Coinbase has launched Base, a project based on Optimism’s OP Stack project for scaling Ethereum. This solution has become the second L2 solution after Optimism’s core network. Base is fully EVM interoperable, enabling engineers to simply transfer legacy apps to the new platform and deploy their EVM code base from Ethereum and any other interoperable blockchain networks to Base.
Base is a cumulative package (rollup) that is open source and based on Ethereum.
Rollups are second-level (L2) blockchains that facilitate first-level (L1) scaling, such as Binance and Ethereum. They aggregate hundreds of transactions and send them to the L1 blockchain as one, which lowers the gas commission to the end customer.
From 9 August 2023, users can connect their main ETH network to Base.
Ethereum has several accumulation packs that have been available for over a year. The two largest accumulation ones, Arbitrium and Optimism, utilize the identical tech, which is the accumulation packets used in Base L2.
What is the cause of the excitement around Base?
Base was created by the cryptocurrency company Coinbase. Along with Binance, Coinbase, is the largest global cryptocurrency platform in the world. The company has performed a decisive role in mainstreaming crypto investing in the US and now operates in more than 100 countries.
The company intends to make Base «networked domain house for products, customers, and resources of Coinbase». The new blockchain is expected to attract leading cryptocurrency developers as they will be able to leverage Coinbase’s vast customer database and asset pool.
Creating a unified network based on OP Stack
OP Stack is a standards-based, open source toolset for building blockchains. The OP Stack is composed of program elements operated and supported by Optimism Collective.
The key goal of OP Stack is to combine different Layer 2 (L2) solutions into a single network. This «superchain» will allow them to utilize common governance mechanisms, protocol updates, connectivity layer, bridges and an open source software engineering stack.
Base is the 2nd variant Layer 2 based utilizing the OP Stack. If the «superchain» is created, decentralized applications based on Base can be easily integrated with it; they will be available to users on multiple blockchains.
What does Optimism Collective represent?
Optimism Collective is a group of developers and businesses that govern and maintain OP Stack. Optimism Collective is headed by the Optimism Foundation. One of the key members of the community is also Coinbase, which is actively developing projects based on OP Stack.
The community wants to finance a community of creators whose products can be used by the entire membership. The Optimism Collective is managed by OP token owners, who are able to submit and vote on proposals. Proposals include grants, protocol updates, treasury allocations, and more.
What are the potential downsides of Base?
To get an objective view of Base, we need to consider the prospective dangers and constraints of this blockchain.
Distributability
The crypto community considers the lack of decentralization to be the most serious problem with Base. At the time of writing, Coinbase was the only sequence node supporting operations on Base. A sequence node is a host which fetches, logs, and reports deals in a summarized form. The sequencer credits a user’s savings account after receiving confirmation of a deposit on a savings contract.
Coinbase said that third parties will be able to provide additional nodes in the future, and clarified that it retains «the discretion to levy and change commissions related to the utilization of the Coinbase Sequencer». The company is also managing Base Bridge, which enables the movement of resources between Ethereum and Base.
Limitations of Optimistic Rollup
One of the most significant constraints of Optimistic Rollup is the latency of the transfer of funds from the accumulation bundle to L1. Rollup presumes that all deals on the blockchain are legitimate, it merges the transactions and sends them to L1 without verification.
The latency operates as a safety function, leaving the accumulator ample period of time to fix fraudulent deals. Referred to as the «validation phase», this delay is when anyone can dispute suspect trades.
Coinbase clarifies, «It usually only takes a few minutes to transfer funds from Ethereum to Base, but this time frame is not guaranteed. Transferring from Base to Ethereum typically took around 7 days».
Dependency on OP Stack
Base is dependent on periodic changes and updates by Optimism Collective. Protocol updates can create risks in the form of bugs, new cyberattack vectors, and failures. Changes can also affect normal Base operations, such as bridges and sequencer nodes.
Key features of Base
Base does not have its own token, gas commission is paid in ETH. Base doesn’t have a management token, in contrast to fellow Layer 2 chains Optimism and Arbitrium, and the main network has been open to developers since mid-July 2023. Base experienced its first fraud case, when the creators of the BALD meme coin stole millions of dollars worth of user funds.
Summary
Coinbase is one of the leaders in the crypto industry.The cryptocurrency exchange, headed by Brian Armstrong, has been instrumental in the adoption of Bitcoin by the masses. Now, by introducing Base, Coinbase looks to go a step further by opening up access to decentralized finance to «one billion customers».
