In a recent interview with Decrypt, Coinbase CEO Brian Armstrong confirmed the company’s decision not to issue tokens for Base, a layer 2 network.
Contrary to previous speculation and a statement from Coinbase Chief Legal Officer Paul Grewal, Armstrong emphasized that there are no plans to create a Base network token. This announcement is significant as it reflects Coinbase’s strategic approach to layer 2 network development and interaction with the broader cryptocurrency ecosystem.
Launched in August, Base has seen remarkable growth, becoming the third-largest layer 2 network in terms of total value locked (TVL), boasting nearly $500 million in TVL and one million interactive wallets since its inception.
Layer 2 networks, built on top of existing blockchain systems such as Ethereum (ETH), solve the scalability issues inherent in base layer networks by providing faster and cheaper transaction capabilities. Base’s rapid rise in this competitive environment is noteworthy and highlights its potential impact on the cryptocurrency market.
Armstrong’s vision for Base extends beyond Coinbase’s proprietary interests. He envisions Base as a community-driven project that can interoperate with the wider cryptocurrency ecosystem. Base’s foundation on Ethereum’s Optimism (OP) stack is a strategic move to ensure this broad compatibility and community participation. This approach, combined with support from Coinbase, aims to build trust and stability in the network.
Armstrong also set ambitious performance goals for Coinbase trading, targeting an average transaction time of “less than one cent per second.” Achieving these goals will require substantial improvements to Base and broader integration of layer 2 solutions across the Coinbase platform.
“It’s not just about Base. It’s like integrating the Lightning Network into Bitcoin and other very fast layer 1s like Solana,” Armstrong added. He notes that currently about 7% of transactions through Coinbase use Layer 2, and internal goals are set to “get that number much higher” as part of a “multi-year effort.”
Armstrong acknowledges the burgeoning interest from other exchanges, such as Kraken and OKX, in developing layer 2 solutions, but cautions against a fragmented environment where each application operates its own layer 2 network. He advocates consolidation around several layer 2 networks to optimize efficiency and interoperability in the cryptocurrency space.