Coinbase’s layer-2 network to face transaction monitoring
Coinbase CEO, Brian Armstrong, has revealed that the company’s new layer-2 network, Base, is likely to incorporate transaction monitoring and anti-money laundering measures.
In an interview with Bloomberg on March 6, Armstrong acknowledged that although Base currently has some centralized components, it will become progressively decentralized over time as it grows.
He added that Coinbase has responsibilities in terms of transaction monitoring. Armstrong suggested that centralized actors would likely be responsible for avoiding money laundering and maintaining transaction monitoring programs over time.
It is unclear whether this statement applies to centralized actors operating on Base or centralized actors in general.
What is Coinbase’s layer-2 solution
Coinbase first unveiled Base on Feb. 23. Base is open to all developers but was initially announced as a home for Coinbase’s on-chain products. The platform is being developed in collaboration with Optimism, an existing layer-2 Ethereum project, and will be compatible with Ethereum, other layer-2 networks, and compatible layer-1 blockchains like Solana.
Base is currently in testnet and is accessible to developers, but it is not yet applicable to actual use cases. Coinbase has yet to announce a date for the mainnet’s launch.
Armstrong explained that Base is designed to improve scalability and usability on Ethereum and related networks, reducing transaction fees to one cent or less. However, contrary to prior speculation, Base does not have its own token.
On March 3, crypto.news reported that Base had integrated with Chainlink to provide secure, off-chain price feeds for decentralized application developers in the crypto sector.
The partnership fosters Base’s vision to scale into a top layer-2 solution in the Ethereum blockchain ecosystem by providing developers with secure off-chain data sources from Chainlink to build decentralized applications effectively.
Meanwhile, blockchain security firm PeckShield issued an alert on March 6 that a fake account posing as Coinbase’s official BASE Layer 2 account is circulating on Twitter. The account has a yellow tick, typically considered a sign of legitimacy, but users should be cautious as it is fake and may be used to steal funds.