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'BASE' by Coinbase: Ushering in a New Era of Mainstream Crypto Adoption
Coinbase, a highly reputable exchange and prominent cryptocurrency platform based in the United States, has gained attention for its proactive stance in challenging the SEC's perspective on the classification of most crypto-assets as securities. The company is also embarking on a journey of global expansion, commencing with its entrance into the Canadian market.
In a move to increase mainstream adoption for crypto-assets, the company has recently launched the public mainnet for its eagerly anticipated “Base Layer 2” blockchain network on August 9th. The Base network is designed to enhance the efficiency and user interfaces of decentralized applications (dapps) on Ethereum.
Key Features of Base Network
Enhanced Speed and Cost Efficiency: Base inherits Ethereum's security while offering faster and more economical transactions, addressing the issue of high gas fees on the Ethereum blockchain.
Full Compatibility with Ethereum: Base is fully compatible with the Ethereum Virtual Machine (EVM), ensuring seamless integration and interoperability with Ethereum's existing ecosystem.
Integration with Coinbase Products: Base integrates seamlessly with Coinbase's products and services, providing users with a cohesive experience across the platform.
Base is built on Optimism
Base is constructed on the OP Stack, an open-source framework created for optimistic rollups. This framework is developed in collaboration with Optimism, a leading developer in this technology.
To mark the launch, Coinbase organized the Onchain Summer Web3 Festival, featuring diverse activations in art, gaming, and music. Over 50 prominent brands, including Coca-Cola, Nouns, Friends With Benefits, and Atari, are participating in the festival by hosting non-fungible token (NFT) mints on the Base network.
What are Layer 2 Rollups?
Layer 2 rollups aim to alleviate congestion on the Ethereum blockchain by executing transactions on a separate network and periodically transferring batches of these transactions to the Ethereum main chain. This approach enhances transaction speeds and reduces costs, similar to how patrons order multiple items and settle their bill at the end of the night.
Strong Start for Base
In the days following its launch, Base has gained significant traction, ranking fifth among all Ethereum layer 2 networks in terms of total value locked (TVL). It has attracted over $200 million in TVL, accounting for approximately 2% of the $10.6 billion TVL across all networks. Leading layer 2 networks like Arbitrum and Optimism have considerably higher TVL.
Base enters a competitive field with several other layer 2 solutions, including:
Diverse Applications on Base
Base already boasts over 100 dapps and service providers, including popular platforms like Uniswap, Sushiswap, Aave, and wallet providers like Exodus and Trust Wallet. Notably, the social app Friend.tech has garnered attention for its unique approach to tokenizing users' social networks.
What is the Potential for BASE?
The layer 2 networks, including Base, offer a glimpse into the potential growth of blockchains to support new use cases and attract a broader user base. Coinbase, as a gateway for new users, has the opportunity to bring millions into the crypto economy. However, enhancing user experience and security remains crucial.
The adoption of layer 2 networks may impact the value accrual of native tokens and the underlying base-layer blockchains. Factors such as transaction fee demand, growth, and interoperability will play key roles in shaping these dynamics.
Base's success could significantly boost Coinbase's revenue through sequencer fees and trusted applications built on the network. Additionally, the impact on the Optimism governance token's performance and funding for ecosystem development is noteworthy.
The launch of Coinbase's Base Layer 2 blockchain network represents a significant step toward improving the efficiency and accessibility of decentralized applications on Ethereum. As the layer 2 landscape continues to evolve, it offers insights into the potential future of blockchain technology and its impact on various industries.
This Week By the Numbers 📈
The FOMC has indicated intentions to increase rates in the future, emphasizing its concern over "unacceptably high" inflation levels. They expressed the need for further evidence to confirm progress towards the committee's 2% inflation target.
The average 30-year fixed mortgage rate has surged to 7.4%, marking its highest point since 2002.
Crypto markets experienced a sharp decline this week, witnessing a swift liquidation of $769 million within 30 minutes and a staggering $1 billion within 24 hours. This drop was triggered by news of a potential $393 million Bitcoin sale by SpaceX and the bankruptcy filing of Evergrande, a Chinese property developer.
The United States faced significant financial setbacks, with the nation's wealth plummeting by $5.9 trillion. This reversal follows a notable $19 trillion wealth increase in 2021. While average wealth in the U.S. contracted by nearly $27,000 in 2022, median wealth saw an increase of $14,460.
