Base, Optimism unveil shared governance and revenue-sharing framework
Developers behind the Base and Optimism networks have jointly announced a revenue-sharing and governance-sharing agreement. Coinbase, the parent company of Base, has also published a list of “principles of neutrality” it will follow to prevent Base from becoming centralized. This announcement was made through three separate blog posts on Aug. 24: one from the jointly controlled Optimism Collective, one from Base and one from Coinbase.
According to the Optimism Collective’s post, Base’s smart contracts can only be upgraded via a two-of-two multisignature wallet account. One signature is controlled by Base and the other by the Optimism network’s team (called the “Optimism Foundation”). This means that Base cannot be upgraded without the consent of the Optimism team. As more chains opt to use the OP Stack and become part of the “Superchain,” governance will be handed over to a “security council” with representatives from all of the chains that comprise this ecosystem.
This month marked a momentous first for Ethereum: a publicly listed US company incubated and launched an OP Chain powered by Optimism.
But @BuildOnBase represents so much more than just technological validation of the OP Stack.https://t.co/E1Pow0LIlk
— Optimism (✨_✨) (@optimismFND) August 24, 2023
Base will also pay either 2.5% of its revenue or 15% of its profits to the Optimism Collective, whichever is greater. In return, it will receive “up to approximately 118 million OP Tokens,” allowing it to have a voice within Optimism’s protocol governance. This amount will be capped at 9% of the total votable supply in order to maintain balance, the announcement stated.
The post from Base was issued under the name of its principal creator, Jesse Pollak. He pledged that Base will become more decentralized over time, moving from what Ethereum co-founder Vitalik Buterin called “stage 0” to “stage 2” of a layer 2’s decentralization. The Base team will work to improve the scalability of the two current Optimism clients, op-geth and op-node, and create an entirely new client called “op-reth” to diversify the types of clients used.
Related: Coinbase layer-2 network Base hits 136,000 daily active users
The team will also continue to develop Pessimism, a real-time network-monitoring tool that attempts to detect cybersecurity threats early.
In addition, Pollak confirmed that Base will share revenue with the Optimism Collective and will eventually hand over upgrade keys to an Optimism security council.
Coinbase’s post was published under the name of the company’s engineering lead, Will Robinson. He focused specifically on the concept of “neutrality.”
Robinson pledged that Coinbase will remain a neutral participant in the Base network. The exchange will not “custody or control the crypto that users bring to the Base network,” nor will it change the order of transactions for its own benefit or “misuse any non-public information gleaned from Base.”
Robinson claimed that Coinbase’s marketing team and other branches of the company will use only publicly available data from block explorers and other tools in its efforts to sell Coinbase’s products, gaining no insider advantage from running Base’s sequencer. Withdrawals from Base will also be processed without censorship, respecting what Robinson calls “freedom to exit.”
Some critics of the Base network have suggested that its currently centralized nature may lead to regulatory scrutiny from the United States Securities and Exchange Commission. For example, attorney Gabriel Shapiro has stated that Base “could threaten dangerous collateral damage” to the industry.
Coinbase CEO Brian Armstrong also raised eyebrows on March 7 by suggesting that “centralized players” on Base must implement identity verification. Despite these criticisms, many Ethereum investors have expressed hope that Base and the Optimism Superchain will help to onboard new users to the Ethereum ecosystem.