Ethereum Layer 2 scaling solution by Coinbase is under critique for transferring sequencer fees entirely to Coinbase.
Criticism over Fees
Santisa, the pseudonymous Chief Investment Officer of Lucidity, pointed out that Base continuously transfers all sequencer fees to the Coinbase exchange. Etherscan data confirmed multiple transactions from the 'Base sequencer' wallet to Coinbase, including a recent transfer of 240 ETH.
Technical Features of Base
Base is built on the OP Stack and is designed to help developers deploy applications with low transaction fees. Sequencer fees are collected for bundling transactions before they are posted to Ethereum’s mainnet. Typically, these fees contribute to network maintenance and development.
Response from Base Team
Kabir Sadarangani from Base's strategy team explained that the fees were sent to Coinbase for 'security and auditing purposes.' He added that Coinbase holds over $300 million in ETH, which is more than double Base’s earnings. Base continues to reinvest its earnings into growing Ethereum, covering Layer 1 costs, funding grants in ETH, and transitioning operations on-chain.
The Base case highlights issues of transparency in fund management and corporate profit motives. However, Base’s response stresses security and auditing importance, sparking discussions on the ethical aspects of such decisions.
