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Base - Coinbase's L2 Chain Solution Explained

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In this article, we will explore Base by Coinbase, what it is, how it works, and all the connected parts that help make it possible, such as: L2 (layer 2), Optimism, Optimistic Rollup Chain, Optimistic Stack and how to buy Base. OK, let’s dive in…

Introduction to Base

On February 23, 2023, Coinbase announced the launch of its Ethereum layer-2 network called Base on the testnet. Base aims to provide a secure, scalable, cost-effective, and user-friendly platform for developing decentralized applications (DApps) using Optimism technology.

Coinbase aims to onboard billions of users into the crypto-economy. Currently, Base operates as an Ethereum L2 controlled by Coinbase. The future plan is to achieve decentralization and interoperability with other blockchains.

Coinbase plans to launch its L2 to onboard over one billion users to the crypto-economy. Currently, Base is an Ethereum L2 controlled and operated by Coinbase. The ultimate goal is to achieve decentralization and interoperability with other blockchains.

Projects using Base can benefit from Coinbase's ecosystem, including product integrations, fiat onramps, a user base of over 110 million verified users, and $80 billion worth of assets. Base will be used by projects like Chainlink, Etherscan, Aave, Dune, Nansen, Magic Eden, The Graph, Wormhole, Blockdaemon, and more.

Base: Pros & Cons


  • Enhanced security and scalability
  • Reduced transaction costs
  • Access to Coinbase's extensive user base and resources
  • Full EVM (Ethereum Virtual Machine) compatibility for ease of use


  • Initial centralization in block production
  • Potential regulatory challenges
  • Dependence on the success of Optimism's technology

Integration is key

Interoperability is a key focus of the Base roadmap. It will integrate with Coinbase exchange and wallet, and support Coinbase NFT. The ultimate goal is to achieve interoperability with other blockchains like Polygon, Solana, and Avalanche, apart from Ethereum.

Base is built using Optimism's OP Stack, enabling L2 to utilize Optimistic Rollups. With this technology, Base can verify and batch transactions off-chain before submitting them to Ethereum, reducing congestion and alleviating users from high gas fees.

Back-Up! What’s L2, Optimism, Optimistic Rollup Chains & the Optimism Stack?

Base, a layer-2 network, operates on top of Ethereum to improve scalability and efficiency. It enables faster transactions and lower costs while maintaining security and decentralization. L2 networks play a vital role in the blockchain ecosystem by balancing performance and security.

What is Optimism?

Optimism is a layer-two scaling solution for Ethereum. It aims to address the blockchain trilemma by improving Ethereum's throughput while maintaining the strong security of the main Ethereum chain (Layer 1). This is achieved by executing transactions off-chain, reducing congestion and fees on the Ethereum network.

What’s an Optimistic Rollup Chain?

An Optimistic Rollup chain is a layer-two solution used by Optimism. It assumes transactions are valid by default and processes them only when a validity challenge arises, speeding up transaction processing by eliminating real-time processing on the main chain like Bitcoin.

In an Optimistic rollup, transactions and state changes are bundled and submitted as one data unit to the main Ethereum chain. Computation and state execution occur off-chain, allowing for higher throughput compared to Layer 1. Disputes and challenges can be resolved on the main Ethereum chain to ensure security.

Optimistic rollups are vital for Ethereum's scaling. They offer faster and cheaper transactions while maintaining the security and decentralization of the Ethereum mainnet. Technologies like Optimism enable Ethereum to scale effectively for more users and complex applications.

What’s an Optimism Stack?

O-P Stack is an open-source modular approach for building blockchains. It allows the combination of proprietary elements from different chains to create customized solutions for Ethereum.

Super-Low Fees

Base fees are significantly lower than other blockchains, with at least a 10x difference compared to Ethereum. The goal for Base is to further reduce transaction fees to $0.01 in the future, depending on its success and adoption. This cost efficiency is crucial for encouraging wider usage and adoption of blockchain technology.

So, How Can I buy Base?

The Base Ecosystem contains 25 coins with a total market capitalization of over $1B. As a Savl user, you can currently purchase the following Base-powered L2 coins:

  • BASEETH (Base Ethereum)
  • DAI (BASE)

Users can also buy the Base Protocol BASE token which is currently trading at $0.85 with a limited supply of 480,680 but we don’t really consider this to be a smart move.

Regulatory challenges

Regulatory uncertainty is a challenge for Base, especially with token issuance. Coinbase is being cautious and taking action to address these challenges and ensure compliance and security by implementing measures like KYC for user onboarding to Base.


Crypto exchanges creating their own blockchain networks is logical. An example of this is the Binance Smart Chain, launched in July 2017. Its native cryptocurrency, BNB, has a market capitalization of nearly $48 billion.

Coinbase's launch of Base is a strategic move to embrace decentralized technology, promote Ethereum adoption, and benefit the DeFi space. By attracting a diverse range of users, from beginners to experienced traders, Base could facilitate inclusive and widespread DeFi adoption, marking a significant milestone towards a decentralized financial ecosystem.

DISCLAIMER: Cryptocurrencies are high-risk investments. This summary is for informational purposes only and is not financial advice. Invest at your own risk.

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