- Coinbase’s Layer 2 chain, Base, begins its journey towards Phase 1 decentralization by deploying a proof of error on the Base Sepolia testnet.
- The Base network is centralized, meaning only operators can propose network status to the Ethereum mainnet.
- Anyone can propose a Base state and initiate the transition to decentralized rollups through a proof of error.
On July 23, 2024, Base network operators announced the deployment of the proof of error to the Base Sepolia testnet, a staging environment for running and testing applications and code before deploying to the mainnet.
According to a social media post from Base on the Web3 social media platform Mirror, “This launch paves the way for us to securely bring proof-of-error to mainnet and complete other milestones towards reaching Phase 1 decentralization.”
Anyone can propose a root state of Base through a proof of error. This technical term describes submitting a summary of the Base chain, including smart contracts, account balances, and other relevant data, to the Ethereum mainnet for recognition.
The Journey to Phase 1 Decentralization
According to Ethereum co-founder Vitalik Buterin, layer 2 rollups need to pass three major milestones before they can be considered sufficiently decentralized or “taken off the training wheels.”
The first phase (phase 0 or full training wheel phase) is when the layer 2 rollup launches the mainnet. At this stage, users should be able to post transactions without the cooperation of the operator. That is, the chain operator cannot freeze the user’s assets. However, there is no need for fraud evidence.
The next step is the 1-step decentralized, limited training wheel phase, which must include fraud prevention. There may be a multi-signature override mechanism (called a security council) that can override fraud prevention in case there is a bug in the proof system code, but it must have a 6-of-8 or stricter threshold, i.e. at least 8 participants and at least 75% consensus to override.
Additionally, anyone participating in the multisig redefinition system must be outside the organization executing the rollup, in this case Base (and its associates Coinbase).
The final step, step 2 or no training wheels, requires that no actor or group of actors can override the fraud proof and publish a state other than the output of the network code. However, this is only recommended if it is verified that the fraud proof code is bug-free.
The Journey of the Bass
Base is currently the second largest Layer 2 rollup with a TVL of $1.76 billion according to Defillama, a leading blockchain data provider. The network has grown significantly in 2024, leveraging its partnership with Coinbase to create a network effect that has fueled its growth.
Base’s journey towards Phase 1 decentralization will help solidify its position on other networks in that phase, such as Arbitrum, OP Mainnet, and dYdX v3.
Other chains that have reached this level have issued governance tokens, but as of this writing, Base claims it has no intention of issuing tokens in the future.