Coinbase Adopts Layer 2 - The Daily Gwei #95
Coinbase Adopts Layer 2 - The Daily Gwei #95
A surprise entrant in the Ethereum scaling war effort.
Optimism announced yesterday that they are now integrated into Coinbase’s mobile wallet which means users can now view their balances and send transactions using Optimistic Ethereum. As you can probably imagine, this is kind of a big deal.
This integration hits on the second point in my piece about Ethereum scaling - that is, high fees on Ethereum have given the entire ecosystem a “common goal” to work towards. That common goal is the adoption of scaling solutions which is exactly what so many projects in the Ethereum space have done recently and will continue to do over the next few months. In saying that, Coinbase integrating Optimism Ethereum this early into the game surprised even me.
I also wrote in this piece a few weeks ago that I thought the most interesting project to adopt layer 2 would be Uniswap but I actually think Coinbase adopting it for their mobile wallet is just as interesting and potentially even more important. This is because Coinbase is not a DeFi project - they are a major centralized player that other centralized players look to for signal. You may also remember that Bitfinex (a centralized exchange) integrated OMG Network recently. Though, it’s good to keep in mind that the Coinbase integration is only for their mobile wallet - not for Coinbase.com or Coinbase Pro and the Bitfinex integration seems to have had very slow adoption so far.
Even still, with this move, Coinbase has signaled to the wider Ethereum and crypto ecosystem that even a big centralized company can move fast on adopting early-stage technology provided that there is enough incentive and demand to do so. It’s interesting because there are other early-stage technologies like the lightning network that Coinbase has not adopted across any of their products even though it is a much older technology than Optimism. I believe this is because there is next to no demand to use the lightning network whereas I imagine many Coinbase mobile wallet users are active Ethereum users (whether that is in DeFi or something else).
If the Coinbase integration wasn’t enough for you, the Synthetix team also announced yesterday that they have launched the second phase of their Optimistic Ethereum trial which will expand the numbers of users that can participate. We also had StarkWare partner up with ParaSwap and Aztec unveil their layer 2 zkRollup network just in the last few days - the future has never been brighter for layer 2 on Ethereum.
Have a great day everyone,
Anthony Sassano
All information presented above is for educational purposes only and should not be taken as investment advice.