Crypto exchanges are making frequent moves into Layer2, carrying their ambitions for future markets
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Crypto exchanges are making frequent moves into Layer2, carrying their ambitions for future markets
Exchanges are racing to launch their own L2 solutions, building Web3-native blockchain networks to attract more new users and dapps.
Navigating Web3 tides with focused insightsAuthor: Alfred, LD Capital
Layer2 has become one of the most important sectors this year. Its development will enable Web3 networks to serve users with higher efficiency and lower fees while preserving advantages such as novel production relationships and smart contracts, acting as foundational infrastructure that influences the pace of future industry growth. Recently, beyond projects solely focused on the L2 space, exchanges have also been making significant moves in the L2 arena. Mantle, Base, and opBNB have successively launched or announced their L2 mainnet timelines, drawing market attention. This article will review the latest developments of exchange-backed L2s and explore the strategic motivations behind them.
I. Base
Backed by Coinbase, Base is an Ethereum Layer 2 network designed to provide anyone with a secure, low-cost, and developer-friendly way to build decentralized applications (dapps), aiming to bring the next billion users into Web3 and the crypto economy.
1. Technical Overview
Base was the first to collaborate with the OP Stack team and has become a core developer of OP Stack. It adopts Optimistic Rollup and the modularized technology stack of OP Stack, aligning closely with OP Stack’s 2023 technical roadmap. Essentially, Base inherits all the advantages of OP Stack—shared Ethereum security, EVM equivalence, currently the lowest fees among L2s, excellent scalability, and OP Stack's modular architecture. For further technical details on OP Stack, please refer to our previous report “Looking Ahead to Cancun Upgrade: Is OP Worth Being ‘Optimistic’?”.
2. Current Progress
(1) Timeline
February 23, 2023 – Launched Base testnet, promoting collaboration with Optimism and the Superchain vision
July 13, 2023 – Mainnet opened to builders
Announced August 9, 2023 – Mainnet to open fully, launching a one-month “Onchain Summer” campaign
(2) Meme Craze at End of July
Shortly after the mainnet launch on July 13, there was little capital on-chain. On July 28, the official team promoted a link for early builders to mint NFTs, requiring deployment of a smart contract on Base mainnet. After July 30, Base’s TVL began growing rapidly, surpassing $8 million within two days.
Source: Base Official
With few real applications available on-chain, most deployed smart contracts were meme-based without practical utility. Coupled with speculative trading, meme coins like “bald” surged thousands of times in value within a day before crashing back to zero. While most memes briefly shone and quickly rug-pulled, the dramatic data attracted more capital into Base. Due to the temporary lack of an official cross-chain bridge, much of this capital remained on-chain, fueling speculation. This wave generated immense market buzz for Base even before its public mainnet launch.
Source: DexScreener, July 31, 2023
(3) On-Chain Data
After announcing the mainnet launch date on August 3, TVL surpassed $120 million.
Source: L2BEAT
Total transactions: 5.75 million; Total users: over 340,000; Contracts created: 53,000; Average gas fee: $0.36.
Source: Dune
Currently, the dominant applications on-chain are DEXs, with BaseSwap ranking first, accounting for over 50% of the total TVL among the top ten DEXs.
Source: DefiLlama
3. Future Plans
(1) Vision: Building an Open Web3 Gateway
Since its inception, Coinbase has followed a four-stage plan aimed at creating an open financial system to enhance global economic freedom. Over the past decade, the first three stages have been completed: establishing protocols (*Bitcoin, Ethereum), building an exchange (*Coinbase Exchange) as a bridge for digital currencies, and developing a mass-market interface for decentralized applications (*Coinbase App and Coinbase Wallet). The company is now entering the fourth stage. Previously, Coinbase's services were built primarily on Web2 technologies. In this new phase, it aims to construct chains powered by smart contracts to host various crypto-native dapps, ultimately bringing one billion users into the crypto economy.
Source: Base
(2) Technical Roadmap
The goal for 2023 is to work with OP Labs and the Optimism Collective to advance Base and OP Mainnet from Stage 0 Rollups (*defined by Vitalik) to Stage 1 Rollups, achieving high levels of decentralization and trustlessness.
A. Implement Fault Proofs: Launch at least one fault proof for the OP Stack, protecting Base and OP Mainnet by using a set of verifiers to detect and challenge invalid transactions.
