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What is Base? Coinbase’s Ethereum Layer 2 Network

Base is an Ethereum Layer 2 network developed by Coinbase that uses optimistic rollups to execute transactions off-chain while settling and securing them on Ethereum.

As Ethereum activity increasingly shifts to Layer 2 networks, understanding how platforms like Base operate has become essential for users interacting with decentralized applications. Base was designed to reduce transaction costs and friction while remaining closely aligned with Ethereum’s execution environment. To access Ethereum-compatible networks such as Base, users typically rely on a self-custodial wallet like the Bitcoin.com Wallet, which allows them to manage assets and interact directly with decentralized applications.

Overview: Why Coinbase Built Base

By 2022, Ethereum’s scaling path was clear. Rollups would handle execution, while Ethereum mainnet would focus on settlement and security. What remained unresolved was who would build Layer 2 networks capable of onboarding users at scale.

Coinbase’s decision to build Base was driven by the view that Ethereum’s limitations were no longer purely technical. High fees, fragmented tooling, and complex onboarding flows continued to prevent broader participation. For a platform already serving tens of millions of users globally, these frictions represented a structural bottleneck.

Base was created to reduce this friction while preserving Ethereum’s security model and developer ecosystem.

Architectural Foundations: How Base Works

Optimistic rollups by design

Base uses optimistic rollups, executing transactions off Ethereum and submitting compressed transaction data back to mainnet. Transactions are assumed to be valid unless challenged during a defined dispute window.

This design significantly lowers transaction costs and increases throughput, while still relying on Ethereum as the final arbiter of state. The tradeoff is that full economic finality depends on Ethereum settlement and the rollup’s challenge mechanism.

The OP Stack and strategic alignment

Base is built using the OP Stack, the open-source rollup framework developed by Optimism. This makes Base fully EVM-compatible, allowing Ethereum smart contracts and tooling to function with minimal changes.

By adopting the OP Stack, Base aligns itself with the broader Superchain vision, where multiple Layer 2 networks share infrastructure, standards, and interoperability. Rather than differentiating through custom architecture, Base differentiates through integration, distribution, and execution.

Settlement, Finality, and Ethereum Dependence

Transactions on Base are executed on Layer 2 but ultimately settled on Ethereum. Ethereum remains the final source of truth, ensuring that Base inherits Ethereum’s validator security and censorship resistance at the settlement layer.

From a user perspective, transactions appear final quickly. From a protocol perspective, full finality depends on Ethereum confirmation and the rollup’s dispute window, a characteristic shared across optimistic rollups.

Gas Fees and the Absence of a Native Token

Base does not have a native network token. Transaction fees are paid in ETH.

This design choice reduces complexity for users and avoids introducing speculative incentives at the protocol layer. By using ETH for gas, Base remains economically aligned with Ethereum rather than fragmenting liquidity across additional assets.

As of 2025, Coinbase has stated it is exploring the possibility of a Base token, but no launch, specifications, or timeline have been confirmed.

Sequencing, Control, and Trust Tradeoffs

Base currently uses a single sequencer operated by Coinbase. The sequencer determines transaction ordering before batches are submitted to Ethereum.

This approach improves reliability and performance, particularly for consumer-facing applications, but it introduces a trust assumption. While Ethereum enforces settlement, Coinbase retains control over transaction inclusion and ordering at the execution layer.

Base follows a phased decentralization roadmap aligned with the OP Stack, including fault proofs and shared sequencing. Progress has been made, but Base should currently be viewed as partially decentralized.

In practical terms, using Base today requires trusting Coinbase to operate the sequencer honestly and reliably, while trusting Ethereum to enforce final settlement and asset recovery. Over time, this trust assumption is expected to shift away from a single operator as sequencing and fault proofs are decentralized. Until then, Base occupies a middle ground between fully permissionless execution and fully centralized infrastructure.

Ecosystem Growth and Adoption Dynamics

Base’s adoption has been driven primarily by access rather than token incentives. Integration with Coinbase’s infrastructure simplifies fiat onboarding and reduces friction for users moving on-chain.

This has made Base attractive for consumer applications, NFT platforms, social protocols, and low-fee DeFi use cases. By 2024 and 2025, Base consistently ranked among the most active Ethereum Layer 2 networks by transaction count and active addresses.

Base’s ecosystem growth has also been shaped by visible Coinbase leadership, including Jesse Pollak, who has played a prominent role in representing the project publicly and engaging with developers as the network has expanded.

Base Compared to Other Major Ethereum Layer 2 Networks

The following table compares Base with other major Ethereum Layer 2 networks across architecture, governance, and ecosystem focus.

Why Base Matters in the Ethereum Ecosystem

Base illustrates a different approach to Ethereum scaling. Rather than competing through aggressive incentives or bespoke architecture, it prioritizes compatibility, distribution, and reduced onboarding friction.

For Ethereum, Base serves as a case study in how Layer 2 networks can drive adoption without fragmenting standards or security assumptions. For users, it offers a lower-cost way to interact with Ethereum while remaining within a familiar ecosystem.

Base is less focused on serving governance-heavy, DAO-native communities and more focused on applications that benefit from simplified onboarding, predictable costs, and tight integration with existing crypto infrastructure.

Conclusion

Base is a deliberately conservative but strategically significant Ethereum Layer 2. By combining optimistic rollups, EVM compatibility, and Coinbase’s distribution reach, it occupies a distinct position among Ethereum scaling networks.

While decentralization remains a work in progress, Base demonstrates how infrastructure design choices and distribution strategy can influence real-world adoption without abandoning Ethereum’s core principles.

Frequently Asked Questions

Is Base its own blockchain?
Base is a Layer 2 network that executes transactions off Ethereum but settles them on Ethereum mainnet.

Does Base have a token?
No. As of 2025, Base does not have a native token and uses ETH for gas.

Is Base decentralized?
Base is partially decentralized and follows a roadmap toward greater decentralization over time.

Why did Coinbase build Base instead of using an existing Layer 2?
Coinbase built Base to reduce onboarding friction, control the user experience, and align Ethereum scaling with its existing infrastructure.

Who is Base best suited for?
Base is well suited for users and developers who want lower fees, Ethereum compatibility, and access to consumer-focused on-chain applications.

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