In a strategic move aimed at improving efficiency and scalability, popular cryptocurrency exchange Coinbase has revealed plans to migrate a significant portion of its customers' and companies' stablecoin USD Coin (USDC) accounts. company to Base, its layer 2 Ethereum chain .
An important change for Coinbase
This news, Chia by Coinbase vice president Max Branzburg in a recent post on Reduced fees and faster payment times.
“This allows us to manage and secure customer funds with lower fees and faster settlement times without impacting the Coinbase user experience,” he said.
The transition is expected to only affect Coinbase.com accounts, aiming to leverage Base's ability to streamline processes without impacting the user experience. Notably, this change does not affect Coinbase Wallet users, who remain responsible for managing their private keys independently.
Ratio 1:1 Customer Assets
Currently, tokens held in a Coinbase.com account are held by Coinbase in a wallet secured by multi-party computation, ensuring a robust security framework. Branzburg reiterated Coinbase's commitment to maintaining a 1:1 customer asset ratio and emphasized that funds are not lent unless there are clear instructions.
More information about Coinbase
Base, launched as an Ethereum scaling solution on August 9, 2023, leverages optimistic rollups to facilitate Off-Chain storage of transaction data while sending transactions translated to Ethereum's base layer. Coinbase's decision to open source Base in October underscores its dedication to transparency and community-driven development. As of now, Base is ranked as a layer 2 Ethereum platform fourth largest by total value locked, with $2.63 billion in assets, according to L2BEAT data. The platform reached the milestone of 2 million daily transactions on March 16, along with a continuous increase in the number of new daily users, signaling its growing prominence in the Ethereum ecosystem .
Reaction of the cryptocurrency community
David Hoffman, who co-chairs the Ethereum-centric Bankless program, called the exchange's on-chain move a significant step toward realizing a decentralized financial ecosystem. Hoffman emphasized the transformative potential of such initiatives in paving the way for future financial infrastructure built on blockchain technology. He declared:
“Eventually, all financial institutions will move their operations on- chain and they will do it better.”
Agreeing with Hoffman's point of view, Bankless Ryan co-host Sean Adams predicted that Coinbase's decision will set a precedent for cryptocurrency exchanges as well as traditional banks. However, not all All voices support Coinbase's move to Base. Several users, including “callmeKappa. ALGO,” has expressed concerns about Base's current level of centralization, with Coinbase Vai as the sole chain , according to L2BEAT data . This centralized control has raised concerns about Base's autonomy and resilience as a decentralized platform.
