Coinbase the second-largest cryptocurrency exchange in terms of trading volume has jumped into the blockchain space in a move that a few market players are ecstatic about.
The exchange officially launched Base the Ethereum-focused layer 2 (L2) blockchain in an effort to be part of the decentralized market through its own chain, and further expand into the developer sector, Jesse Pollak, lead for Base and head of protocol at Coinbase previously said to TechCrunch.
Base’s L2 is a “secure and affordable, user-friendly” chain that is designed to assist developers in creating apps on-chain according to the company’s statement. A variety of crypto companies platforms, marketplaces, and infrastructure companies have pledged to build on Base the chain, an official Coinbase spokesperson said to TechCrunch.
The companies that are planning to participate will include Blockdaemon, Chainlink, Etherscan, QuickNode, Aave, Animoca Brands, Dune, Nansen, Magic Eden, Pyth, Rainbow Wallet, Ribbon Finance, The Graph, Wormhole, and Gelato, to mention a few.
“The introduction of Base confirms the significance of L2s to expand this blockchain-based ecosystem” stated Dmitry Shklovsky co-founder of QuickNode who is the partner and a node supplier for Base. “More onramps, as well as more equitable L2s that allow developers to be more flexible, are important indicators of health that indicate that we’re making progress in the right direction.”
L2 blockchains sit on the top layers-1 (L1) blockchains such as Ethereum, Solana, and Avalanche in order to cut down on the bottlenecks, restrictions, and other effects of network congestion. Instead of placing each transaction in an L1 chain, L2s combine transactions, allowing tasks to be efficiently completed in a faster method.
L1s such as Ethereum are secure but are not practical for large-scale transactions because of the prohibitively high gasor transaction charges, spokespeople of The Graph Foundation and Edge & Node stated in an email addressed to TechCrunch. “L2s allow blockchains to be more accessible to a wider spectrum of developers and users, which allows for cheaper and quicker transactions, while taking benefit of the security offered by L1s, such as Ethereum.”
L2s are vital to ensure accessibility and scalability within the industry, Shklovsky said. “L1s generally place security and decentralization ahead of the ability to scale. L2s can reduce the load for the primary chain. This makes it easier to use and faster which allows chains to expand rapidly without compromising decentralization or security.”
