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Coinbase Exchange Base L2 Unveils Criteria For Mainnet Launch, Prioritizing Safety And Security

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Base, the Ethereum-based Layer-2 (L2) blockchain protocol affiliated with leading American crypto trading platform Coinbase, has unveiled the fundamental requirements that will guide its highly anticipated mainnet launch. According to a recent announcement from the official Twitter account of the Base protocol, the success of the mainnet launch hinges entirely on implementing robust safety and security measures.

In a departure from the conventional design models of most Layer-2 protocols, Base made an amazing revelation by stating that it does not intend to introduce a native token. Though not entirely novel, this announcement sets Base apart in the L2 landscape. The protocol acknowledged the entry of numerous innovative projects building on its platform since the launch of its testnet and expressed its intention to expand this ecosystem further over time.

Base Prioritizes Reliability And Scalability In Mainnet Launch Preparations

As part of its preparations for the mainnet launch, Base Protocol has dedicated significant efforts to audit its codebase and infrastructure thoroughly. This comprehensive evaluation ensures the protocol’s reliability and resilience. Additionally, the protocol has undergone rigorous load testing to ensure scalability and has extended support to @optimismFND’s Bedrock upgrade while prioritizing a seamless developer experience.

Since its testnet went live earlier this February, it has achieved two of the five criteria to determine its readiness for the mainnet launch. These accomplishments include the successful testnet Regolith hardfork and the completion of the infrastructure review in collaboration with the OP Labs team. However, the crucial milestone of upgrading the Optimism mainnet to Bedrock remains to be achieved.

Furthermore, Base is committed to finalizing its protocol audits, ensuring the absence of critical issues, and maintaining the stability of its testnet. Following the mainnet launch, the protocol will enter the Genesis Window, a period marked by Decentralized Applications (DApps) deployment. It has pledged to provide hands-on support to developers during this phase and plans to recognize early DApps launching on its platform.

The significance of Layer-2 protocols in the evolution of decentralized infrastructures cannot be overlooked as the blockchain ecosystem matures. In addition to Base, Shiba Inu is actively developing its own L2 solution called Shibarium, joining many initiatives to scale the Ethereum protocol. Post-launch, the Coinbase-linked protocol will also face competition from Arbitrum and Polygon zkEVM.

Layer-2 Protocols and the Future of Decentralized Infrastructures

Layer-2 protocols, including Base, play a vital role in scaling the Ethereum protocol and facilitating the growth of decentralized applications. It aims to establish itself as a secure and reliable L2 protocol, actively supporting developers and fostering innovation. The success of Base and other Layer-2 protocols will contribute to the maturation of blockchain technology.

Related Reading: | Shiba Inu L2 Mainnet Launch Time Released; AI Integration Is Also In The Cards

Ethereum L-2’s Unique Addresses Jumps By Over 790% In 2023

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Ethereum’s layer 2 scaling solution Arbitrium continues to rule the roost as its unique addresses count reached an all-time high of nearly 2.92 million addresses, according to block explorer Arbiscan.

Over a year, the fourth-largest blockchain in terms of total value locked [TVL], has recorded a jump of a whopping 792%.

Not only that, Arbitrum flipped Ethereum itself in daily transactions, establishing its dominance in the layer 2 landscape.

Data from Arbiscan also shows that the number of daily transactions on the blockchain has skyrocketed from 159,919 on January 1 to over 1,103,398 at the time of writing this article.

This represents an increase of about 590% in less than two months.

In comparison, the number of daily transactions on Ethereum increased a meager 46% in the same period to 1,084,290, per Etherscan.

Arbitrum’s recent expansion can be attributed to GMX, a decentralized spot, and perpetual exchange that went live in September 2021 and has since experienced rapid development.

GMX presently makes up around $457 million, or 30%, of all of Arbitrum’s TVL. Although its presence there is only around a fifth as large, the trading platform is also deployed on the Avalanche [AVAX] blockchain.

Decentralized finance platforms such as GMX utilized smart contracts to facilitate users to transact without the need for middlemen, and users’ fees are collected as a mechanism to compensate liquidity providers and community members.

Recently, GMX has been so prosperous that over the course of a 24-hour period last weekend, it generated more revenue from transaction fees than the Ethereum blockchain did.

