy, secure access to Ethereum L1, other L2s, as well as other L1 ecosystems like Solana. Base also makes it easy for developers to access Coinbase’s products, users, and tools. Seamless Coinbase product integrations, easy fiat onramps, and powerful acquisition tools enable developers to serve the 110 million+ verified users and access $80 billion in assets on the platform in the Coinbase ecosystem.

How does Base work?

Base is built on the OP Stack in collaboration with Optimism, which is an open-source and MIT-licensed framework for building layer-two solutions on Ethereum. Optimism uses optimistic rollups, which are a type of layer-two scaling technique that bundles transactions together and executes them off-chain, while periodically posting proofs on-chain. This reduces congestion and costs on the main chain, while preserving its security and decentralization. Base is one of the rollups that runs on Optimism’s network, along with other projects like Uniswap and Synthetix.

Base offers full EVM equivalence at a fraction of the cost and is committed to pushing forward the developer platform. Developers can set up gasless transactions for their dapps with easy developer APIs for account abstraction, and securely build multichain applications with easy-to-use bridges. Base also supports smart contract languages like Solidity and Vyper, as well as popular development tools like Truffle and Hardhat.

Besides, Base uses a technique called “commit chains” to enable off-chain transactions that settle on-chain. Basically, transactions are put together in groups, checked off-chain, and only then settled on the blockchain. The system becomes faster and more effective as a result of this process, which decreases the volume of transactions that the blockchain must verify.

Benefits of Base:

One of the best things about Base is that it can cut transaction fees by a lot. By grouping transactions together, Base reduces the number of transactions that need to be verified on the blockchain, which in turn lowers the fees for each transaction.

In addition, Base can also help improve the scalability of the Ethereum network. As more people join the market, the network can get crowded, which can make transactions take longer and cost more. 

How can developers get started with Base?

Base’s testnet is already live, and the mainnet is expected to launch in the coming months. Developers can access the Base testnet by following the documentation guides at docs.base.org. Base will also be available on the Coinbase Wallet App. Users can onramp into Base from Coinbase, Ethereum L1, and other interoperable chains.

Base has no plans to issue a new network token. Instead, ETH will serve as the native gas token. Users should be cautious of scammers sending fake Base tokens.

Base has partnered with several projects and platforms that have committed to building and backing the ecosystem, including Blockdaemon, Chainlink, Etherscan, QuickNode, Aave, Animoca Brands, Dune, Nansen, Magic Eden, Pyth, Rainbow Wallet, Ribbon Finance, The Graph, Wormhole, and Gelato, among others.