Base has been at the top of everyone’s minds it seems. Not too long after Blast mainnet’s launch as well as EIP-4844, Base has attracted quite a bit of attention, with TVLs up across the board and several tokens popping off. Even the COIN stock is performing very well, recently shooting into the $260+ range, a realm the market had not ventured into since 2021.
Last week we covered IntentX’s plans to move their homechain from Base to Mantle; but there’s multiple other projects staying put on the chain. Some potentially interesting protocols have deployed instances, including a couple RWA protocols and several SocialFi projects have chosen to make the chain their Base. In this edition, we’ll go over how Coinbase aims to get users onto the chain, a couple interesting projects, and more.
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Background on Coinbase Wallet
While Coinbase isn’t as big on a global scale as people might expect (~6% of total CEX volume), it plays an important role in the US. If the recent sentencing of SBF represents anything, it might show that it is time for attention to shift back to legitimate actors in the US crypto space e.g. Kraken, Coinbase, etc. Brian Armstrong has taken it upon himself and the company to represent American crypto interests after the industry may have taken quite a hit in the eyes of lawmakers.
The main thing to look at with Coinbase is simply the fact that it is the largest CEX in the US, the wealthiest retail and institutional market. Now with the BTC ETF approved and some speculation around a potential ETH ETF, some more credibility has been granted to crypto when it comes to the perception of skeptical Americans.
Part of the speculation around Base chain’s success is its close proximity to Coinbase, similar to BSC (Binance Smart Chain) which soon saw DeFi inflows from the Binance CEX last bullrun. There are some new plans ahead relating to how Coinbase aims to use its exchange as a funnel for onchain access, specifically to its own Base chain.
The Base wallet itself plays a key role in a lot of this. The team recognizes the challenges of onboarding users to crypto, and the need to convey the value of crypto and the importance of a self-custody wallet paired with the Coinbase app. The team also sees having a self-hosted wallet as crucial.
Payments are a key focus for Coinbase Wallet, with the launch of gasless sends for USDC and a feature allowing users to send crypto via text, which abstracts gas fees and increases usability across messaging apps. In practice this works similarly to how Apple Pay users can simply send each other money via imessage.
Coinbase Wallet Onchain Integration
The Coinbase wallet tech stack now also includes the Smart wallet, making account abstraction possible, as well as using exchange balances for on-chain transactions, a pretty significant feature.
The Coinbase wallet tech stack now also includes the Smart wallet, making account abstraction possible, as well as using exchange balances for on-chain transactions, a pretty significant feature.
For many, bridging to and from CEXs is annoying, and users prefer to keep funds either onchain or offchain. Consistently dipping between CEX and onchain can provide certain benefits like potentially obscuring wallet identities, but most users experience a segregation between their onchain funds vs their exchange balances. Exchanges are another pain point in the crypto experience; requiring yet another login, 2FA, etc., not to mention long deposit queues which users might sometimes experience.
Of course, these are the issues that crypto natives experience; there’s a large swath of the crypto-curious population that has never ventured onchain. For these folk, a self-hosted wallet that simply reflects their exchange balance would be immensely helpful. Solutions like this are being implemented across the board, with several protocols allowing users to login via Web2 accounts, access 1-click gasless trading, etc.
The Coinbase smart wallet is first being made available for testing on Base’s Sepolia testnet. This is a big advantage for the chain; while the Coinbase smart wallet could be used to access a variety of chains it would be expected for Coinbase to give their own Base chain preferential treatment.
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