Ethereum L-2s Were Seen As Much-Needed Answer To ETH’s Mounting Prices

Rollups [also known as layer 2 platforms], which are secondary blockchains that bundle and “settle” transactions on Eth, were seen as saviors to the ETH’s mounting accessibility issue when the token’s transaction prices soared last year due to increased user demand.

These L-2s utilize the security infrastructure already in place on Ethereum, as opposed to sidechains like Polygon PoS that bundle transactions and settle them on the blockchain.

Optimism and Arbitrum were the first significant roll-up chains to enter the market; they were both dubbed “Optimistic” rollups due to the method they employ to borrow Ethereum’s security.

At press time, Ethereum’s one-day fees stood at $6.4 million, while Arbitrum’s one-day fees sit at roughly $154k, which is less than 2% of Ethereum’s network fees for the day, as per cryptofees.info.

Ethereum L2s Beat ETH In Transaction Volume

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Ethereum layer-2 networks Arbitrum and Optimism have recorded a surge in transaction volume in the span of just three months, surpassing even that of the mainnet Ethereum.

Data from Dune Analytics showed that Arbitrum and Optimism combined processed over 1.12 million transactions while Ethereum processed over 1.06 million transactions on Jan. 10.

On the other hand, since late October, transactions on the Ethereum network have decreased by roughly 33%, according to Etherscan.

With regards to the l2s, Optimism [OP] for one, has kickstarted the year on an optimistic note as it enjoys a bull run. But, has suffered stagnancy in terms of total value locked [TVL].

In comparison to that, Arbitrum has reportedly outpaced the other top Layer 2 blockchains, such as Optimism and Polygon, when it comes to TVL. The former, however, is unaffected as it continues to increase in tempo and rule the L2 region.

Nonetheless, L2 transactions boost Ethereum’s appeal when they are included in the mix.

Ethereum’s Layer-2 And Staking Fuels Usage

L2beat data showed that towards the middle of October, the number of L2 transactions per second actually surpassed that of Eth layer 1 transactions, and it remained higher for the vast majority of the time afterward.

The term “Layer 2” is used to describe an additional framework or protocol that is implemented on top of an existing blockchain system.

Overall, 2022 was a mixed bag for the leading smart contract platform Ethereum [ETH] as the network eventually shifted from proof-of-work [PoW] to proof-of-stake [PoS].

This includes its first-ever price slide below the high of the previous cycle.

Another factor driving up ETH usage is the upcoming Shanghai hard fork of the most popular altcoin, which is anticipated to occur in March. Staking risk will be reduced with this upgrade by withdrawing staked Ether [stETH] from the Ethereum Beacon chain.

In preparation for the upgrade, the prices of the Lido DAO [LDO] and Stakewise [SWISE] tokens, two systems that permit Ether staking, have increased by double digits over the previous week.

With $23.06 billion in value locked on the multiple dApps running on the network, Ethereum remains to be the most valuable protocol in terms of total value locked (TVL), according to data from Defi Llama.

Hydra brings the fun back in app building

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Hydra is a set of technologies meant to help Cardano (ADA), the world’s biggest proof-of-stake (PoS) system and prominent smart contract platform, handle scalability and security challenges.

An unknown Crypto Twitter user asked IOG’s Matthias Benkort (@ KtorZ_) about the intricacies of Hydra’s architecture after the discussion about the newest enhancements to the Cardano (ADA) blockchain and its infrastructure.

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Mr. Benkort was asked about Cardano’s first-ever L2 solution’s modular design, which allows numerous decentralized applications (dApps) to be deployed to its infrastructure.  This L2 solution will be ready to onboard dApps with various architectures utilizing its different aspects (“Heads”) in a Lego-like way, according to the creator.

In addition, the actual design of Hydra and the timeline for its development will be determined by community demands; several parts of the fundamental “Head” are already entirely up to the community.

Recap on Hydra

Hydra is moving closer to testnet, according to Haskell Dev Matthias Benkort, who tweeted in December 2021. This is a Layer-2 blockchain solution that aims to scale the bigger Cardano blockchain by cutting latency and increasing transaction throughput (TPS).

Now, fast forward to the present, and it appears like a final version will be available soon. With the arrival of this L2 solution, users will have access to a scalable solution that will boost throughput, remove latency, incur low to no costs, and substantially reduce storage requirements.

This will be performed through an isomorphic scaling method, which functions by conducting transactions off the main chain while retaining the main chain as a secure settlement layer.

