- Coinbase's Ethereum layer 2 blockchain is latest centralised platform to try and draw DeFi users.
- Base has already attracted $129 million in deposits.
Base, the Ethereum layer 2 blockchain developed by US exchange giant Coinbase, launched its public mainnet on Wednesday with plans to become a become a more decentralised network over time.
Base joins an growing list of Ethereum layer 2 network projects connected to centralised crypto entities. This field already features networks such as MetaMask’s Linea and ByBit’s Mantle.
Network effect
These centralised players are all vying to achieve a significant network effect for their respective chains by adding DeFi users to their existing userbases.
For Coinbase, which has more than 89 million registered accounts, the plan is no different. Coinbase plans to use Base to attract developers and increase users by a factor of 10.
NOW READ: Coinbase’s Base had 24 hours of meme coin frenzy, rug pulls and $58m in deposits
Yet the influx may also bring in bad actors looking to scam unsuspecting users. This was the case with Base before the August 9 release as crypto meme coin speculators started depositing funds on the chain.
Despite the lack of an official bridge, users were able to deposit $58 million between July 30 and July 31. This led to a frenzied 24-hour period that saw several rug pulls, which are crypto scams where token creators suddenly remove liquidity and leave investors holding worthless tokens.
Coinbase said Base is an “open and permissionless system” and that anyone can “build and deploy contracts” on the chain.
NOW READ: Coinbase’s new Base project will ‘tempt users over to DeFi’
“We encourage consumers to do their research diligently before participating in any dapp [decentralised application], on Base or any other chain, just as they would on the open internet,” a Coinbase spokesperson told DL News.
Some crypto commentators stated regulatory authorities could lean on Coinbase to surveil the chain. Such an outcome is seen as being antithetical to DeFi’s ethos.
Coinbase told DL News that it is committed to operate Base as an open and permissionless system.
“Base is incubating at Coinbase with plans to decentralise over time,” the Coinbase spokesperson said.
For others, the rugpulls aside, the frenzied on-chain activity on Base late last month served as a pre-launch promotion for the network.
$129 million in deposits
“It’s a perfect way to promote the Base chain, which, ironically, isn’t as expensive as ads or paying big sums to multiple influencers,” said a representative for TKV Research, an on-chain analytics platform.
TKV Research’s data show investors have already deposited $129 million on the Base chain.
The network’s official bridge went live last week in preparation for today’s mainnet launch. Crypto bridges allow users to transfer tokens across different blockchains and in Base’s case the bridge protocol will enable them to send Ether from Ethereum to the Base chain.
Update, the story was corrected to remove a reference to BNB chain.
To share tips or information about layer 2 blockchains please contact me at osato@dlnews.com.
