First Mover Americas: Coinbase's New Layer 2 Network Off to Shaky Start

The latest price moves in crypto markets in context for Feb. 24, 2023.

AccessTimeIconFeb 24, 2023 at 1:06 p.m. UTC
Updated Feb 24, 2023 at 2:30 p.m. UTC

This article originally appeared in First Mover, CoinDesk’s daily newsletter putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

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Crypto exchange Coinbase’s new layer 2 blockchain Base had a rough start on Thursday, drawing a stream of complaints from users on social media. The test network for the Ethereum scaling tool experienced problems related to an issue with Coinbase wallets, which incorrectly estimated how much gas was required to execute transactions, meaning the transactions couldn’t be processed. Plus, Coinbase software engineer Roberto Bayardo said that high demand from users overwhelmed the protocol. Base forms the core of Coinbase’s strategy to expand into the developer business in order to diversify its revenue.

Yearn Finance’s YFI token surged to its highest level in nearly six months Friday after developers said they will introduce a liquid staking derivatives token. YFI surpassed $10,000 in Asian morning hours to prices not seen since September 2022, as part of a 39% increase this week, with trading volume increasing fivefold. Developers said the forthcoming token would give users exposure to a basket of liquid staking derivatives, which analysts say can help active investors diversify risk.

The Litecoin Foundation will work with Metalpha Technology (MATH), a Nasdaq-listed wealth manager, to develop less carbon-intensive mining products for the Litecoin ecosystem. The partnership will focus on facilitating renewable energy use and increasing energy efficiency. Metalpha will also develop financial derivative products for LTC tokens and support miners with hedging products against market risk.

Chart of the Day

  • The chart shows the number of transactions on Ethereum layer 2 scaling tools Arbitrum and Optimism has surpassed that on Ethereum's mainnet for the first time on record.
  • The data shows an increased preference for cheaper and faster layer 2s because of rising fees on Ethereum. Average transaction fees on Ethereum have tripled since November, according to IntoTheBlock.
  • "Progress towards a roll-up centric Ethereum is already on its way and is bound to continue to accelerate with Base's upcoming launch," IntoTheBlock said in the weekly report published early Friday.

- Omkar Godbole

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Jamie Crawley

Jamie Crawley is a CoinDesk news reporter based in London.

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

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