From "Never issue coin" to "Exploring": How will Coinbase's Base Token ignite a new battle in L2?

Written by: Oliver, Mars Finance

On September 15, a piece of news quickly spread through the crypto community, not from a grand press conference, but from a seemingly casual reply by Jesse Pollack, head of the Coinbase protocol, on the social platform X. When asked about the future of the Base network, he publicly acknowledged for the first time that the team is 'starting to explore' the issuance of a native network token. This statement, made in the digital world, carries enough weight to make the entire crypto world feel a slight tremor in the earth's crust. It marks a fundamental shift...

The signal gun has sounded: a prelude to the carnival of ecological tokens

Before the words were out, the capital market had already given the most honest answer. Within 24 hours of the announcement, market enthusiasm was instantly ignited and directly transmitted to the project tokens within the Base ecosystem. According to market data from September 16, a celebration driven by expectations had already begun:

NOICE briefly broke through $0.5, with a 24-hour increase of 42.73%;

OPENX has seen a 24-hour increase of as much as 85.5%, priced at 1.44 USD;

ZORA and AVNT recorded significant increases of 18.6% and 34%, respectively.

Behind this surge in numbers is a logic familiar to players in the cryptocurrency market - the "ecological Beta" strategy. Investors are betting not only on the tokens that Base may issue in the future but also on the potential value reassessment of the entire ecosystem brought about by this action. An L2 network endorsed by Coinbase, which may attract a massive number of users through the "largest airdrop in history", has instantaneously raised the value ceiling of its ecological projects.

This collective rise is not only a pre-pricing of the future but also a "rehearsal" for competing for potential short selling qualifications. Traders are flocking to these ecological projects not only because they are optimistic about their own development but also to increase their interaction depth with the Base network, thereby securing a favorable position in future snapshots. It can be said that what Jesse Pollack pulled is merely the starting gun for exploration, but the competitors in the entire track have already begun to sprint.

Is this a well-considered strategic shift by Coinbase, or a reluctant move under competitive pressure? To unravel this mystery, we must return to the starting point, exploring the deeper logic behind this change and how it will reshape the cryptocurrency landscape as we know it.

The only way out: decentralized "yangmou"

Back to February 2023, when Coinbase prominently launched its Layer 2 network Base, the official announcement contained a definitive statement: "We have no plans to issue a new network token." At the time, this was interpreted as a wise move by Coinbase, a compliant giant listed in the U.S., to evade regulatory risks. However, a year and a half later, when the total value locked (TVL) in the Base ecosystem surpassed $5 billion, becoming a key force in the L2 space, the previous commitment has become vague.

So, what exactly made Coinbase change its mind? The answer does not stem from the pressure of market speculation, but rather from a more fundamental technical and philosophical proposition: the decentralization of the Sequencer.

We can colloquially understand the sorter as the "air traffic controller" of Layer 2 networks. It is responsible for receiving user transaction requests, sorting and packaging them, and then submitting them uniformly to the Ethereum mainnet. Currently, Base's "air traffic controller" is solely handled by Coinbase. This centralized model is highly efficient in the early stages of the network, but it also buries huge hidden dangers: single point of failure risks, potential transaction censorship capabilities, and the inescapable MEV (maximum extractable value) problem. Coinbase CEO Brian Armstrong has admitted that this is just a transitional phase.

To transform the "air traffic controller" from a centralized institution into a permissionless committee participated by multiple parties, tokens have become an indispensable adhesive. A well-designed network token can serve as a staking asset, allowing anyone the opportunity to become a sorter node, and ensuring their honest behavior through economic incentives (reward and penalty mechanisms). At the same time, tokens can also act as governance tools, enabling the community to collectively decide on the network's future upgrades and development direction.

As Jesse Pollack stated in subsequent explanations, the purpose of this move is to "accelerate decentralization." This is not just a pretty slogan, but the only way for the Base network to gain long-term legitimacy and security. It can be said that issuing tokens is not the goal, but the most effective means of realizing its decentralization blueprint.

Crossing the Thunder Pool: The SEC's "Howey Test" Tightening Spell

However, for Coinbase, a publicly traded company that is constantly under the spotlight of the U.S. Securities and Exchange Commission (SEC), issuing tokens is akin to testing the waters at the edge of regulatory danger. The biggest challenge is undoubtedly the famous "Howey Test," which is the core standard used by the SEC to determine whether an asset constitutes an "investment contract," i.e., a security.

According to the "Digital Asset 'Investment Contract' Analysis Framework" released by the SEC in 2019, an asset is very likely to be classified as a security if it meets the key characteristics of "investing money, in a common enterprise, and expecting profits from the efforts of others."

This means that Coinbase's legal team must design a token model that cleverly circumvents this definition. The core idea is to maximize the token's "utility" rather than its "investment attributes." The primary functions of the token must be practical uses such as participating in network governance and staking to become a validator node, rather than allowing holders to passively expect appreciation due to Coinbase's operations.

In addition, the SEC has repeatedly hinted in its past guidelines and enforcement actions that a network that is "sufficiently decentralized" is a key consideration for its regulatory oversight. If the operation and development of a network are no longer dependent on a centralized initiating entity, the likelihood of its native token being considered a security is greatly reduced. This aligns perfectly with Base's technical requirements. Therefore, Coinbase's push for the decentralization of the sequencer is not only a technical upgrade but also a "de-risking" operation aimed at meeting regulatory requirements. This silent game with the SEC is just as challenging and important as the technical challenges themselves.

The Giant's Script: What Have We Learned from Competitors?

On the journey of exploring coin issuance, Base is not alone; its main competitors Arbitrum and Optimism have already submitted textbook-level answers. By analyzing their strategies, we may glimpse Base's future trajectory.

The Arbitrum airdrop can be regarded as a precise incentive for active on-chain users. It has designed a complex points system where user behaviors, such as cross-chain asset transfers, trading frequency, and interactions with smart contracts, are quantified as points, ultimately determining the number of airdrop tokens. This approach greatly incentivizes genuine users and effectively filters out speculative "wool pullers."

Optimism focuses more on the long-term construction of the ecosystem. In the distribution of its token OP, in addition to user airdrops, a large portion is reserved for ecosystem funds and retrospective public goods fundraising, continuously providing financial support to developers and public facility builders within the ecosystem.

Comparison of Mainstream Layer 2 Token Economics and Airdrop Strategies

Currently, the Base chain ecosystem has taken shape, with its TVL exceeding 5 billion USD according to DefiLlama data. Leading protocols such as the lending protocol Morpho, Aave, and decentralized exchanges Aerodrome Finance and Uniswap have locked in significant amounts of funds and users. It is foreseeable that once Base decides to launch an airdrop, these deeply involved participants in the protocols are likely to become the biggest beneficiaries. More importantly, Coinbase holds over 100 million verified users, providing Base with a potential user pool unmatched by any other L2 network. A "historic airdrop of unprecedented scale" combining on-chain behavior with Coinbase account history is not a fantasy.

Chain Reaction: How a Token Stirred the Entire Community?

The issuance of Base tokens is not just a major event for its own ecosystem; its ripple effect will spread throughout the entire cryptocurrency industry.

First of all, this will profoundly affect its relationship with Optimism. Base is built on the OP Stack technology stack of Optimism and is a core member of its "Superchain" vision. Both parties have signed a revenue-sharing agreement, requiring Base to remit a portion of its sequencer income to the Optimism Collective. In Optimism's governance forum, community members have long been discussing how to better integrate Base into the governance system. The emergence of a BASE token is bound to raise new questions: how will it coexist with the OP token in the global governance of the Superchain? Will it form a structure similar to a "federal system" or will there be friction due to conflicting interests? This tests the collaborative wisdom of both giant teams.

Secondly, this will completely intensify the competitive landscape of Layer 2. According to a report by the cryptocurrency analysis media Cryptodnes, Base has been viewed as one of the "dominant forces" in the L2 space by 2025. If Base can convert tens of millions of active users from its parent company into on-chain users through airdrops, its network effects and liquidity will experience explosive growth, posing significant competitive pressure on other L2 networks such as Arbitrum and Starknet. A "L2 World War" for users, developers, and liquidity may fully escalate.

Ultimately, this represents an evolution of Coinbase's business model. Issuing and empowering a successful network token means that Coinbase's business will extend from a centralized trading platform to the core infrastructure layer of a decentralized ecosystem. This not only creates new revenue streams (such as participating in staking and governance by holding tokens) but also builds a strong moat that deeply binds its users within its own ecological closed loop, which will have a profound impact on its valuation in the capital markets (COIN).

Conclusion

From "never" to "exploration", Coinbase's shift in stance on the Base token is a strategic evolution intertwined with multiple forces such as technological inevitability, regulatory pressure, and market competition. Although the official wording remains cautious, once the valve for exploration is opened, it is difficult to close it again.

In the future, what we will see is no longer a simple token issuance event, but a grand narrative concerning technological routes, regulatory games, and the commercial landscape. How will Base design its token economics to navigate the SEC's minefield? How will it activate Coinbase's hundreds of millions of users through an unprecedented airdrop? How will this small token play a crucial role in determining the outcome in the fierce battles of L2?

The answers to all these questions remain shrouded in mystery. But it is certain that the eyes of the crypto world are once again focused on Coinbase, waiting for it to drop this game-changing piece.