Base's Sequencer Fees Spark Transparency Concerns

Coin WorldTuesday, Feb 11, 2025 10:52 am ET
1min read

Concerns have been raised over the handling of sequencer fees by Base, Coinbase's Ethereum Layer 2 network. Critics have argued that the transfer of these fees to Coinbase lacks transparency and may not align with the decentralized principles of the Ethereum project.

Santisa, the chief investment officer at Lucidity, pointed out that Base has been consistently transferring ETH from its sequencer wallet to Coinbase. According to Etherscan data, the most recent transfer involved 240 ETH. Santisa also noted that Coinbase has received most of the sequencer fees paid by Base since its inception.

One of the notable blockchain developers, Andre Cronje, criticized the approach taken by Base. He questioned where the fees collected for processing transactions on the network were being invested, given that only a small portion was going towards paying for the security and data availability of Ethereum. Cronje highlighted that while Base had already produced $120 million in fees, only $10 million was being used to benefit Ethereum directly.

In response to these concerns, Base dismissed rumors that the network was liquidating ETH. Surojit Sadarangani, a Base representative, stated that the aim was to spend as much of its funds as possible in ETH. He also clarified that the network makes all its layer one Ethereum transactions and pays Ethereum Layer 1 fees exclusively in ETH, and denominates outside grants in ETH. Sadarangani emphasized that Base seeks to increase operations on-chain.

Speculation over ETH sales also stirred concerns among users. Some pointed out that although Coinbase had collected more than $100 million in fees, the company's financial statement only showed a 772 ETH increase in their possession. Sadarangani stated that there were no significant sell-offs in ETH. He highlighted that Coinbase and Base together hold more than 100,000 ETH, making them the largest public company owners of the asset and demonstrating their commitment to supporting the Ethereum ecosystem.

The controversy surrounding Base's handling of sequencer fees highlights the tension between centralizing forces and the decentralized ideal of Ethereum. As a critical player in Ethereum's Layer 2, Base's actions have raised demands for greater transparency with the ideals of Ethereum.

Comments



Add a public comment...
No comments

No comments yet

Disclaimer: The news articles available on this platform are generated in whole or in part by artificial intelligence and may not have been reviewed or fact checked by human editors. While we make reasonable efforts to ensure the quality and accuracy of the content, we make no representations or warranties, express or implied, as to the truthfulness, reliability, completeness, or timeliness of any information provided. It is your sole responsibility to independently verify any facts, statements, or claims prior to acting upon them. Ainvest Fintech Inc expressly disclaims all liability for any loss, damage, or harm arising from the use of or reliance on AI-generated content, including but not limited to direct, indirect, incidental, or consequential damages.