• Coinbase has announced that it is building its layer 2 blockchain using the OP Stack in collaboration with Optimism.
• Optimism’s native token, OP, rose 6.5% following the announcement.
• The layer 2 blockchain, called Base, will not have a native token unlike other layer 2 blockchains like Polygon (MATIC).
Optimism Token Price Rises 6.5% Following Coinbase Announcement
Coinbase recently announced they are building their layer 2 blockchain using the OP Stack in partnership with Optimism. The news caused optimism’s native token, OP, to rise by 6.5%.
What is Layer 2?
Layer 2 is an additional protocol built on top of a base-level blockchain such as Ethereum or Bitcoin that allows for faster and more efficient transactions than what’s possible on the underlying network. It works by offloading some of the processing power from the main chain onto another network which can handle larger transaction volumes and lower costs for users.
Base – A Layer 2 Without Native Tokens
Coinbase’s layer 2 blockchain, called Base, will not have a native token like other layer 2 blockchains such as Polygon (MATIC). The first stage of Base will be a testnet but it is expected that when its mainnet launches, it will support features such as decentralized exchanges (DEXs), lending protocols and dapps with better performance than similar products running on protocols like Arbitrum, Polygon and Optimism.
NFT Marketplace Launched Last Year
In addition to its involvement in Layer-2 scaling solutions, Coinbase also launched an NFT marketplace last year but its volume has been low compared to competitors OpenSea and LooksRare according to Dune Analytics data.
Conclusion
Coinbase’s foray into Layer-2 solutions and NFT marketplaces makes them one of the most innovative players in crypto today. As they continue to develop new technologies and applications within this space, we should expect further growth from both Optimism tokens (OP) as well as Coinbase itself.