On the 23rd of February, 2023, Ryan Watkins posted a thread on twitter stating that the new Coinbase roll up might be a copy of Binance expansionist blueprint.
Coinbase rollup is a watershed moment in the evolution of Ethereum’s rollup ecosystem.
Recall that Binance created the largest alt-L1 ecosystem in just months by forking ETH and:
1. Using its massive exchange as top of funnel
2. Using its warchest to seed new projects on BSC pic.twitter.com/8hEr4lsplW
— Ryan Watkins (@RyanWatkins_) February 23, 2023
In an official statement, Coinbase mentioned that they have twice considered launching a Binance Smart Chain-esque L1 but decided against the approach, fearing that doing so would sever their chain from the burgeoning crypto economy.
Now, Coinbase has announced that it is building its own Ethereum Layer-2 network called Base. the “build on base” project would be the new home for Coinbase’s on-chain products and an open ecosystem for millions of new decentralised apps.
Ryan Watkins, the co-founder of crypto-focused hedge fund Syncracy Capital, described the news as a “watershed moment” in the Ethereum rollup ecosystem. He believes that there’s no one better positioned than Coinbase to onboard the next 10 million users and institutions to Ethereum.
According to CoinGecko,since the founding of Coinbase in 2012, it has garnered approximately 110 million verified users and has partnered with 245,000 companies in over 100 countries. Its cryptocurrency exchange is also the second largest in trading volume, behind Binance.
If 20% of this 110m verified users are converted to Layer 2 users in the coming years, this alone will catapult to 10x the total number of crypto native users. Base is being introduced into a crowded and rapidly growing ecosystem. As of February 23rd, there was more than $6 billion worth of ETH on layer 2s, and a 17% increase from a month ago, according to L2Beat.
The project can track 26 Ethereum scaling networks, including Arbitrum One and Optimism, two of which account for 53% and 31% of L2 market share, respectively.
The Ethereum community has adopted a bullish view of Coinbase newly announced layer 2 network, and Watkins thinks this is a welcome development, as Coinbase’s approach is successfully aligning itself with the fundamental core of the industry, which involves building on top of leading decentralised infrastructure rather than building a new personalised one. But at the same time, it also demonstrates an appreciation of the cutting edge of blockchain architecture.
Still, some wonder how Base’s lack of token will affect adoption near term. Its known fact that most on-chain users of L2s today are speculative, focusing more on anticipated airdrops. Though Ryan believes that is a short sighted way to view the project.