Coinbase’s Base Chain Hits Phase 1 Decentralization—Wall Street Still Won’t Get It
Base, Coinbase’s Ethereum L2 brainchild, just shed its training wheels. The chain officially graduated to Phase 1 decentralization—meaning validators can now challenge sequencer outputs. Cue the ’but is it *really* decentralized?’ think pieces.
Why it matters: This isn’t just tech theater. Phase 1 status means Base inches closer to joining the big leagues—chains that can’t be unilaterally yanked by a single entity. (Looking at you, 2008 banking system.)
The kicker? The upgrade happened without breaking a single DeFi app. Try that with a legacy stock exchange’s ‘maintenance window.’
Bonus cynicism: Decentralization milestones won’t stop TradFi from calling crypto a ‘risk asset’ while hoarding ETFs. Priorities.
Base was under review until recently, but managed to join other Phase 1 chains with the Optimistic Rollup technology. | Source: L2Beat
The status of L2 depends on preset criteria for achieving consensus. Most of the newly created L2 chains use some form of centralized transaction sequencing. Base has fulfilled most of the criteria for decentralized consensus on network status, transactions, and sequencer failure.
A total of 154 L2 chains have already launched, with most starting operations with centralized consensus. Only a handful of L2 networks emerged as winners in terms of value locked and users. Base is among the sector’s leaders, due to its apps, value locked, and inflow of stablecoins.
Anyone can secure Base chain
The latest network upgrade for Base means anyone can propose a chain state, or issue transactions claiming to be legitimate.
To secure the network, decentralized users can run the free Challenger software package. If a user sends out a claim without proof, challengers can prove the transaction is invalid. As an incentive, challengers will receive the claim bond. Even one challenger can protect the chain from malicious transactions.
Base is planning another milestone, where network upgrades will also be approved by a decentralized council. Currently, upgrades are decided by the chain’s dedicated team
Base remains a key L2 chain for decentralized activity
Even without the technical upgrades, Base remained one of the key networks, promoted by Coinbase as the network for cheap on-chain fun. However, Base turned out to be one of the valuable chains for DeFi and perpetual DEX trading.
The upgrade arrived just a day after Ethereum announced its leadership restructuring plans. There are still discussions about the role of L2 networks, and still pressing question of scaling the L1 chain as well.
Base carries over 642K daily active users, achieving a high baseline for activity in 2025. The chain receives inflows from Ethereum, with up to $500K in daily netflows. Bridge inflows often reach $4.2B on a weekly basis, rising again in April.
Base secures over $2.96M in total value locked, with up to $3.8B from additional stablecoin liquidity. The chain is also growing its list of tokens, aiming to rival Solana with meme launches and DEX activity.
On Base, DEX activity is also on leading source of user inflows. Various Uniswap versions are the leading apps, along with smaller DEX and platforms like the Zora launchpad for social media tokens.
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