Summary:
- Some community members of the decentralized crypto exchange backed the early mover proposal to deploy GMX on Coinbase’s L2 blockchain.
- Concerns were raised over possibly doxxing the protocol’s pseudonymous founders as Base could require KYC verification and AML checks.
- Coinbase recently launched the L2 blockchain Base using Optimism’s OP stack to leverage network scalability and tap into Ethereum’s mainnet.
Community members of decentralized exchange (DEX) GMX echoed support for a proposal to deploy the protocol on the Base blockchain, a layer 2 decentralized network recently launched by major crypto exchange Coinbase.
The Proposal
The GMX governance proposal published by a community member suggested seizing the “early mover advantage” to tap a strong capital flow, expanded liquidity, and access a broader user base by deploying on Coinbase’s Base blockchain.
Due to the expected high capital inflow to BASE, it is expected to offer a beneficial ecosystem both for a GLP-type product, as well as GMX synths… Since GMX is already an established brand name and made very good experiences with being an early adopter of an uprising ecosystem, an early mover advantage is not to be underestimated, especially, in attracting sufficient liquidity for the GLP / synth vaults.
Indeed, Coinbase’s over 110 million verified users and $145 billion in quarterly trading volume could filter into activity on GMX should the DEX deploy on Base. Currently, the derivatives exchange is the largest DeFi protocol on Ethereum L2 scaling ecosystem Arbitrum with around $580 million in total value locked.
GMX Community Concerns
The GMX community response to the proposal was split despite support for the idea. Concerns were raised that the protocol’s pseudonymous founders might have to dox themselves to comply with Coinbase’s know-your-customer (KYC) verification and anti-money laundering checks.
While unconfirmed, Coinbase CEO Brian Armstrong told Bloomberg Radio that Base could feature KYC checks and other regulatory requirements.
Coinbase’s L2 Base Blockchain
In February, Coinbase unveiled the L2 blockchain called Base as part of its master plan to onboard one billion users into crypto. Base was built using Optimism’s OP stack, a blockchain developers kit from the Ethereum-based scaling protocol. The network will tap into Ethereum’s mainnet and will not feature a native token.
