Inside Coinbase's L2 Revenue Machine

Why L2s Matter

It's not about gas fees. Ethereum gas fees are near multi-year lows [6].

It's about the institutional rails Coinbase is building to connect TradFi to Ethereum.

Coinbase is turning Base into an institutional onramp to Ethereum—and a high-margin revenue stream—by owning the sequencer and vertically integrating the full user journey.

BlackRock needs an intermediary they can trust—someone with regulatory clarity and institutional credibility who can connect them to the Ethereum blockchain while maintaining compliance and control.

Coinbase provides that bridge. Through Base L2, they can subsidize development and build an early ecosystem that could accrue hundreds of billions in total value locked as tokenization scales over the next few years.

The value proposition is real: Base L2 fee revenue is at all-time highs, and institutions are already deploying. BlackRock's BUIDL fund peaked at $2.9 billion in tokenized Treasuries [9] and sits on-chain today.

This is about creating network effects and capturing revenue fees. Coinbase—as a public, US-based institution with regulatory relationships and institutional backing—can execute this strategy in a way no other crypto-native company can.

Binance did this years ago. They launched BNB Chain—an integrated exchange, centralized sequencer, native stablecoin, massive user base. The exchange captured the onramp, the trading, the chain economics. It worked. BNB Chain still processes significant volume—setting a record of 31 million daily transactions in 2025 [7].

Coinbase is running the same playbook for the US and Western markets.

The difference: Coinbase is doing it on Ethereum infrastructure, with regulatory clarity, and institutional partnerships already signed. Base is an optimistic rollup on Ethereum's OP Stack. Transactions settle to Ethereum for security. But Coinbase runs the sequencer—and collects the fees.

What Is Base

To understand why this works economically, you need to see where Base's fees flow and who controls the sequencer.

Base is an optimistic rollup built on the OP Stack, which Optimism open-sourced. The OP Stack now powers ... of Ethereum L2 fee revenue [10]—Base, Optimism, Blast, and Zora combined dominate the market. The rest is split between Arbitrum (its own Nitro stack) and ZK rollups like zkSync, Scroll, and Linea.

The Base ecosystem has three parts:

Base Chain — the L2 network itself. Transactions are batched and posted back to Ethereum for security. Coinbase runs the sequencer. Every transaction on Base pays a fee to the sequencer—Coinbase captures the revenue net of L1 settlement and data posting costs. The business model works without a token. The sequencer is the revenue engine.

Base Build — the developer platform. Coinbase Developer Platform (CDP) provides wallets, payments, and APIs. OnchainKit, MiniKit, and AgentKit are the SDKs to ship onchain apps quickly.

Base Apps (formerly Coinbase Wallet) — the consumer layer. A super app for trading, payments, messaging, and mini apps.

Usage and Fees

Fee Revenue (30-day):

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Base generates roughly 3x the fee revenue of Arbitrum [10]. This isn't TVL or token speculation—it's transaction fees. Users paying to use the network. Every transaction on Base pays a fee to Coinbase's sequencer.

Total Value Locked:

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Base leads L2s in TVL—capital sitting on the chain, deployed in DeFi protocols, held in wallets. But TVL alone doesn't tell the full story. What matters for Coinbase is transaction activity.

If fees are the revenue stream, the next question is how Coinbase keeps users—and transactions—inside the Base loop.

The Ecosystem

The strategy is vertical integration. Coinbase controls:

The onramp (fiat to crypto)
The wallet (Base Apps)
The network (Base)
The payments rail (USDC)
The social layer (Farcaster integration)

Users can enter through Coinbase, use Base Apps, transact on Base, and never leave the ecosystem. Coinbase captures value at every layer.

Telegram launched an integrated crypto wallet in 2025 [8]. More consumer apps will integrate crypto rails. The super app model is coming to the West—and Coinbase is positioning Base as the infrastructure layer.

Institutional Capital

JPMorgan partnered with Coinbase. They launched JPMD—a USD-denominated deposit token—on Base mainnet in November 2025 [1]. First major bank to issue a dollar token on a public blockchain. Kinexys, JPMorgan's blockchain division, has processed $1.5 trillion in blockchain transactions since inception [2].

BlackRock's BUIDL fund is live across multiple chains including Ethereum. Circle provides instant USDC redemption [3]. Binance and Deribit accept BUIDL as derivatives collateral [4][5].

Coinbase is building the infrastructure layer between TradFi and crypto. Base is how they're capturing transaction revenue while institutions adopt blockchain rails.

The Token Question

Base has no token. The economics work through sequencer fees. Whether Coinbase launches a token later is speculation—but the current model generates real revenue without one.