Coinbase and Andreessen Horowitz have recently made the decision to build their new networks on Optimistic Rollups (OP Stack), a layer-2 network atop Ethereum. This decision has raised questions in the blockchain tech circles, as many experts view zero-knowledge cryptography (ZK) as superior to optimistic rollups. Margaux Nijkerk dives into the question in this week’s feature.
Coinbase’s new Base project, a layer-2 network atop Ethereum, launched this month and has already seen success with one of its applications, Friend.tech. Friend.tech, which allows users to purchase shares of X (Twitter) influencers, quickly attracted more than 100,000 users and generated more than $25 million in fees. This success has driven up key metrics on the Base network, driving its total value locked (TVL) past $200 million and at one point pushing transactions per second above those of Ethereum as well as rival layer-2 projects Arbitrum and Optimism. According to FundStrat, Base has accrued nearly $4 million in fees, $2.5 million of which is retained by Coinbase.
Solana, one of the hardest hit blockchain projects in 2022, may have regained some of its footing. According to a recent report from the analysis firm Delphi Digital, Solana’s developer ecosystem has consolidated but remained resilient, and the core protocol has shipped meaningful code. This year, Solana’s total value locked (TVL) has jumped 96%, according to the report, with improving prospects for fast adoption of applications built on the network.
EigenLayer, a project focused on restaking – essentially a way of repurposing ether (ETH) staked on Ethereum’s proof-of-stake network to secure additional projects – has seen increasing demand. According to our Oliver Knight, the project immediately hit the new caps after a capacity increase on Aug. 22.
Ultimately, Coinbase and Andreessen Horowitz’s decision to choose optimistic rollups for their layer-2 networks comes down to the price of popularity and the potential for profits. As Vitalik Buterin’s recent transfer of 1,000 ether (ETH) from the DeFi lender Maker to Coinbase suggests, the potential for profits may be a major factor in the decision.