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Coinbase recently announced Base, its own Ethereum Layer 2 solution that offers a safe, low cost, developer friendly alternative to the Ethereum mainnet.

Through the prior bull market, we saw alternative Layer 1 blockchains arise with Binance Smart Chain being among the most prominent. Thanks to Binances 90 million users, Binance Smart Chain saw incredible growth through 2020 and 2021.

With direct access to Coinbases 110 million users, Base has the potential to capture an even larger market than Binance Smart Chain. At its peak, Binance Smart Chain attracted tens of billions of dollars in digital assets. Importantly, Coinbase has the ability to take learnings from other layer 1 blockchains and apply them to Base.

Heres what Base says about where the cryptoeconomy is headed.

Coinbases Base is an Ethereum optimistic rollup that runs computations off-chain and posts transaction results onto mainnet. By reducing the amount of data that needs to be processed on-chain, optimistic rollups can reduce fees by over 100x. Besides reducing gas fees, the rollup increases transaction speeds and maintains the decentralization and security of Ethereum blockchain.

Base is built via Optimisms open source OP stack, which means it is fully EVM compatible, allowing Ethereum applications to be directly imported onto Base. The network announced dozens of applications that Base will launch with, including Aave, Infura, and Chainlink. EVM-compatibility is critical to add utility to a networkBase can rely on established teams, applications, and users that already exist within Ethereums ecosystem.

Coinbase will be empowering DeFi applications with access to their products, users, and tools. Users can easily onramp their fiat to use DeFi applications, while Coinbase could have direct integrations with applications via their wallet.

Coinbase is also joining Optimism as a core developer on the OP stack, which is aiming to create a modular Superchain that connects all OP Layer 2 networks together, improving on user experience and the current set of scaling solutions.

Instead of relying on issuing network tokens as incentives, Pollak from Coinbase feels that the Bases access to large-scale consumer distribution and EVM compatibility would achieve product market fit. By driving down fees, building better wallets and infrastructure, Base would naturally achieve growth.

To quote Pollak, Coinbases goal is to make on-chain the next online and onboard one billion users into the cryptoeconomy. In pursuit of this goal, Base will serve as both a home for Coinbases on-chain products and an open ecosystem where anyone can build.

Bases improvements on gas fees drastically improves feasibility for users to use EVM-based decentralized apps. A single transaction on Ethereum, like minting an NFT or swapping tokens, could cost users hundreds of dollars during peak usage. Though gas fees are lower now due to reduced user activity, basic functions like swapping tokens on Ethereum still cost around $10. The barrier to entry is enormously high for normal users, stifling the adoption of Web3.

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If similar to Optimisms network, normal transactions would cost cents instead of dollars. Users would be able to access applications like Aave and Balancer at a fraction of the usual transaction fees, creating a truly accessible Web3 experience.

Users will be able to create, buy, or sell any token on decentralized crypto exchanges without waiting for centralized exchange listings and access high yield strategies without paying prohibitive transaction fees. Instead of storing income as cash in the bank earning low rates, savers could easily deposit into safe high-yielding stablecoin strategies.

The accessibility of Ethereums applications to the masses cannot be understated. Right now, many users are unable to use Ethereum due to its high network fees. As seen through 2022, DeFi applications have weathered the turbulent markets and have provided more robust infrastructure than its centralized counterparts. With new access to layer 2 solutions, these applications will become more accessible than ever before.

At Origin Protocol, the team is excited to explore layer 2 solutions to make their products more accessible to the everyday user. By integrating applications like Aave, Compound, Curve, and Convex, OUSD deploys assets into non-speculative stablecoin strategies to earn yields above 5% for users holding OUSD. With so many retail users burned from centralized interest-bearing products, theres a clear need for transparent, safe yields through DeFi.

Since OUSD holders do not have to lock up or stake capital to earn yield that is directly sent to their wallet daily, users remain fully liquid. If the user needs their dollars to pay bills, they can swap out their OUSD for USDC and easily offramp via Coinbase. Yield earned in DeFi is completely transparent, as opposed to centralized platforms that often engage in opaque and risky behavior. As OUSD explores layer 2 scaling solutions, Base is an important consideration to explore.

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Both crypto-natives and Coinbase users are excited for the launch of Base, due to the amount of features and synergies it unlocks for DeFi. Users would have access to an Internet of finance, a financial system that is truly fit for the Internet age.

Base has been in testnet since February 23, 2023, opening the platform for developers to test their applications on the network. Coinbase has not confirmed a launch date for Bases mainnet yet.

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