On February 13th, Coinbase outlined its three strategic directions for 2026 in its letter to shareholders: developing a full-fledged trading platform, expanding stablecoin payments, and "bringing the world on-chain." In this ambitious blueprint, the Base network is positioned as the core infrastructure carrying the on-chain experience. However, just two weeks prior, Base experienced a massive network-wide transaction delay and loss failure. On one hand, there's the grand narrative of bringing billions of users into the crypto world; on the other, users repeatedly complain, "Why are transfers still so slow?" This tension is no coincidence—when a publicly traded company considers its L2 network a strategic core, a configuration change to that network is no longer just an internal matter for the technical team, but a public event capable of impacting investor confidence.
Vulnerabilities exposed by a single configuration change
On the afternoon of January 31, engineers responsible for the Base network operations at Coinbase implemented a routine configuration change to the transaction propagation method. After the change went live, the block builder began repeatedly pulling the same batch of expired transactions—transactions that could not be executed due to the rapid increase in base fees at the time. The block builder became idle, executable transactions could not be added to blocks, and users generally experienced no response, timeouts, and lost transactions after submission.
The official explanation was that the outage was not a capacity issue, but a logical error. The configuration change unexpectedly created a feedback loop: the less effective transactions were retrieved, the higher the fetching frequency became; the higher the fetching frequency, the harder it was for effective transactions to enter the memory pool. The solution was to roll back the changes directly. The network quickly stabilized, but the logic causing the congestion was not refactored, only reverted.
In its post-outage analysis, Coinbase wrote: "During network congestion, transaction submissions may still occasionally be delayed or lost." The implication is that the root cause of the problem has not yet been resolved. Coinbase's promised long-term optimization is expected to take a month, starting from February 4th and not expected to be completed until early March.
Misalignment between strategic core and engineering shortcomings
Just two weeks after the outage, Coinbase listed "making the world on-chain" as one of its top three annual priorities, and explicitly stated its intention to "expand the Base application" and "make the on-chain experience simpler and more accessible." This narrative rests on the premise that Base can provide a stable and smooth user experience.
The reality is that Base's TVL already accounts for 47.6% of the total locked value in the Ethereum L2 market, nearly twice that of Arbitrum, the second-largest contributor, while its underlying stability could still be globally blocked by a single configuration change. This is not a consensus layer vulnerability, nor an attack on the smart contract, but rather a routine operational error by an engineer at a publicly traded company. The solution is a rollback, not a refactoring.
When the shareholder letter stated that "more usage relies on Coinbase's infrastructure," investors had reason to question whether this infrastructure's ability to defend against operational errors kept pace with its market size and strategic position.
Coinbase's 2026 strategy is clear and well-defined, but its execution never relies on slogans, but rather on the performance of specific products at specific times. Coinbase's performance over the past month demonstrates that this highly anticipated on-chain infrastructure is still on its way from "workable" to "reliable."
If users worry about slowdowns or lost funds every time they transfer money during peak hours, and if a single configuration change can delay transactions across the entire network, then "breaking the world onto the blockchain" is less an executable plan and more an unfulfilled promise. Coinbase promised to complete its transaction pipeline reconstruction by early March. Whether Base can truly escape the cycle of "fixed but not fully fixed" by then will determine the credibility of this strategic narrative.
