Base token not 'ruled out entirely,' Coinbase's Paul Grewal says: report

Quick Take

  • The prospect of a new token for the Coinbase-incubated Layer 2 Base has not been ruled out entirely, according to Coinbase Chief Legal Officer Paul Grewal.
  • Average daily transactions on the Base network recently surged past those on optimistic-rollup Ethereum Layer 2 alternatives Arbitrum and Optimism.

A new token for the Coinbase-incubated Ethereum Layer 2 network Base has not been ruled out entirely, according to Coinbase Chief Legal Officer Paul Grewal.

When Base launched in August, Coinbase said, "we currently do not plan to issue a new network token." However, it's "not something we've ruled out entirely," Grewal told Decrypt in an interview at Messari's Mainnet event yesterday. "I think a token could be viable at some point in the future," he added.

For now, Coinbase's focus is on putting the tools and technology out there for users to experiment with, Grewal said. "The goal has always been to expand the opportunity and to provide the tools and technology to allow others to exercise their own creativity."

Grewal also acknowledged that Coinbase would not necessarily be the one to develop the most compelling use cases and applications that draw the next 100 million — and, ultimately, one billion — people into crypto. "The economics and the tokenization of the protocol is frankly something that we just are less focused on at present for the simple reason that I think when it comes to developing Base, one of the primary drivers for us has been a recognition, maybe even a bit of humility, that we don't have all the answers at Coinbase," he said.

The push for regulatory clarity

Coinbase is also actively advocating for clearer crypto regulations, with its "Stand with Crypto" initiative aiming to mobilize the over 50 million Americans it says are involved in crypto. The goal is to push for regulations that strike the right balance between promoting innovation and keeping consumers and investors safe, Grewal said.

Grewal highlighted the global trend of countries adopting sensible crypto rules and questioned why the U.S. isn't following suit. As more Americans participate in the crypto space, it’s important for laws and regulations to reflect that, he added.


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Grewal also praised the judge's nuanced understanding of the technology in the recent Uniswap decision ruling that the decentralized protocol couldn't be held accountable for third-party misuse — a decision that could set an important precedent for how decentralized platforms, like Coinbase's Base, are viewed in terms of liability, he said.

Coinbase currently faces a lawsuit with the Securities and Exchange Commission for allegedly violating U.S. securities laws.

Base jumping into the Ethereum scaling race

The Base mainnet officially opened to the public on Aug. 9, with daily active users surpassing 100,000 — partly attributed to the hype surrounding social network and Base's "Onchain Summer" initiative.

Daily transactions on the Ethereum Layer 2 have also recently surged past those of the dominant optimistic rollup scaling solutions Arbitrum and Optimism, according to The Block's data dashboard. Base's seven-day moving average daily transaction count reached 1.5 million on Sept. 19 — equaling the previous record reached by Arbitrum in March — compared to Arbitrum's 490,000 and Optimism's 346,000.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

James Hunt is a reporter at The Block, based in the UK. As the writer behind The Daily newsletter, James also keeps you up to speed on the latest crypto news every weekday. Prior to joining The Block in 2022, James spent four years as a freelance writer in the industry, contributing to both publications and crypto project content. James’ coverage spans everything from Bitcoin and Ethereum to Layer 2 scaling solutions, avant-garde DeFi protocols, evolving DAO governance structures, trending NFTs and memecoins, regulatory landscapes, crypto company deals and the immersive metaverse. You can get in touch with James on Twitter or Telegram via @humanjets or email him at [email protected].