In a significant shift within the blockchain landscape, Coinbase has announced that its Base blockchain will transition from utilizing Optimism’s OP Stack to implementing its in-house code. This marks the end of a nearly three-year partnership between the U.S. crypto exchange and the layer 2 software developer. The decision is expected to have considerable implications for the Superchain, which consists of various blockchains including Sony’s Soneium, Uniswap’s Unichain, and Kraken’s Ink.
The partnership has been lucrative for both parties, with Base generating over $16 million in revenue for the Optimism Collective. OP Labs CEO Jing Wang noted that this decision could negatively impact near-term on-chain revenues. To date, Base has contributed 8,387 Ether to the Optimism Collective, amounting to roughly $16.4 million, which has accounted for 41% of the Collective’s lifetime revenue. However, in recent months, that share had risen to as high as 90%, raising concerns about the sustainability of these earnings following the split.
Wang acknowledged that while this transition means a loss of financial inputs from Base, there is recognition of the need for the company to evolve its business model amidst shifting dynamics in the competitive crypto environment. Despite the parting of ways in revenue sharing, Coinbase will continue to utilize OP Labs’ “OP Enterprise” service, aiming to preserve some level of dependency on the underlying technology.
Following this announcement, Optimism’s token, OP, saw a significant decline in value, dropping around 25% to just under $0.14, marking a stark drop from its all-time high of $4.84 earlier in 2024. This decline underscores the market’s reaction to the potential ramifications of losing a key revenue-generating partnership.
Optimism’s spokesperson expressed gratitude for the successful collaboration with Base, emphasizing their commitment to providing enterprise-grade blockchain infrastructure and confirming their ongoing support for Base as a customer of OP Labs. This ongoing support will allow Base to rely on OP Labs’ technology while building its independent infrastructure.
The Optimism Collective, responsible for managing the OP Stack, recently announced its intention to shift certain funding responsibilities to the Collective for more sustainable operations. This shift comes on the heels of an initiative to use Ether investment returns to drive further development within the ecosystem.
Amid these changes, the sentiment among observers indicates disappointment but not complete surprise. Members of the Optimism Collective noted that it was crucial for Base to prioritize its shareholders and business objectives, which ultimately led to the decision to move in-house.
Given that the OP Stack is open-source, other chains can replicate its code without requiring permission from Optimism. The Superchain aims to enhance interoperability among its member blockchains, a goal that has not yet materialized fully despite extensive technical efforts.
In light of these developments, Coinbase has indicated that the shift towards in-house code is intended to accelerate its upgrade process, simplify its programming structure, and allow for innovations that may parallel changes in Ethereum. The ultimate impact of this shift on the broader Superchain ecosystem remains to be seen, particularly as Base’s evolution could alter the balance of power within this interconnected blockchain environment.
Additionally, Optimism secured a recent win as Ether.fi announced it would migrate its crypto credit card services from the layer 2 blockchain Scroll to OP Mainnet, potentially signifying continued interest and growth in the Optimism infrastructure despite the loss of Base’s revenue contributions.
Wang concluded that as Base transitions away from the OP Stack, it may eventually find itself needing less of the support currently afforded through the OP Enterprise service. The evolving relationship between Coinbase and Optimism will be closely watched as both entities navigate the rapidly changing landscape of blockchain and cryptocurrency technologies.
