Coinbase to Store More Customer, Corporate Balances on Base

“We’re excited to continue to move our business onchain and we hope other companies will follow our lead,” said Coinbase’s head of consumer product Max Branzburg.

Coinbase plans to move more of its corporate balances and customer USDC balances on to its Ethereum layer 2 network Base. 

Max Branzburg, the head of consumer products and vice president at Coinbase, shared the company’s plans in a post on X, saying that it would help the firm secure customer funds with lower fees and faster settlement times.

1/ Going forward, Coinbase is going to be storing more corporate and customer USDC balances on Base. This enables us to manage and secure customer funds with lower fees and faster settlement times, with no impact to the Coinbase user experience.

We are excited to continue to…

— Max Branzburg 🛡 (@maxbranzburg) March 26, 2024

 According to data from Arkham Intelligence, Coinbase currently holds $256 million USDC, and $56 million of that on Base. The rest of Coinbase’s USDC balance sits on other chains, with the majority $170 million held on Ethereum.

Just a little over seven months after Base went live, it has amassed over $1 billion in Total Value Locked (TVL) – half of which came in the last month alone.

The network saw a rapid surge in transaction activity after Ethereum’s Dencun upgrade went live on March 13, bringing down the cost of average layer 2 transactions significantly. Base, which is built on Optimism’s tech stack, was one of the biggest beneficiaries and saw transaction fees reduced from $0.31 to $0.0005 on day one of Dencun.

While the move to store user and corporate balances of USDC on a layer 2 network seems somewhat out of the ordinary for a publicly listed crypto firm, it seems to fit right into the picture Coinbase CEO Brian Armstrong painted more than seven years ago. 

In a 2016 blog post titled “The Coinbase Secret Master Plan,” Armstrong shared the phases through which he believed that the world of digital currencies would evolve, with the fourth phase being decentralized apps that would reach one billion people.

“The existing financial system needs to be recreated on open networks and made globally accessible in this new consumer interface,” said Armstrong at the time. 

“Coinbase will participate in this area by buying, building, or investing in various companies. We will also build developer tools and work with regulators to craft appropriate regulation in this space.”