Coinbase Explores Native Token for Ethereum Layer-2 Network Base

Coinbase has announced it is "exploring" the possibility of launching a native token for its Ethereum layer-2 network, Base. This marks a shift from its previous stance of not actively considering such a move. The potential token aims to accelerate decentralization and expand opportunities within the Base ecosystem.

Key Takeaways

• Coinbase's Base network is in the early stages of exploring a native token.

• This move represents a change from Coinbase's prior statements against creating a Base token.

• The potential token could foster decentralization and growth for developers and creators.

• Base currently utilizes Ethereum for transaction fees and does not require a native token to function.

A Shift in Strategy

Jesse Pollak, Head of Base at Coinbase, confirmed the exploration during a presentation at the Basecamp event. The official Base account on X stated, "Base is beginning to explore a network token. We’re in the early phases of exploration, and don’t have any specifics to share around timing, design, or governance. We’re committed to bringing the community along with us, and building in the open."

This announcement contrasts with earlier statements from Coinbase CEO Brian Armstrong, who in late 2023 indicated that the exchange was "not planning to make any token" for Base. However, Coinbase Chief Legal Officer Paul Grewal had previously suggested that a token could be viable in the future.

Rationale and Ecosystem Growth

While Base currently functions without a native token, using Ethereum for transaction fees, the exploration of a token is seen as a way to accelerate the network's decentralization and broaden opportunities for its users. Base has already seen significant activity, facilitating millions of transactions and holding billions in total value locked (TVL), making it a prominent Ethereum layer-2 network.

Other layer-2 networks, such as Arbitrum and Optimism, have introduced their own tokens as part of their transition to decentralized governance structures. Base's move could be seen as a similar step towards greater community involvement and decentralized decision-making.

Bridging and Future Developments

In addition to exploring a token, Base is also working on a new open-source bridge designed to allow users to move assets between Base and the Solana network. This initiative aims to create a more interoperable on-chain economy, enabling seamless asset transfers and access to a wider user base and liquidity pools.

The Base App has also seen substantial growth, attracting over 1 million users and facilitating creator earnings. The program "Base Batches" continues to support developers, offering funding and mentorship to foster innovation within the ecosystem.

Sources

• Coinbase Is Considering Launching a Token for Ethereum Network Base, Yahoo Finance.

• Base's potential native token, Polkadot's new supply cap, Ethereum's stablecoin record, and more |The Block, The Block.

• Coinbase to launch a token for its Ethereum L2 network, Cryptopolitan.

• Coinbase Is Considering Launching a Token for Ethereum Network Base, Decrypt.