Coinbase has unveiled its strategy to bolster its reserves of corporate and customer-held USDC on Base, an Ethereum Layer 2 solution incubated by the exchange and constructed on the open-source OP Stack. This initiative is poised to deliver advantages such as reduced fees, expedited settlement durations, and heightened security protocols for the management of client assets.
Max Branzburg, the Vice President and Head of Consumer Products at Coinbase, announced this decision in a Wednesday post on X platform. Branzburg emphasized the potential of this move to streamline the management and safeguarding of client funds, promising enhanced efficiency without compromising the Coinbase user experience. He further urged fellow enterprises to emulate Coinbase’s footsteps by transitioning their operations onchain.
The response to this announcement has been overwhelmingly positive, with Jesse Pollak, a contributor to Base, voicing support and enthusiasm for Coinbase’s strategic shift. Pollak lauded the decision as “based” and pledged ongoing support for Coinbase in their blockchain-based initiatives.
Meanwhile, Base, the Ethereum Layer 2 solution, has witnessed a remarkable surge in Total Value Locked (TVL). According to Defi Llama data, user deposits on Base have surpassed $1 billion, marking a significant uptick since the beginning of the month when it stood at $470 million. The surge in TVL can be largely attributed to the decentralized exchange Aerodrome, which has contributed the lion’s share of locked value since experiencing substantial growth starting in early February.
Transaction volumes on Base have also experienced a notable uptick, outpacing other optimistic rollups in terms of growth. While Arbitrum has also witnessed a surge in transaction volumes, OP Mainnet has seen a more moderate increase in its daily transaction count.
Coinbase’s decision to ramp up USDC reserves on Base coincides with Boston-based crypto firm Circle’s announcement to discontinue the creation of USDC tokens on the Tron blockchain. Circle cited the need to ensure transparency, trustworthiness, and safety of USDC as the rationale behind their decision. Binance has similarly announced the cessation of facilitating deposits and withdrawals of USDC via the Tron blockchain network, although trading of USDC on their platform remains unaffected.
With approximately $32.1 billion in circulation, USDC currently ranks as the eighth-largest cryptocurrency and the second-largest stablecoin after Tether. Most USDC tokens in circulation are Ethereum-based, according to Circle’s website.