Isomorphic state channels, or heads, provide access to Cardano features such as native assets, non-fungible tokens (NFTs), and Plutus scripting. As a result, users benefit from the layer-1 blockchain’s benefits and security while functioning within a “sharded head,” of which there will be many. Benkort further stated,

“These are state channels that are capable of expediently reusing the exact state representation of the underlying ledger and, hence, inherit the ledger’s scripting system as is.”

In theory, when more heads are added to the network, it will become faster. At the time of writing, Cardano (ADA) was priced at $0.782133 and had plunged by 3.2% over the last 24 hours.

NEAR raises $150M to spur Web3 adoption

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In an official blog post, on 13 January 2022, the U.S.-based decentralized application platform and Ethereum competitor, NEAR protocol has announced that it has raised a $150 million fortune directed by Three Arrows Capital. According to the blog post, the funds would be used at regional centers through which it will bolster people to learn about decentralized podiums.

The funds will be utilized to advocate millions of people to learn and use blockchain technology and to endorse Web3 technologies. This benefit of development on the NEAR decentralized blockchain could make it possible for users to network with new audiences.

The agreement has conclusively proved sections across Asia, Europe, Africa, and the team aim to broaden support in Latin America, India, and Turkey.

Marieke Flament, NEAR Foundation’s CEO, said,

“We are delighted to have such a fantastic list of backers supporting NEAR’s mission. We are looking forward to leveraging the funding to improve access to blockchain technology in an ever growing list of countries across the world.”

What is NEAR protocol?

NEAR protocol is a highly efficient blockchain constructed to be extremely fast. It is considered to be unbelievably safe and also eminently scalable. It was designed to run decentralized applications and works to compete with Ethereum and many other superior smart contract-facilitated blockchains such as EOS and Polkadot. Its prime token is also known as NEAR and is used to pay for commission and cache. These tokens can also be invested by token holders who take part in executing network consensus as transaction proofs.

The company is formated by an explicit group of techies and entrepreneurs to be easy to utilize, general, and environmentally friendly. The company is supported by leading venture capitalists like A16Z, Pantera Capital, Electrical Capital, Dragonfly Capital, Coinbase Ventures, Blockchain.com, and Baidu Ventures.

As decentralized applications have grown in fame, the crypto society is faced with an increasing scalability issue. Ethereum has been surfaced with scalability obstacles because of the increasing request for its purpose, and whilst a few endorse scaling issues to be resolved by building it on top of Ethereum (Layer-2-solutions), other businesses like NEAR are determined to build a completely fresh blockchain with distinct framework.

Arbitrum network was down due to a technical snag, more details

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Ethereum based layer-2 scaling solution Arbitrum faced a brief network downtime in the evening hours of 9th January 2022. After a 7 hour downtime, it released a report explaining the network outage was due to a hardware failure in its main sequencer node. The issue was resolved, along with its Sequencer and all public RPC nodes, becoming fully operational. Furthermore, the post read:

The core issue was a hardware failure in our main Sequencer node. While we generally have redundancies that would allow a backup Sequencer to seamlessly take control, these also failed to take effect this morning due to a software upgrade in the process. As a result, the Sequencer stopped processing new transactions. We’d like to stress that Arbitrum is a Layer 2 network on Ethereum, and the network is designed to sustain even permanent Sequencer failures by falling back to using Ethereum to process transactions.

In addition to that, the blog post mentions that the team behind the project is working to implement additional redundancies to increase network stability. Going forward, the company plans to minimize Sequencer downtime to achieve the ‘ultimate goal of full decentralization’.

The scaling solution was hit by similar issues before, though today’s incident appears to be more severe. Last September, the Arbitrum chain suffered another network outage but was resolved within an hour. 

Optimistic rollups like Arbitrum are prone to issues

Arbitrum One was developed by Offchain labs to leverage Optimistic Rollups, which process transactions at much higher speeds and lower costs than the base chain. Optimistic Rollups don’t handle computation by default, but they are prone to issues that it can take up to a week to send funds to mainnet as withdrawals are subject to a challenging period.

In contrast to that, Arbitrum’s total value locked [TVL] has quickly risen compared to other similar layer-2 projects.

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In fact, according to analytics website l2beat, the layer 2 solution holds over $2.5 billion in TVL. Since it launched on the mainnet in August 2021, it has attracted several of Ethereum’s top DeFi protocols such as Balancer and Uniswap, Aave, MakerDAO, Chainlink with more expected to follow in the future.