Today, cryptocurrency exchange Coinbase launched the testnet for Base, an Ethereum Layer 2 blockchain network. Their stated goal is to create a developer-friendly and low-cost environment. He believes that making it easier to build decentralized apps will encourage more user adoption of blockchain, no doubt similar to app stores making smartphones more attractive.

The base will also be home to the crypto exchange’s on-chain products. The Uniswap decentralized exchange (DEX) typically has higher daily trading volumes than Coinbase. By creating a DeFi ecosystem, Coinbase can earn revenue from its dApps and a proportion of the network fees on the Base chain.

No Coinbase token

Coinbase wanted to emphasize its platform’s low fees and that it does not intend to launch a token for the network. The lack of a token means Coinbase is less likely to attract regulatory interest on the subject. The collapse in the price of FTX’s FTT crypto token sent the cryptocurrency exchange crashing, exposing its alleged misuse of client funds.

Binance, the largest crypto exchange, operates a layer 1 Ethereum-compatible blockchain. Its token has a market capitalization of $49 billion. Another exchange, Crypto.com also has a token worth over $2 billion.

Meanwhile, Coinbase intends for Base to be a bridge between other Ethereum Layer 2 networks, as well as other blockchains. Base will use the Optimism package as its underlying technology.

While the network will initially be centralized, the intention is to decentralize over time.