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Coinbase new blockchain seen as ‘massive confidence vote’ for Ethereum

bitwolf by bitwolf
February 24, 2023
in Ethereum
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The Ethereum group seems to have taken a bullish view of Coinbase’s newly announced layer-2 network, Base, which has been described as a “large confidence vote” and a “watershed second” for the blockchain community. 

Secured on Ethereum and powered by layer-2 community Optimism, Base goals to finally change into a community for constructing decentralized purposes (DApps) on the blockchain. The layer-2 community is at the moment in its testnet part, according to Coinbase CEO Brian Armstrong.

Members of the crypto group reminiscent of Ryan Sean Adams, host of the Bankless Present, imagine the transfer “is an enormous vote of confidence for Ethereum,” which might set a precedent for cryptocurrency corporations and monetary establishments to make use of Ethereum as the settlement layer of alternative.

Coinbase has roughly 110 million verified customers and has partnered with 245,000 corporations in over 100 international locations because it was based in 2012. Its cryptocurrency change is the second largest when it comes to buying and selling quantity, behind Binance according to CoinGecko.

“If Coinbase converts 20% of its 110m verified customers to Layer 2 customers within the coming years, this alone will 10x the whole variety of crypto native customers,” Adams added.

Adam additionally counseled Coinbase for opting to open-source Base and believes the brand new layer-2 community will result in much more block house demand on Ethereum.

In the meantime, Sebastien Guillemot, co-founder of blockchain infrastructure agency dcSpark, prompt that Coinbase made a smart determination to go along with a layer 2 versus an unbiased sidechain, noting that “nearly all” cryptocurrency transactions and value locked on Ethereum resides on layer 2s nowadays.

Ryan Watkins, the co-founder of crypto-focused hedge fund Syncracy Capital, described the information in a Feb. 23 tweet as a “watershed second” within the Ethereum rollup ecosystem. He added that there was “doubtless nobody higher” positioned than Coinbase to onboard the next 10 million users and institutions to Ethereum.

Not everybody was bullish although.

Gabriel Shapiro, basic counsel of funding agency Delphi Labs, explained in a Feb. 23 Twitter submit that launching a centralized layer-2 community “opens the door” to undesirable SEC scrutiny.

Associated: Coinbase beats Q4 earnings estimates amid falling transaction volume

“A centralized L2 that trades plenty of tokens any variety of which might be alleged securities, or does plenty of DeFi transactions that arguably would possibly alleged to be regulated (securities swaps and so forth), opens the door to the SEC making new sorts of secondary market claims,” wrote Shapiro, including:

“imo, this can speed up the SEC’s “secondary market” agenda re: blockchain securities points, as a result of they can not let an SEC registrant “get away with” potential violations & construct up a authorized arbitrage technique proper beneath the SEC’s nostril.”

Shapiro’s issues come because the SEC has recently upped its enforcement efforts in opposition to a number of stablecoin issuers and staking service suppliers of late.

Concerning the launch of Base, the lawyer opined that it might be a “unhealthy step for them” and inflict “collateral injury” on the remainder of the ecosystem, notably within the occasion that the SEC finds a vulnerability to show: