Coinbase Unveils Layer-2 Network

A major development in the blockchain technology sector has emerged as US-based cryptocurrency exchange Coinbase introduces “Base,” its proprietary layer-2 network built on the Ethereum blockchain. This groundbreaking initiative by a publicly traded company in the blockchain space positions Coinbase as a crucial player in the industry. Base aims to overcome the existing constraints of the Ethereum network, like high gas fees and slow transaction speeds, by providing an additional layer for quicker and more cost-effective transactions. Consequently, Coinbase’s foray into the layer-2 solutions market is expected to significantly influence the overall growth and accessibility of blockchain technology for mainstream users and businesses.

In related news, global payment provider PayPal has launched its first stablecoin, PYUSD. Utilizing the Ethereum blockchain’s ERC-20 token standard, PYUSD represents the initial stablecoin introduced by a major traditional financial institution. This development underscores the increasing adoption of digital assets and blockchain technology by conventional financial companies. The stablecoin, PYUSD, aims to offer users secure, fast, and affordable transactions, further solidifying PayPal’s presence in the quickly evolving digital currency landscape.

Paxos, a firm with a smaller market cap compared to competitors like Tether and Circle, known for their USDT and USDC tokens, respectively, issues the stablecoin. Despite having a smaller market cap, Paxos has significantly impacted the stablecoin market with its Paxos Standard Token (PAX). As the company continues to expand and evolve, it aims to provide a dependable and credible alternative for users seeking stability and security associated with digital currencies backed by the US dollar.

Walter Hessert, Paxos Trust’s Head of Strategy, underscored the potential advantages for investors of PayPal’s new stablecoin, considering the company’s regulated status. He noted that this would foster greater trust and security among users, as PayPal’s adherence to regulatory requirements could reduce risks commonly associated with digital assets. Moreover, the introduction of this stablecoin could potentially increase mass adoption of cryptocurrencies by bridging the gap between traditional finance and digital currency ecosystems.

Blockchain enthusiasts have begun analyzing the Ethereum smart-contract code associated with the stablecoin, with some theorizing that PayPal’s entry could incite increased competition within the sector. As PayPal joins the market, it brings its extensive user base and global recognition, potentially challenging existing stablecoin market leaders. This development could stimulate further innovation and more competitive offerings, ultimately leading to broader adoption and enhanced utility of stablecoins in the digital economy.

In other news, cryptocurrency exchange Huobi, which includes Tron’s Justin Sun among its advisors, saw a dramatic 33% decrease in total assets within the past week. This sudden decline has raised concerns among investors and traders, who are struggling to understand the factors behind this significant drop in value. Huobi has not issued an official statement addressing the situation, leaving the community to speculate on possible reasons for the asset decline.

This sharp decline coincides with increasing regulatory scrutiny in China, leading to heightened caution among cryptocurrency market participants. As a result, many investors and traders have adopted a wait-and-see approach, contributing to the severe slump in trading volumes. Additionally, this situation underlines the considerable impact that regulatory changes, particularly from a powerful economy like China, can have on the global cryptocurrency market.

First Reported on: coindesk.com

FAQ

What is Coinbase’s Base?

Base is a proprietary layer-2 network built on the Ethereum blockchain by Coinbase, a US-based cryptocurrency exchange. This project aims to address existing Ethereum network limitations, such as high gas fees and slow transactions, by offering a quicker and more cost-effective transaction layer.

What is PayPal’s PYUSD?

PYUSD is PayPal’s first stablecoin, introduced to provide secure, fast, and affordable transactions for its users. It uses the Ethereum blockchain’s ERC-20 token standard and marks the increasing adoption of digital assets by conventional financial institutions.

Who issues PYUSD?

Paxos, a company known for its Paxos Standard Token (PAX), issues PYUSD. Paxos aims to provide dependable and trustworthy alternatives for users seeking stability and security in US dollar-backed digital currencies.

What benefits does PayPal’s stablecoin bring?

PayPal’s regulated status could foster greater trust and security among users for its newly introduced stablecoin. The company’s adherence to regulatory requirements may reduce risks generally associated with digital assets. Moreover, the introduction of this stablecoin could encourage mass adoption of cryptocurrencies, bridging the gap between traditional finance and digital currency ecosystems.

What might be the impact of PayPal’s entry into the stablecoin market?

PayPal brings its extensive user base and global recognition to the market, potentially challenging existing stablecoin leaders. This development could stimulate further innovation, more competitive offerings, and broader adoption and enhanced utility of stablecoins in the digital economy.

Why did Huobi experience a 33% decrease in total assets?

While Huobi has not issued an official statement, this sharp decline coincides with increasing regulatory scrutiny in China. Many investors and traders have adopted a wait-and-see approach, contributing to a severe slump in trading volumes. The situation highlights the significant impact of regulatory changes – particularly from powerful economies like China – on the global cryptocurrency market.

Featured Image Credit: Art Rachen; Unsplash; Thank you!