Gnosis was ecstatic to see Coinbase embrace real Ethereum ideals with the introduction of BuildOnBase as it announced a new partnership. This occurred in the context of recent events pertaining to Ethereum. Gnosis has the intention of bringing their battle-tested self-custodial accounts to the network, but more significantly, they want to supercharge account abstraction with it. The new development on Ethereum has sparked a couple of responses from the crypto community.
Pumped to see @coinbase embrace true @ethereum values with the launch of @BuildOnBase. We are excited to partner 🔵
We will bring our battle-tested self-custodial accounts to the network. But more importantly, we aim to supercharge account abstraction with it. pic.twitter.com/mRT33MMqss
— Safe (prev. Gnosis Safe) | takebackownership.eth (@safe) February 23, 2023
What are people in the cryptocurrency world saying about this latest advancement?
Members of the cryptocurrency community such as Ryan Sean Adams, host of the Bankless Show, are of the opinion that the move “is a massive vote of confidence for Ethereum.” If this is proven to be the case, it could set a precedent for cryptocurrency companies and financial institutions to use Ethereum as their preferred settlement layer.
Since its founding in 2012, Coinbase has amassed roughly 110 million verified users and has worked with 245,000 businesses across more than 100 countries. According to CoinGecko, its cryptocurrency exchange is the second biggest in the world in terms of the trading volume. The first place goes to Binance.
1/ They choose Ethereum instead of launching their own L2. This is a massive vote of confidence for Ethereum.
— RYAN SΞAN ADAMS – rsa.eth 🏴🦇🔊 (@RyanSAdams) February 23, 2023
Adam also praised Coinbase for its decision to open-source Base, and he is of the opinion that the newly introduced layer-2 network would result in an increased demand for block space on Ethereum.
In the meantime, Sebastien Guillemot, co-founder of blockchain infrastructure company dcSpark, suggested that Coinbase made a wise decision to go with a layer 2 as opposed to an independent sidechain, noting that “almost all” cryptocurrency transactions and value locked on Ethereum resides on layer 2s these days. Guillemot was referring to the fact that “almost all” cryptocurrency transactions and value locked on Ethereum reside on layer 2s.
Under the context of the Ethereum rollup ecosystem, Ryan Watkins, co-founder of the cryptocurrency-focused hedge fund Syncracy Capital, referred to the news as a “watershed moment” in a tweet that he sent on February 23. He went on to say that there was “probably no one better” positioned than Coinbase to get Ethereum’s next 10 million consumers and institutions on board.
But, not everyone had an optimistic outlook
Gabriel Shapiro, general counsel of investment company Delphi Laboratories, noted in a Twitter post dated February 23 that creating a centralized layer-2 network “opens the door” to unwelcome attention from the SEC. He was referring to the fact that the SEC has the authority to investigate investment firms.
Coinbase announced Base, a new L2 (based on the Optimism L2)
L2s continue to dominate the industry
– Almost all txs in crypto are on L2s
– Almost all TVL in crypto are on L2s
– More devs working on L2s than basically every L1
Sidechains (which aren't L2s) are a waste of time
— Sebastien Guillemot (@SebastienGllmt) February 23, 2023
Concerns raised by Shapiro come at a time when the SEC has lately ramped up its enforcement operations against a number of stablecoin issuers and service providers of staking services.
The attorney expressed their opinion that the introduction of Base may be a “poor move for them” and cause “collateral harm” to the rest of the ecosystem, especially in the event that the SEC discovers a weakness to expose.