B. Advance Decentralization: Decentralize the upgrade capabilities of Base and OP Mainnet smart contracts by initially transferring control to a Security Council whose quorum cannot be dominated by any single entity.
C. Launch the Superchain: Introduce the initial version of the Superchain capable of sequencing transactions across Base, OP Mainnet, and any OP Stack rollups, safeguarding everyone’s right to participate in these ecosystems.
The 2024 goal is to push Base and Optimism Mainnet toward Stage 2, matching Ethereum in terms of decentralization and security.
4. Project Features
(1) No Token Plan for Now: Base has clearly stated via official channels that there is currently no plan to issue a network token. (*This is likely due to U.S. regulatory compliance considerations; changes may occur depending on how Coinbase navigates its regulatory battle with the SEC.)
(2) Building an Open Chain: Base aims to build a bridge, not an island. It intends to provide access to Ethereum L1, other L2s, and other L1 ecosystems like Solana. Beyond enabling interoperability, Coinbase products will support as many chains as possible.
(3) Ecosystem Synergy with Coinbase: With nearly 100 million users and $130 billion in assets under management, Coinbase’s integration with Base will bring these users onto-chain. Base also hopes to attract new users through its on-chain gateway, who may then join the broader Coinbase ecosystem.
II. Mantle
Backed by BitDAO and Bybit, Mantle Network is an Ethereum Layer 2 using Optimistic Rollup, supported by a substantial Mantle treasury, with product development and roadmap decisions governed entirely by token holders.
1. Technical Overview
(1) Modular Architecture and Data Availability
Similar to OP Stack, Mantle employs a modular architecture where core blockchain functions (*execution, consensus, settlement, data availability) operate on specialized layers. This approach helps mitigate the blockchain trilemma to some extent. In terms of scalability, resource separation improves network efficiency as each layer specializes in a specific task. For security, all users operate at the same security level. Regarding decentralization, technologies like fraud proofs and zk-proofs running across different layers reduce the overall execution and validation load on nodes, eliminating the need to re-execute every transaction to verify validity.
Thanks to this modular design, Mantle features a dedicated data availability layer (DA), allowing increased throughput without compromising security or increasing the burden on validating nodes. Mantle’s DA is powered by EigenDA technology.
(2) Threshold Signature Scheme (TSS)
One limitation of Optimistic Rollups is the long withdrawal challenge period. To address uncertainty during transaction validation, Mantle implements a distributed signature scheme to verify block data. This paradigm, combining distributed key generation with digital signatures, is commonly known as a Threshold Signature Scheme (TSS). TSS allows each party in the client network to generate valid signatures and ensures verifiability of distributed signature data (*as long as enough honest signers participate). Since each TSS client holds only a portion of the private key, the key itself is no longer a single point of failure.
By leveraging TSS technology, dedicated nodes contribute multi-party signatures to improve off-chain transaction correctness, thereby shortening withdrawal challenge periods. However, current TSS nodes are authorized exclusively by Mantle’s core contributors, meaning they remain centralized.
Source: Mantle
(3) Enhanced Fraud Proofs
In prevailing fraud proof models, dispute resolution contracts (*on-chain verifiers) can only execute instructions within low-level virtual machines like MIPS or WASM. This forces Ethereum Virtual Machine (EVM) clients to recompile their fraud proofs into lower-level languages so on-chain verifiers can interpret them, meaning fraud proof content is generated outside the EVM environment.
Mantle Network uses an interactive fraud proof mechanism to establish transaction validity and compiles and verifies fraud proofs using EVM-level instructions (*eliminating the need for low-level translation and avoiding ambiguity).
Source: Mantle Overall Architecture
2. Current Progress
(1) Timeline
January 10, 2023 – BitDAO announced the launch of Mantle Network, a modular Ethereum Layer 2 testnet
May 19, 2023 – The BitDAO community passed a proposal titled “Brand, Token, and Tokenomics Optimization” with 100% approval. The BitDAO, Mantle, and BIT ecosystem would be unified under the name Mantle, and the BIT token would be converted to MNT
July 17, 2023 – Mantle Network announced the launch of its mainnet Alpha version at EthCC
(2) Token Economics and Token Swap
Mantle officially enabled token swaps at 6:00 AM UTC on July 17, 2023, allowing 1:1 conversion from BIT to MNT.
