Coinbase CEO Brian Armstrong Denies Plans for Base Token
Coinbase CEO Brian Armstrong has stated that the crypto exchange has no intention of launching a token for its layer-2 network Base. In an exclusive interview with Decrypt, Armstrong contradicted an earlier statement by Coinbase Chief Legal Officer Paul Grewal, who suggested that a token for Base could be viable in the future. A Coinbase spokesperson confirmed that there are “no plans” to issue a Base network token.
Armstrong expressed satisfaction with the progress of Base since its launch in August. He noted that it had become the third-largest layer-2 in terms of total value locked (TVL) within a couple of months and had approximately $500 million in TVL. The exchange is now focused on integrating Base with various applications, and developers have shown enthusiasm for the layer-2.
The Significance of Layer-2 Networks
A layer-2 network is a type of cryptocurrency network built on top of existing networks like Ethereum. These scaling networks can process transactions faster and at a lower cost than the base layer. Base has quickly gained popularity among users in just a few months. Armstrong emphasized that Base is not meant to be exclusively associated with Coinbase but rather aims to be interoperable with the broader crypto community while benefiting from Coinbase’s support.
One Second, One Cent
Armstrong revealed that Coinbase’s internal goal is to make the average transaction on its platform “under one second and one cent.” This will require improvements to Base and making layer-2 the default option on Coinbase instead of something done occasionally. Armstrong mentioned integrating other fast layer-1s like Solana and the Lightning Network on Bitcoin. Currently, around 7% of transactions on Coinbase use layer-2, but the company aims to significantly increase this percentage over the next few years.
Armstrong compared the shift to layer-2 to the transition from dial-up to broadband internet, highlighting its importance in bringing new applications online. He expressed pleasant surprise at other exchanges launching their own layer-2 networks but suggested that consolidation around one or two networks may be beneficial for the industry.
Hot Take: Consolidation of Layer-2 Networks
While Coinbase has no plans to issue a token for its Base network, CEO Brian Armstrong is pleased to see other exchanges exploring their own layer-2 solutions. However, he questions whether it is necessary for every application to have its own layer-2 network. Armstrong believes that getting every app on some form of layer-2 is crucial and welcomes the industry’s exploration in this direction. Coinbase aims to make layer-2 the default option on its platform and achieve transaction performance goals of under one cent and one second.
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