Coinbase’s Base: The Game-Changer for Ethereum Layer-2 Solutions

A New Challenger in the Crypto Arena

In late July, Coinbase announced the launch of Base, its new blockchain that quickly catapulted itself into a significant player among Ethereum-based layer-2 chains. On a rather remarkable day, September 21, Base recorded around 677,000 transactions and saw the creation of 870,163 new addresses. In the same breath, its competitor Arbitrum, a layer-2 launched in 2021, managed around 925,000 transactions, despite having only 54,233 new addresses. The competition is heating up! 🔥

Building Blocks: Diverse Applications Emerge

Base is now home to an array of decentralized projects. Jesse Pollak, Coinbase’s head of protocols, shared insights during the Messari’s Mainnet conference, showcasing some intriguing projects including decentralized inflation oracles and even restaurant rewards programs. The revolution in blockchain technology is not limited to finance; it’s creeping into your next dining experience!

The Roadmap Ahead: What’s Needed for Mainstream Adoption?

Pollak laid out three pivotal improvements necessary for the blockchain landscape:

• Cost Efficiency: Making apps cheaper to use is a priority. While Base has already brought costs down significantly—from $5 to just cents—it’s not good enough yet. Users should barely notice that they’re spending money.
• User-Friendliness: Enhancing wallet experiences is crucial. User interfaces need to feel as intuitive as a smartphone, not as complicated as building a piece of IKEA furniture.
• Identity Infrastructure: Improved on-chain identity systems would reshape borrowing methodologies. Today’s borrowing tends to favor under-collateralization, but reliable identity solutions could democratize access like never before.

From Speculation to Real Utility: The Shift in Crypto Mindset

Pollak astutely observed that the current phase of cryptocurrency development is transitioning from speculation to usefulness in daily life. Remember the early internet days? Many dismissed social apps as mere distractions. Yet today, they are multi-billion dollar industries. The same can and will happen with blockchain applications, once they become widely adopted.

Base vs. Ethereum: A Strategic Choice

So, why did Coinbase decide to build Base as a layer-2 solution on Ethereum? Pollak revealed a key insight from their past considerations in 2018, 2020, and recently in 2023: they realized they didn’t want to be isolated on an alternative layer-1 blockchain. By leveraging Ethereum’s expansive ecosystem, they optimally positioned Base for collaborative growth rather than standing alone.

Expectations vs. Reality: Balancing Growth and Scalable Solutions

Although there are ongoing discussions about Ethereum’s scalability limits, Pollak expressed optimism about the emergence of solutions like layer-2 rollups. Transactions are being efficiently batched, but he acknowledged these challenges will persist for a few more years. Progress may feel slow, but it’s in the making!

Ready for Takeoff: Exciting Developments and Future Prospects

An example of innovation that invigorated Pollak is Blackbird, a customer engagement platform for restaurants set to revolutionize dining experiences. Walking into a participating restaurant will feel like being welcomed at home, where your preferences and rewards are known at a tap. Who knew blockchain could make everything from your food experience to banking so much easier?

The Emergence of Killer Apps in Crypto

When asked about the elusive ‘killer app’ that could transform the crypto universe, Pollak emphasized there wouldn’t just be one; many would emerge. Right now, stablecoins are already reshaping the economic landscape worldwide, proving once more that digital applications can facilitate economic freedom and bring stability in chaos.