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Optimism's Token Nears ATH After Coinbase Launches L2 Built on the OP Stack

Ruholamin Haqshanas

Published: February 24, 2023 10:12 pm

Coinbase has unveiled its Ethereum layer-2 network called Base, built on the MIT-licensed OP Stack in collaboration with Optimism. The news has sent the price of Optimism’s native token and other cryptocurrencies from the Optimism ecosystem skyrocketing.

Coinbase Launches L2 Solution to Bring Another Billion Users to Web3

In a Thursday blog post, Coinbase announced the testnet launch of Base, an Ethereum layer-2 scaling solution that seeks to make it easier for developers to build decentralized apps or “dApps” on-chain. Coinbase aims to onboard more than 1 billion users into crypto with Base. The exchange said:

“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” onchain.”

Coinbase mentioned that Base would be a home for its on-chain products and an open ecosystem where anyone can build. Furthermore, the largest cryptocurrency exchange in the US said they are incubating Base inside of Coinbase and intend to “progressively” decentralize the chain.

A layer-2 network sits on top of a layer-1 blockchain and is designed to enhance the speed and reduce transaction costs. In this case, Coinbase’s Base will sit on top of the Ethereum network and help improve the speed and efficiency of the blockchain.

Since Base is built atop Ethereum, it enjoys the underlying security of the Ethereum network. Coinbase said the L2 solution will also have access to the exchange’s products, users, and tools, including product integrations, fiat onramps, and acquisition tools that would “enable developers to serve the 110M+ verified users and to access $80B assets on platform.”

Furthermore, Base will operate with full Ethereum Virtual Machine (EVM) compatibility, the program that executes Ethereum’s smart contract applications, at a “fraction of the cost.” Coinbase said developers could use the L2 product to set up gasless transactions for their dApps and securely build multichain applications with easy-to-use bridges.

“Base has a vision to be an open ecosystem, seeded with Coinbase products, users, and assets. We’ll work with the broader community to bring the chain to life. We’re thrilled to have an incredible community who will contribute to making Base a robust ecosystem.”

OP Token Surges as Coinbase Joins Optimism as a Core Dev

Coinbase will build its L2 solution using Optimism’s technology. The exchange said they would join Optimism as a Core Dev on the open-source OP Stack, which is “the standardized, shared, and open-source development stack that powers Optimism,” according to the project’s website.

The news has sent the price of OP, Optimism’s native token, and other cryptocurrencies from the Optimism ecosystem skyrocketing. Data by CoinMarketCap shows that OP has gained more than 9% over the past day and around 16% over the past seven days.

Similarly, VELO, the native token of the Optimism-based decentralized exchange Velodrome Finance, has jumped more than 25% over the past 24 hours, taking the seven-day tally to over 117%. Optimism-native lending protocol Sonne Finance’s SONNE token has surged around 80% over the past day.

It is worth noting that Coinbase does not plan to issue a token for its L2 network. The move comes as the SEC has ramped up efforts to crack down on the companies operating in the crypto industry. The agency recently charged Kraken with violating US securities law with its staking service.

Meanwhile, Optimism’s OP token is trading at $3.05, up by 9.5% over the past day. The token, which was airdropped to early adopters in May last year, is down by only 4% compared to its all-time high of around $3.19.

This article originally appeared on The Tokenist