$BNB token price continues to experience downward pressure as investor speculate on Binance’s solvency
Top Stories 🗞️
China’s heavily indebted property giant Evergrande Group on Thursday filed for Chapter 15 bankruptcy protection in a U.S. court. In a filing with the Manhattan bankruptcy court, the company referenced restructuring proceedings in Hong Kong, the Cayman Islands and the British Virgin Islands. In a separate statement, Evergrande on Friday said that it will ask the U.S. court for “recognition of the schemes of arrangement under the offshore debt restructuring for Hong Kong and the British Virgin Islands.” It added, “The application is a normal procedure for the offshore debt restructuring and does not involve bankruptcy petition.” The world’s most indebted property developer defaulted in 2021 and announced an offshore debt restructuring program in March. Trading of Evergrande shares have been suspended since March 2022.
The European Union continues to push hard for clear regulations for the Bitcoin and crypto industry. After the final vote on the European Union’s draft legislation to regulate cryptocurrencies, the Markets in Crypto-Assets Regulation (MiCA), was postponed until April 2023 due to technical difficulties, the European Parliament yesterday approved new banking regulations. The Economic Affairs Committee of the European Parliament on Tuesday approved a bill to implement the final stage of the post-financial crisis global bank capital rules (Basel-III) starting in January 2025. It stipulates that volatile cryptocurrencies like Bitcoin will be considered the riskiest investment. The new directive stipulates that banks can hold a maximum of 2% of their capital in Bitcoin and other cryptocurrencies.
Judge Analisa Torres has granted a request from the United States Securities and Exchange Commission (SEC) to file a motion for leave to file an interlocutory appeal in its case against Ripple Labs. The securities regulator sent a letter to Torres on Aug. 9, saying her decision could affect multiple pending court cases. According to U.S. law, an interlocutory appeal occurs when a ruling by a trial court is appealed while other aspects of the case are still proceeding. The decision allows the SEC to file a motion by Aug. 18 requesting permission to bring a case to the U.S. Court of Appeals for the Second Circuit. Ripple will also be able to file an opposition to the motion. The decision comes just a few hours after Ripple Labs voiced opposition to a potential appeal in the case. Ripple’s lawyers put forth three main arguments in opposition to the SEC’s request.
A Chinese government official has been sentenced to life in prison for illegitimate business operations related to running a 2.4 billion Chinese yuan ($329 million) Bitcoin mining enterprise and for unrelated charges of corruption. According to local media reports, the Intermediate People’s Court of Hangzhou City sentenced Xiao Yi, a former member of the Jiangxi Provincial Political Consultative Conference Party Group and vice chairman, to life in prison for corruption and abuse of power on Aug. 22. The corruption charges stem from non-crypto-related activities of bribery from 2008 to 2021. The abuse of power charges, dating from 2017 to 2021, stem from providing financial and electricity subsidies to Jiumu Group Genesis Technology, a firm based in the city of Fuzhou that at one point operated more than 160,000 Bitcoin mining machines.
Apple has tentatively agreed to a $500 million settlement after admitting to slowing down older phones. The deal would provide small payouts for many iPhone owners in the US, plus greater compensation for named class members and attorneys. It covers people who bought any product in the iPhone 6 and 7 lineup — which Apple secretly throttled to conserve battery life. As Bloomberg Law notes, the settlement was filed in a California court last Friday and is awaiting final court approval. The deal — which took months to negotiate — would resolve dozens of class action lawsuits that were filed between 2017 and 2018, then later consolidated into one complaint. By default, Apple will offer $25 to any current or former owner of a covered iPhone. Named class members will receive $1,500 or $3,500, and around $90 million will go toward attorneys. The settlement has a minimum payout of $310 million, so the payment might increase if few people file claims. Conversely, if payments exceed the $500 million cap, each iPhone owner will receive less money.
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About the Author: Tatiana Koffman
Hi there and thanks for reading! If you stumble upon my newsletter, you will notice that I write about money, economics, and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital, and Cryptocurrencies. I write to make financial topics more accessible and create equal opportunity for the next generation of investors. I have personally invested in 20+ companies and funds (👉 my portfolio).