Base Team Member Denies Coinbase is Selling ETH From Sequencer Revenue
A key figure from Base has denied claims that Coinbase, acting as the sole sequencer for the network, is offloading ether (ETH) acquired from transaction fees.
Kabir.base.eth, a team member working on Base, took to X to address the rumors that had circulated over the weekend. The claims suggested that Coinbase had been liquidating ETH earned from the sequencer’s operations. Kabir dismissed these allegations, clarifying that Coinbase is not selling the ETH but rather holding it within the platform’s reserves.
“Coinbase currently holds over 100,000 ETH, valued at around $300 million,” Kabir said in his post, “which is more than twice the total ETH Base has generated since launch.”
He further explained that Coinbase holds these assets for operational purposes and that ETH is used as a fee mechanism to sustain the network’s activities, rather than being sold. The assets are kept securely within the ecosystem, rather than being liquidated for profit.
This comes in response to claims by Santisa, a user who suggested Coinbase was actively selling ETH accumulated from transaction fees on Base. These concerns have drawn attention to the role of centralized entities like Coinbase in Layer 2 networks, which some critics feel may undermine the decentralized principles of Ethereum.
Kabir’s comments also outlined that ETH transferred to Coinbase is used for operational expenses and for ensuring the stability of Layer 1’s Ethereum network. He emphasized that Base’s model is designed to ensure the health of the broader Ethereum ecosystem while managing transaction costs and rewards.
Adding to the conversation, Andre Cronje, the founder of Sonic Labs, took to X to express concerns over the broader trend of Layer 2 networks contributing to Ethereum’s inflation by either holding or liquidating ETH.
“There is a growing issue with Layer 2s holding or selling ETH, which only adds to Ethereum’s inflationary pressure,” Cronje said. “They need to play a role in supporting the deflationary model of Ethereum, rather than contributing to inflation.”
The discourse around Coinbase’s role as a sequencer highlights ongoing debates about the balance between centralization and decentralization in the growing Layer 2 ecosystem.
