Coinbase flags priority areas for Base ecosystem development

The Base L2 ecosystem fund will prioritise support for projects deemed crucial to growing the on-chain economy. The latter include DeFi applications and decentralized stablecoins, Coinbase said.

Are you a builder passionate about making the onchain economy grow, but looking for where to start?

We just published a Request for Builders: four areas we’d love to see builders explore on Base (with funding from the Base Ecosystem Fund) ?https://t.co/XSSdPnusyc

— Base (@BuildOnBase) March 24, 2023

The Base Ecosystem Fund’s structure targets early-stage projects built on the protocol, from pre-seed to seed. In its statement, Coinbase said it had seen “huge interest” in the fund from a range of developer teams.

Coinbase outlined four areas it sees as priority for Base’s ecosystem development:

• flatcoins (flatcoins);
• decentralised reputation systems;
• DEX based on limit-order books (LOB);
• applications focused on safeguarding user funds in DeFi.

The company notes that flatcoins refer to decentralized stablecoins that track the rate of inflation. According to journalist Colin Wu, their price would be pegged to a specific index or basket of digital assets.

Flatcoins are a new type of stable coin that are designed to maintain a constant value against a basket of currencies, rather than just one currency like the US dollar. Like Reflexer/RAI, Spot/Ampleforth, Frax/FPIS, Olympus DAO

— Wu Blockchain (@WuBlockchain) March 26, 2023

Coinbase emphasised that developers of more traditional algorithmic stablecoins can also expect support from the Base Ecosystem Fund.

According to the statement, trust in centralized exchanges has fallen sharply since the FTX collapse. The company argues that with the development of L2 solutions teams gain the ability to provide the throughput necessary for a more advanced platform and to mitigate risks of third-party involvement in deals.

Developers say existing exchange mechanisms such as AMM are “critically important” for the DeFi sector. However, professional traders and institutional investors will need access to decentralised platforms based on LOB for more efficient trading.

Coinbase also highlighted the importance of products aimed at safeguarding user funds locked in various DeFi apps. Such solutions include tools to protect users from smart-contract vulnerabilities, mitigate the consequences of “attacks on the ecosystem” and offer decentralized deposit insurance.

As reported in February 2023, the cryptocurrency exchange launched the Base testnet. The solution is built on Optimism’s OP Stack architecture.