Coinbase is launching its Ethereum (ETH) layer-2 scaling solution Base, which could help reverse the company's streak of six consecutive quarters of losses.
The new platform aims to enable developers to build their own crypto applications, expanding Coinbase's revenue streams beyond its core trading business.
Base will function as a blockchain that allows investors to send money, trade on decentralized exchanges, borrow and lend cryptocurrencies, and even create non-fungible tokens.
Alesia Haas, Coinbase's chief financial officer, said in a recent interview that the exchange will earn fees from every transaction made on the network if developers build popular applications.
However, Haas acknowledges that it may take several years before Base generates substantial revenue for Coinbase.
This launch comes on the heels of Coinbase reporting six consecutive quarters of losses, which were mainly attributed to lower trading volumes and a 20% decrease in the platform's active users in the last quarter.
Traditionally, Coinbase has relied on fees from customer trades as its primary revenue source.
However, for the first time in its history, non-trading revenue surpassed trading revenue last quarter, indicating a shift in Coinbase's business model.
Base, a layer-two blockchain built on top of Ethereum, aims to improve transaction costs and speed.
It achieves this by batching and compressing a large number of transactions before publishing them to the Ethereum blockchain.
“On Ethereum, everyone’s driving in a single car, that’s really expensive because everyone has to pay for their own car,” said Jesse Pollak, who leads Coinbase’s efforts on the blockchain.
“With Base, we have public transportation, so now you could fit hundreds of
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