- Coinbase creates a new L2 network.
- A new layer-2 Ethereum Network Base could bring a new future for the DeFi community.
- Coinbase accused it of moving towards the same path it had previously revolted against.
The CEO of Coinbase, Brian Armstrong, announced his belief that centralized firms have responsibilities to monitor the transactions that go on and also help carry out Anti-Money Laundering checks.
At its inception, Coinbase’s innovation, the layer-2 blockchain network base, could be subjected to transaction surveillance and extensive anti-money laundering inspections.
Brian confirmed to a reporter on Bloomberg radio that Coinbase currently has some centralized components but said they hope to make it more decentralized in the future.
Nonetheless, the CEO stated that Coinbase would implement transaction monitoring and AML regulations for the use of its layer-2 network for additional security. Coinbase will also be in charge of monitoring transactions during the early stages of the innovation.
Coinbase’s latest innovation is called Base, a layer-2 Ethereum network that offers a low-cost, developer-friendly, and safe way for users to build decentralized apps, according to information dropped by Coinbase.
The network is currently being developed using “OP Stack” used by Optimism, and it will enable high-speed transactions on Ethereum.
The network was unveiled on February 23, and it is currently in its net test phase, with no information from Coinbase on its primary net launch date but with an expectation for it to launch by Q2 of 2023.
Decentralization advocate Chris Blec raised concerns about Coinbase’s latest creation in a blog post before the launch of the test net. He claimed that the layer-2 infrastructure was highly centralized and that Coinbase would use Sequencers, nodes that are used to construct and execute Layer-2 blocks while users’ actions are being transmitted from Layer 2 to Layer 1.
Coinbase, a licensed money transmitter platform being the sole sequencer for Base, raised concerns about if Base would also put the requirement for the Know Your Customers, which would put it on the list as the first-ever Layer 2 to do so.
Coinbase has neither declined nor confirmed the speculations on whether they would be implementing the KYC and AML measures. Blec claimed that DeFi was heading towards being controlled by the same entities it was created to revolt against.
The crypto community has, however, taken a different approach to the news of the creation of Base, with many viewing it as a vote of confidence for Ethereum as the network was built with it in mind.
Conclusion
Coinbase has yet to respond to news outlets on the other aspects of the innovation, like if Base would require KYC. Still, without that information, many of the crypto community have expressed joy at creating the Base Layer-2 network.
Coinbase has also yet to put out information on when the main net of Base would be launched.
