In a surprising turn of events, a core member of the Base team has come forward to refute swirling rumors that its sequencer, crypto exchange giant Coinbase, has been offloading its Ether (ETH) holdings. The allegations, which sent shockwaves through the crypto community, were met with a swift and resolute response from Kabir.base.eth, who took to X (formerly Twitter) to set the record straight.
Setting the ETH Record Straight
Kabir didn’t mince words, stating emphatically that not only has Coinbase not been selling off ETH, but the exchange has actually accumulated a substantial position exceeding $300 million. This staggering sum, Kabir pointed out, represents more than double Base’s entire ETH earnings since its inception.
“Coinbase has accumulated $300M+ in ETH, which is more than 2x all of Base’s ETH earnings over time,” Kabir.base.eth declared on X.
– Kabir.base.eth, Base team member
Kabir went on to emphasize Base and Coinbase’s unwavering commitment to ETH, noting that both entities publicly disclose their long-term holdings, which currently stand at an impressive 100,000 ETH and counting. This transparent approach, Kabir argued, should put to rest any doubts about the organizations’ belief in and support for Ethereum.
Addressing Sequencer Concerns
The allegations against Coinbase and Base didn’t emerge from a vacuum. Pseudonymous observer Santisa had previously claimed that Base has been funneling all sequencer fees to Coinbase since its launch and suggested that the sequencer had likely been selling these ETH proceeds.
Kabir tackled these concerns head-on, clarifying that Base utilizes offchain custody for essential security and audit purposes, which explains the fund movements to Coinbase. However, he stressed that Base remains committed to earning and spending primarily in ETH, using the cryptocurrency for:
- Layer 1 costs
- Granting support
The Layer 2 Debate Heats Up
The controversy surrounding Base and Coinbase comes amidst a larger debate about the role and impact of layer 2 scaling solutions on the Ethereum ecosystem. Prominent figures like Andre Cronje, founder of Sonic Labs, have raised concerns about centralized sequencers in layer 2s, arguing that their profit models may not fully align with broader Ethereum values.
“L2s are why Ethereum is inflationary again. SCALE ETHEREUM. They can get the Sonic tech for free. 0 charge. Will 1000x their throughput,” Cronje asserted on X.
– Andre Cronje, Sonic Labs Founder
Cronje’s critique centers on the fact that while layer 2 solutions generate substantial revenue from transaction fees, only a small portion of these fees is sent back to the Ethereum mainnet for data availability and security. As a result, most of the ETH collected as fees is either retained by the layer 2s or potentially sold on the market, which can have an inflationary effect on ETH supply.
The Future of Layer 2s and ETH
As the debate surrounding layer 2s and their impact on Ethereum’s economic model continues to unfold, Base’s emphatic response to the Coinbase ETH selloff allegations serves as a reminder of the high stakes involved. With billions of dollars worth of ETH at play and the future of Ethereum scaling hanging in the balance, the crypto community is watching closely to see how this complex interplay between layer 1 and layer 2 ecosystems will evolve.
For now, Base appears resolute in its commitment to Ethereum and its vision of a more scalable, accessible blockchain future. As Kabir.base.eth made clear, Base and Coinbase are not just along for the ride – they’re doubling down on ETH and the promise it holds.
As the layer 2 landscape continues to mature and new solutions like Sonic Labs’ zero-fee scaling tech enter the fray, one thing is certain: the conversation around ETH, sequencers, and the economics of scaling is just getting started. And if Base’s response is any indication, it’s a conversation that will be marked by passion, conviction, and a whole lot of ETH at stake.
Disclaimer: The news article discusses recent allegations against Base and Coinbase, as well as the broader debate around layer 2 scaling solutions on Ethereum. The information is current as of the publication date and subject to change as the situation develops. Readers are encouraged to stay informed and follow updates from official sources.
