Coinbase Tests Its Own Blockchain with Testnet Base

The world’s leading crypto exchange Binance has already laid the foundation for an expanding ecosystem in 2020 with its Smart Chain (BSC). Now, Coinbase’s competitor is also taking a first step to offer its own blockchain solution to attract and retain customers and crypto projects.

Under the name “Base”, Coinbase has launched a testnet, which, according to the official blog post, should build bridges toward Ethereum (ETH), Solana (SOL), and other ecosystems in the medium term. Technologically, Coinbase’s Base is based on open-source code from Optimism (OP) and the crypto exchange also announced it is now participating in the core Optimism developer team. So it’s not hard to understand why Optimism enjoyed around 20 percent daily gains around the launch of Base.

“We’re excited to announce the testnet launch of Base, an Ethereum Layer 2 (L2) network offering a secure, low-cost, developer-friendly way for anyone, anywhere, to build decentralized apps or “dapps” on-chain. Our goal with Base is to make onchain the next online and onboard 1B+ users into the crypto-economy. In pursuit of this goal, Base will serve as both a home for Coinbase’s onchain products and an open ecosystem where anyone can build,” says the company.

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At the same time, however, the crypto scene was amused by how the price curve of Base Protocol (BASE) shot up by more than 100 percent

After all, this project has long since been abandoned in terms of content and ranks somewhere around 2,000th in the list of major cryptocurrencies by market capitalization.

But the similarity in name to the Coinbase blockchain apparently tempted investors to blindly pounce and buy into Base Protocol – even though Coinbase had explicitly noted that it was not planning a token of its own for its project.

Coinbase, meanwhile, believes its broad customer base of more than 110 million people and a newly established fund to support projects will help Base succeed. Already, established market players such as Chainlink (LINK) and AAVE have said they are open to Base. With its plans, Coinbase does not see itself in direct competition with existing solutions, but rather as a customer-friendly supplement. Base is expected to receive a mainnet before the end of 2023.

Conclusion: Coinbase ventures its own network with Base

Experts are skeptical about comparing Coinbase Base with the Binance Smart Chain because BSC has its own base currency, Binance Coin (BNB), which has brought massive liquidity to the ecosystem. So Base will have to be measured first by whether user-friendliness and other incentives really ensure that the upcoming Coinbase solution will be in demand. For Optimism, however, Coinbase’s commitment is like an accolade.

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(Featured image by Marco Verch Professional Photographer CC BY 2.0 via Flickr)

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