- Coinbase has begun storing more USDC on Base to enable faster transactions and lower fees.
- The USDC landscape has changed as Circle has halted issuance on the Tron blockchain.
- Binance has delisted Tron-based USDC deposits and withdrawals, although USDC trading remains unaffected.
In a move aimed at streamlining customer fund management, Coinbase announced plans to increase its storage of USDC, a popular stablecoin, on Base. This Ethereum Layer 2 solution, built by Coinbase and powered by the OP Stack, promises significant advantages including lower fees, faster transaction times, and enhanced security.
Coinbase Leverages Base Layer 2
Max Branzburg, Coinbase’s Vice President and Head of Consumer Products, revealed the decision, highlighting user benefits. He encouraged other companies to adopt a similar approach and transition their business on-chain.
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"This enables us to manage and secure customer funds with lower fees and faster settlement times, with no impact to the Coinbase user experience," he stated in a recent post.
He further encouraged other companies to adopt a similar approach and transition their business on-chain. The crypto community has responded positively to the announcement. Jesse Pollak, a contributor to Base, expressed his support and excitement for Coinbase’s move.
He described the decision as “based” and pledged continued assistance for Coinbase’s on-chain endeavors. This development comes amidst a period of rapid growth for Base. According to Defi Llama, user deposits on the platform have surpassed a staggering $1 billion, doubling since the beginning of March.
This surge is largely attributed to the decentralized exchange Aerodrome, which has contributed a significant portion of the locked value since its rise in February. Additionally, Base has witnessed a notable increase in transaction counts, surpassing other optimistic rollup solutions in growth.
Circle Announces Changes to Token Creation
Meanwhile, the landscape surrounding USDC is undergoing further changes. Boston-based Circle, the firm behind USDC, has announced plans to discontinue the creation of USDC tokens on the Tron blockchain.
Citing a focus on transparency, trustworthiness, and safety, Circle stated that the decision stemmed from a company-wide evaluation. This move was followed by a similar announcement by Binance, which will no longer facilitate Tron-based USDC deposits and withdrawals.
Importantly, Binance emphasized that USDC trading remains unaffected on its platform, and deposits and withdrawals through other supported networks will continue as usual. With a current circulation of approximately $32.1 billion, USDC remains the second-largest stablecoin globally after Tether and ranks as the seventh-largest cryptocurrency overall.
While most USDC tokens reside on the Ethereum blockchain, Coinbase’s decision to leverage Base for its USDC reserves signifies a potential shift towards a more efficient and secure future for the stablecoin.
On the Flipside
- While Base promises security, Layer 2 solutions inherently introduce additional security risks compared to the base layer (Ethereum in this case).
- Coinbase storing a significant amount of USDC on Base, a network they built, raises centralization concerns.
Why This Matters
Coinbase’s move to store USDC on Base, an Ethereum Layer 2 solution, could set a precedent for wider adoption of Layer 2 technologies. This shift can potentially improve transaction speeds, reduce fees, and enhance security for USDC and other cryptocurrencies within the Ethereum ecosystem.
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