Coinbase to Transfer More USDC Accounts to Ethereum-Based 'Base' Amid Record Transactions
Summary:
Coinbase will transfer more USDC stablecoin customer and corporate accounts to its Ethereum layer-2 blockchain, Base. This move, affecting only Coinbase.com users, aims to manage and safeguard customer assets with reduced fees and quicker settlement times. Despite criticisms around Base's perceived centralization, Coinbase is the sole sequencer currently and plans to gradually decentralize. Launched in August 2023, Base uses optimistic rollups to store transaction information off-chain and push transactions to Ethereum's base layer. Notably, Base hit a record 2 million daily transactions on March 16.
Coinbase is set to transfer a more substantial portion of its customer and corporate accounts in USDC stablecoin to Base, its Ethereum layer-2 blockchain, inaugurated just over seven months ago. On March 26, Coinbase Vice President, Max Branzburg, announced on X that the shift will enable the crypto exchange to manage and safeguard customer resources with decreased fees and expedited settlement periods. The switch only affects users of Coinbase.com, leaving out Coinbase Wallet customers who handle their private keys individually. As it stands, the tokens of Coinbase.com users are kept in a wallet protected by multiparty computation, as maintained by Coinbase. Branzburg emphasized that Coinbase consistently maintains a 1:1 ratio of customer assets and doesn't indulge in lending unless directed. Coinbase's transition on-chain will pave the way for an imminent on-chain financial system, clarified David Hoffman, a co-presenter on the Ethereum-centric show Bankless on March 26, in an X post. Ryan Sean Adams, another Bankless presenter, reckoned the shift would likewise set a trend for cryptocurrency exchanges and banks. However, X user "callmeKappa.algo," is skeptical about the shift, proposing that Base is excessively centralized in its present form. As of now, Coinbase is the exclusive sequencer of Base as per data from L2BEAT, indicating the chain is wholly operated by the exchange. But the company has maintained its aim to gradually decentralize Base. Launched on August 9, 2023, as an Ethereum scaling solution, Base employs optimistic rollups to store transaction data off-chain and transfer transactions to Ethereum's base layer. In October, Coinbase made Base's code open-source, aiming to boost transparency and responsibility while inviting public participation in the project. Currently, Base stands as the fourth largest Ethereum layer 2 by total value locked, at $2.63 billion, trailing behind only Arbitrum, Optimism, and Blast according to L2BEAT. On March 16, Base hit a record high of 2 million daily transactions, and the count of daily new users continues to surge.
Published At
3/27/2024 3:12:26 AM
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