Tokens of Optimism Ecosystem Surge as Coinbase Unveils Its Layer 2 Base

Coinbase said Thursday that it is using Optimism's technology to launch an Ethereum layer 2 scaling product called Base.

AccessTimeIconFeb 24, 2023 at 9:05 a.m. UTC
Updated Feb 24, 2023 at 6:32 p.m. UTC
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Nasdaq-listed centralized digital-assets exchange Coinbase (COIN) on Thursday announced an Ethereum scaling product that will use layer 2 network Optimism's technology. The news has lit a fire under the cryptocurrencies from the Optimism ecosystem.

Data from CoinGecko shows VELO, the native token of the Optimism-based decentralized exchange Velodrome Finance, has gained 21% in the past 24 hours. The token has more than doubled in the past seven days. Velodrome is the ninth-largest decentralized exchange in the world, accounting for 2.5% of the total market volume.

Optimism-native lending protocol Sonne Finance's SONNE token has jumped 82%, taking its seven-day rally to over 300%.

OPX, the governance and utility token of OPX Finance, has skyrocketed by 144%, while perpetual-focused decentralized exchange Perpetual Protocol's PERP token has seen a 42% rise in its market value. Other lesser-known names like THALE, HND, RING and PICKLE have also chalked up double-digit gains in the past 24 hours.

Optimism's OP token has jumped over 10%, reaching a two-week high of $3.10, CoinDesk data shows.

Coinbase launched the testnet version of its new Ethereum layer 2 scaling product, Base, announcing that it will be interoperable with other blockchains like Solana but won't have its native token.

"Base aims to be decentralized, permissionless and open to anyone with the vision of creating a standard, modular, rollup agnostic Superchain powered by Optimism," the exchange said. "We're joining Optimism as a core dev on the open source OP Stack and working to create a thriving community of other developers."

The speculation on Crypto Twitter is that Coinbase is making a know-your-customer-based decentralized-finance (DeFi) portal with the help of Optimism, which will open doors for institutional participation in democratized finance.

Coinbase's foray into the world of Ethereum layer 2 comes a year after the exchange launched a non-fungible tokens marketplace. According to data from Analytics Insight, Coinbase Ventures is one of the most active venture-capital firms in crypto, with more than 240 investments.

So, observers are optimistic about Base evolving as a go-to place for decentralized applications.

"The collaboration strives to upgrade Optimism Mainnet, Base, and other L2s to an initial superchain," pseudonymous analyst Route2FI tweeted. "The hope is that the superchain can blossom into a sprawling network that maximizes interoperability, shares decentralized protocols and standardizes its core primitives."


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Omkar Godbole

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

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