CoinBase Launching L2 | Feb 23

CoinBase just announced Base, an EVM compatible layer 2 and have confirmed they do not plan to launch a token:

This is potentially a large source of revenue for CoinBase.

For comparison, Binance Smart Chain had $20M in fees last month (in a bear market), which is ~$240M annualized.

It’s not unreasonable to think CoinBase may collect a similar amount in transaction fees.

Binance is estimated to have around 90 million users. Coinbase has 110 million users.

$COIN is the stock ticker for CoinBase, which has a market cap of $14.2B

$BNB, the token for Binance and Binance Smart Chain is valued at a market cap of $48.8B.

$MATIC, an Ethereum Layer 2, has a $13.6B fully diluted valuation.

$OP, the Ethereum Layer 2 and technology Base is being built on, has a $12.5B market cap.

A nice TLDR can be found in this tweet:

  • L2's make $100M+/year on sequencer fees even in a bear market, with <500k users.
  • Coinbase has 110M users.
  • Account abstracted chain means ability to use Coinbase KYC to add RWAs
  • Fast, scalable, cheap L2 plugged directly into the app makes it easy for retail to use defi.

The play here is to speculate on Coinbase’s stock ($COIN) price increasing in value due to the addition of Base.