Coinbase, the biggest crypto centralized exchange (CEX) in North America, decided to go on-chain recently. This move is considered to be one of the stepping stones towards pivoting its pathways towards Web3 Gateway from being a centralized crypto exchange platform. With the launch of Base, which is a secure and developer-friendly Ethereum layer 2 chain, Coinbase hopes to attract the next billion users on-chain.
The magnitude of centralization on Base is quite high initially since it is an optimistic rollup chain built on open-source technology. Getting its clout, preferably from the Ethereum developer community and Coinbase’s existing user base, Base will surely function as a platform for Coinbase to experiment with Defi (Decentralized finance).
The possibility of a ‘superchain’ can be leveraged by technology behind the scenes, where Optimism secures a potentially permissioned blockchain. The Base will also benefit from the future development and updates of Ethereum. Future updates will drastically decrease the transaction fee between L2 chains. This will lure users towards utilizing Base and can attract a significant user base of Coinbase, from the old developers to a fairly new user base who use Coinbase, to Defi.
With a decent interface already in place, Base needs to be recreated on open networks and made globally acceptable for enhancing its existing financial system. The launch of Coinbase was done with the intention of betting on Web3. The journey of Base from its inception to where it has reached today has been classified into several phases.
Phase 1 involves building the protocol and framework. The new protocols of Bitcoin and Ethereum came into play, and developers started using the mechanisms. Several open-source communities developed around this protocol. Phase 2 exclusively saw the development of digital currency exchanges, where Coinbase actually started, and exchanges served as a bridge for users to get their currency in and out of the digital world. By Phase 3, Coinbase had millions of users.
Phase 3 involved enhancing the branding and building an interface for the mass market for digital currency apps in order to attract millions of users. In order to make use of digital currency and its applications, it was important for Coinbase to move beyond just exchange and investment because apparently consumers and businesses needed an easy interface to make use of. From there on, countless applications have been built to let anyone anywhere access the futuristic and nascent cryptocurrency, including Coinbase, Coinbase wallet, Metamask, Rainbow, etc.
The future of the Base ecosystem heavily relies on the recreation of the financial system on the Open Source Network. The solution to recreation may be to look into developing various protocols that could boost and enable the end-user application in order to attract Billions of users.
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