Calling Developers: Coinbase Plans Inflation-Adjusted Flatcoin

taketonews

• Coinbase names the first projects for its Layer 2 solution Base
• Focus on flatcoins
• Call to Developers

Crypto exchange Coinbase recently developed its own Layer 2 solution. The Base platform aims not only to make crypto transactions cheaper and more secure, but also to pave the way for the development of decentralized applications. The goal is the further spread of cryptocurrencies. Coinbase has dispensed with its own token for its in-house blockchain, transactions instead run via Ethereum.

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“Base is an Ethereum L2 that offers anyone, anywhere a secure, affordable, and developer-friendly way to build decentralized apps,” the crypto exchange announced the launch of the Layer 2 blockchain on Twitter in late February:

Call to Developers

Just a few weeks later, Coinbase announces the first major project plans. The crypto exchange also addresses developers directly on Twitter and announces that it intends to financially support four segments with its own Base Ecosystem Fund. Coinbase names the development of flat coins as the first project.

Flatcoins are stablecoins that are not linked to currencies such as the US dollar, but are based on the inflation rate. According to Coinbase, users have stable purchasing power with the help of flatcoins, while at the same time they are “protected from the economic uncertainty” that is “caused by the existing financial system,” writes the crypto exchange. In view of the recent challenges in our global banking system, this is considered more important than ever.

In order to circumvent inflation-related fluctuations that classic stablecoins have to struggle with, a solution must be found to keep the underlying intrinsic value stable without a fiat peg. Specifically, instead of being tied to a currency like the US dollar, the peg should be linked to the “cost of living” by tracking consumer price index and inflation data.

There are already solutions on the market that Coinbase explicitly refers to in its call for developers, “Systems such as Reflexer/RAI, Spot/Ampleforth, Frax/FPIS, Olympus DAO, etc.”. The goal of the crypto exchange is now to support developers to explore their own system of flatcoins.

It is open to other ideas that “fill the space” between fiat-linked stablecoins and volatile cryptocurrencies, the Coinbase post continues.

Three more projects in planning

In addition to the development of flatcoins, Coinbase lists three other “critical innovations” that will build on the new Layer 2 network Base: an on-chain reputation system, an on-chain limit order book (LOB) exchange, and Tools designed to make the decentralized finance (DeFi) ecosystem more secure.

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