On Wednesday, Coinbase’s main Twitter account posted a six-second video of a blue dot fading into a black background. Thursday’s date—Feb. 23, 2023—was all that was revealed. Speculation on Crypto Twitter ran rampant.
🔵 2.23.23 pic.twitter.com/DRvvBS5y9v
— Coinbase (@coinbase) February 22, 2023
The publicly traded cryptocurrency exchange later on Thursday announced it was releasing Base, an ecosystem built on top of the Ethereum blockchain that allows developers to build decentralized applications, or dapps.
“To bring in billions of users to the cryptoeconomy, dapps need to be easier, cheaper, and safer to interact with,” the company wrote in a blog post. “For this to happen, we need to make it even easier for developers to build these dapps.”
Coinbase’s latest offering continues a push toward a long-stated goal to make cryptocurrency and blockchain technology, which can appear impenetrable to lay consumers and some developers, accessible to a wider audience. And for a cryptocurrency exchange heavily dependent on trading fees, the launch of the new developer ecosystem is yet another attempt to diversify the company’s products amid the extended chill of Crypto Winter.
1/ 🔵 We’re excited to announce @BuildOnBase.
— Coinbase (@coinbase) February 23, 2023
Base is an Ethereum L2 that offers a secure, low-cost, developer-friendly way for anyone, anywhere, to build decentralized apps.
Our goal with Base is to make onchain the next online and onboard 1B+ users into the cryptoeconomy. Pic.twitter.com/RmwZFJzGGs
Base, which Coinbase describes as “secure, low-cost, [and] developer-friendly,” is built on top of Ethereum, one of the largest and most heavily used blockchains. This makes it a layer-2 network, or a system built on top of another blockchain. Fees paid to operate on Base will be paid with Ether, Ethereum’s native cryptocurrency, not with a new token, the company said.
To launch Base, the cryptocurrency exchange is partnering with Optimism, another layer-2 network that makes using Ethereum less expensive for users and developers. (Every time Ethereum users post a transaction on the blockchain, they must pay “gas,” or a fee, with Ether. Optimism lets developers process these transactions in bundles, which reduces the gas.)
To commemorate the announcement, Coinbase released a new non-fungible token collection of, unsurprisingly, blue dots. The NFTs are free to mint, or download into a crypto wallet, and will be available through Sunday.
Despite the blue dot fervor, Coinbase’s business took a heavy hit in 2022, as several prominent crypto companies declared bankruptcy, including rival exchange FTX.
On Wednesday, Coinbase released fourth-quarter earnings that, while beating analysts’ expectations, were markedly lower than a year earlier. The company’s full-year 2022 revenue was down 57%, and it lost $557 million in the fourth quarter compared with a profit of $840 million in the same quarter in 2021.
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