According to OP Labs, the optimism builder of Ethereum Overlay Protocol, it's only a matter of time before all cryptocurrency exchanges and Fintech companies run their own blockchain.
This logic is simple and simple, says Sam McIngvale, product director at Op Labs, points to the success of Coinbase's Layer 2 (L2) network-based runaway since its debut in 2023.
Initially, Base has acquired an incredible ecosystem of users and developers to support the exchange, McIngvale said. But the biggest simplest thing to do is combine with Coinbase's Bitcoin-assisted loans to allow a system like the base to be monetized by being detained while in custody.
Base was built using Optimism's OP Stack, a software product that helps users develop layer 2 blockchains that run on Ethereum but offer faster, cheaper transactions. McIngvale is the largest layer 2 with Base success, many metrics including locked totals, showing how the industry could develop.
“We look forward to all crypto exchanges and all fintech companies running their own blockchain over the next five years,” McKingbale said in an interview. “If you own Bitcoin at Coinbase with one button, they can take that Bitcoin, move it to base and then borrow USDC.
Both optimism and rival arbitrum assume that the transaction is valid with a potential fraud detected through a disability proof that is not permitted. Optimistic rollups derive security by increasing the throughput of the Ethereum base layer by processing transactions off-chaining to reduce computational load, and exposing the results of the underlying transaction. Another approach is to create a rollup that exposes an encrypted proof of the validity of off-chain transactions using zero-knowledge proofs.
McIngvale, who was committed to building custody operations at Coinbase, furthermore pointed out that keeping Crypto in cold storage on the platform is relatively expensive.
“Traditionally, there was a cost to detain a lot of cryptography due to all security implications,” says McIngvale. “Unlike the custody of stocks you don't really pay for it, those stocks are loaned out and things happen to them under the hood.
Clearly there is a bit of a basic vy hope happening in the land of code. Global Exchange Kraken has introduced Ink, a layer 2 blockchain that also uses optimism, as well as Bybit, Bitget and OKX. Fintech companies like Robinhood, for example, are also investigating their own L2s linked to Ethereum.
The optimistic module vision of interoperable “superchain” can ideally make it possible for users to be able to move from one blockchain to another, just as they would move from one website to another, McIngvale said.
“The early adopters of Crypto were happy to put up with things like Crappy UX,” McIngvale said. “People were waiting 12 seconds to check something and pay $50 because it was this new technology that's probably similar to being online in the mid-'90s.
