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Coinbase to Increase USDC Balances on Base
Coinbase has revealed its plans to boost the storage of corporate and customer USDC balances on Base, an Ethereum Layer 2 solution incubated by the exchange and built on the open-source OP Stack. This strategic move is anticipated to bring various advantages such as lower fees, faster settlement times, and improved security for managing customer funds.
Benefits of the Decision
- Lower fees
- Faster settlement times
- Enhanced security for managing customer funds
Max Branzburg, Coinbase’s Vice President and Head of Consumer Products, emphasized the significance of this decision in a recent post. He highlighted that this shift will allow for managing and securing customer funds with reduced fees and quicker settlement times, all without affecting the Coinbase user experience. Branzburg also encouraged other companies to consider following Coinbase’s lead in transitioning their operations onchain.
Community Support for the Move
The announcement has garnered positive feedback from the community, with Jesse Pollak, a contributor to Base, expressing support and enthusiasm for Coinbase’s transition. Pollak described the move as “based” and pledged ongoing support for Coinbase in their onchain initiatives.
Base’s Growth and Achievements
Base, the Ethereum Layer 2 solution, has witnessed a remarkable surge in total value locked (TVL). Recent data from Defi Llama indicates that user deposits on Base have exceeded $1 billion, marking a significant increase compared to previous months. The surge in TVL can be attributed to decentralized exchange Aerodrome, which has been a key contributor to the platform’s growth since early February.
Transaction counts on Base have also seen a notable rise, surpassing other optimistic rollups in terms of growth. While Arbitrum has experienced an increase in transaction counts, OP Mainnet has observed a more modest uptick in its daily transaction count.
Changes in USDC Ecosystem
Coinbase’s decision to bolster USDC reserves on Base coincides with Circle’s announcement to cease the creation of USDC tokens on the Tron blockchain. Circle cited the importance of transparency, trustworthiness, and safety of USDC as the rationale behind this decision. Similarly, Binance has disclosed that it will no longer support deposits and withdrawals of USDC via the Tron blockchain network, although trading of USDC on their platform will continue unaffected.
With a circulating supply of approximately $32.1 billion, USDC currently ranks as the eighth-largest cryptocurrency and the second-largest stablecoin after Tether. The majority of USDC tokens in circulation are based on the Ethereum blockchain, as per information available on Circle’s website.