Coinbase Global Inc. is launching a blockchain, expanding the largest US cryptocurrency exchange’s reach deeper into the worlds of decentralized finance and nonfungible tokens.
(Bloomberg) — Coinbase Global Inc. is launching a blockchain, expanding the largest US cryptocurrency exchange’s reach deeper into the worlds of decentralized finance and nonfungible tokens.
Base, as the Ethereum-powered network will be known, is being promoted as a developer-friendly venue for building decentralized applications and is expected to serve as a home for Coinbase’s on-chain products. A testnet of the blockchain, where developers can check for software bugs before the formal launch, is slated to go online Thursday.
Coinbase has been introducing new products and services to lessen its dependence on retail-driven trading revenue, which often mirrors the wide swings in the prices of cryptocurrencies. It already has an NFT marketplace and a venture arm that invests in many DeFi projects. The launch of Base shows that the centralized exchange is willing to embrace the open-source format to lure over more app developers through the promise of easier and lower-cost interaction.
“Base is basically a bet on the community,” Jesse Pollak, head of protocols at Coinbase, said in an interview. “A bet that if we make it easier for developers to build, that will then make thousands of [decentralized applications] emerge that provide real utility for users.”
Binance, the world’s largest crypto exchange, had previously launched BNB Smart Chain. While that blockchain is powered by Binance’s BNB tokens, Coinbase doesn’t currently have plans to launch a native token for the Base blockchain.
Base is powered by a so-called layer 2 solution through a collaboration with Optimism, one of the leading projects in that corner of the crypto world. Layer 2 solutions take transaction data off the Ethereum blockchain, compress it and post it back onto the original chain for just a fraction of the time and cost. The type of scaling solutions have helped Ethereum in the past few years improve speed and reduce sometimes skyrocketed transaction fees.
Coinbase is promoting Base as a “bridge” between its users and the rest of crypto world, including other blockchains such as Ethereum or Solana, as well as DeFi, NFTs, and blockchain-based games. Ethereum is the most commercially successful blockchain.
The majority of crypto use cases in the past decade have been mostly for trading and speculation, with the industry failing to develop blockbuster products, Pollak said, adding that Base could change that.
“If we can provide a platform that makes it easier for developers to build and easier for users to use, we are going to be able to enter the next phase of the crypto economy where billions of users come on chain,” Pollak said.
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