The Ethereum community seems to have a bullish view of Coinbase’s newly announced Layer 2 network, Base, which has been described as a “massive vote of confidence” and a “defining moment” for the blockchain network. This has been described as a “massive vote of confidence” and a “defining moment” for the blockchain network.

Protected by Ethereum and powered by Optimism’s Layer 2 network, Base’s long-term goal is to evolve into a network that facilitates the development of decentralized applications (DApps) for use on blockchains. According to Coinbase CEO Brian Armstrong, the layer 2 network is now in the testing phase.

Members of the cryptocurrency community such as Ryan Sean Adams, host of the Bankless Show, are of the opinion that the move “is a great vote of confidence for Ethereum.” If this is proven to be the case, it could set a precedent for cryptocurrency firms and financial institutions to use Ethereum as their preferred settlement layer.

Since its founding in 2012, Coinbase has amassed approximately 110 million verified users and has worked with 245,000 businesses in more than 100 countries. According to CoinGecko, your cryptocurrency exchange it is the second largest in the world in terms of trading volume. The first place goes to Binance.

“This alone will make the total number of crypto native users 10x,” Adams said, adding that “if Coinbase converts 20% of its 110 million verified users to Layer 2 users in the next few years,” this for yes will only multiply by 10 the total number of verified users. users

Adam also praised Coinbase for its decision to open source code base, and is of the opinion that the recently introduced Layer 2 network would result in increased demand for block space on Ethereum.

Meanwhile, Sebastien Guillemot, co-founder of blockchain infrastructure firm dcSpark, suggested that Coinbase made the wise decision to go with a layer 2 rather than a standalone sidechain, noting that “almost all” cryptocurrency transactions and value locked in Ethereum reside in layer 2s these days. Guillemot was referring to the fact that “almost all” cryptocurrency transactions and value locked in Ethereum reside at Layer 2.

In a tweet dated Feb. 23, Ryan Watkins, co-founder of cryptocurrency-focused hedge fund Syncracy Capital, called the announcement a “defining moment” in the Ethereum accumulation ecosystem. He went on to say that “there was probably no one better” positioned than Coinbase to onboard the next 10 million Ethereum consumers and institutions.

However, there were some bears among the bulls.

Gabriel Shapiro, general counsel at investment firm Delphi Labs, explained in a February 23 Twitter post that launching a centralized Layer 2 network “opens the door” to unwarranted SEC scrutiny. He was referring to the fact that the SEC has authority to investigate investment firms.

“A centralized L2 that trades many tokens, any number of which could be presumptive securities, or does many DeFi transactions that could possibly be regulated (security swaps, etc.), opens the door for the SEC to do new types of claims in the secondary market,” Shapiro wrote, adding that “in my opinion, this will expedite the SEC’s “secondary market” agenda regarding blockchain securities issues, because they cannot allow a registrant of the SEC “get away with it” with possible violations and

The concerns raised by Shapiro come at a time when the SEC has recently intensified its enforcement operations against a number of stablecoin issuers and staking service providers.