Current MNT total supply: 6,219,316,794 tokens, with 52% in circulation, 47.4% held in treasury, and 0.6% allocated to core team budget. The MNT token serves dual roles as both governance and utility token within the Mantle ecosystem, granting holders voting rights and functional benefits. (*Due to factors such as token swap mechanics and governance proposal approvals, Mantle’s tokenomics may evolve further.)
Source: Mantle
(3) On-Chain Data
TVL: $92 million. Due to the large amount of MNT tokens released at launch, circulating supply is approximately 320 million, priced at $0.505, giving a market cap of $1.6 billion.
Source: L2BEAT
Recent daily transactions exceed 100,000, wallet addresses exceed 160,000, and total transactions exceed 1.1 million.
Source: Mantle
The top application by TVL is its native DEX, Agni Finance, which uses a ve(3,3) mechanism and accounts for over 63% of the combined TVL of the top ten DEXs.
Source: DefiLlama
3. Future Plans
(1) Technical Roadmap
The official team has disclosed further technical plans: optimizing fraud proofs at the L1 level, including transitioning from core contributor-authorized nodes to permissionless fraud proofs; focusing on EIP-4844 optimizations between L2 and L1; improving the EVM-compatible environment at the L2 level; and upgrading the centralized sequencer to a decentralized sequencer.
Source: Mantle
4. Project Features
(1) Strong Financial Backing
BitDAO is one of the largest DAOs and possesses one of the largest treasuries, currently holding $3.8 billion in reserve assets. These assets are largely attributable to contributions from Bybit, which has donated over $600 million in USDC/USDT and 177,000 ETH to the BitDAO treasury.
Source: BITDAO
Through the merger of BitDAO and Mantle, Mantle Network has inherited nearly $300 million in stablecoin reserves and approximately 270,000 ETH (*worth $489 million), which will serve as a core competitive advantage driving the entire on-chain ecosystem.
Source: Mantle
(2) LSD Strategy
The Mantle community has approved a proposal to introduce Mantle LSD and mntETH. Users, including the Mantle Treasury, can deposit ETH and receive yield-bearing mntETH receipt tokens. Validation services will be outsourced to external node operators.
Currently, the Mantle treasury holds nearly 270,000 ETH. For comparison, Frax, ranked fourth in the LSD sector, has staked 245,000 ETH, and StakeWise, fifth, has staked 94,000 ETH. This suggests Mantle could quickly gain prominence if it aggressively pursues the LSD space.
Source: DefiLlama
III. BNB Chain – Layer 2
Supported by BNB Chain and Binance, two L2 solutions have been developed based on BSC: opBNB and zkBNB, aimed at enhancing BSC’s performance. Currently, opBNB is advancing faster and utilizes OP Stack technology.
1. Technical Overview
BNB Chain consists of two blockchains: the BNB Beacon Chain (*BC) and the BNB Smart Chain (*BSC). The BNB Beacon Chain handles governance, staking, and voting on the BNB Chain. The BNB Smart Chain is an EVM-compatible blockchain component with a consensus layer and a multi-chain hub.
Source: BNB Chain
zkBNB and opBNB are BSC’s Layer 2 scaling solutions. Unlike other L2s discussed in this article, zkBNB and opBNB are designed with BSC as Layer 1 rather than Ethereum. Although BSC is significantly faster than Ethereum, further scalability improvements via L2 remain crucial given its role in hosting numerous games.
zkBNB – zkBNB is an infrastructure built on a zk-Rollup architecture for developers, intended to help them build large-scale BSC-based applications with higher throughput and lower—or even zero—transaction fees. It is currently in the testnet phase. Arnaud Bauer, Senior Solutions Architect at BNB Chain, mentioned in a mid-year interview with The Block that zkBNB is not yet EVM-compatible, which is why opBNB was prioritized.
opBNB – opBNB Network is a Layer 2 scaling solution for the BNB Smart Chain, powered by OP Stack technology. It achieves scalability while inheriting BSC’s Layer 1 security and EVM compatibility. (*OP Stack details are not elaborated here.)
2. Current Progress
(1) Timeline
February 14, 2023 – BNB Chain released its 2023 technical roadmap, setting scalability as a long-term goal
June 19, 2023 – Announced launch of opBNB testnet
August 2, 2023 – Announced opBNB mainnet launch mid-August, initially opening to infrastructure providers, with public access expected by late August or early September (*zkBNB was originally a key focus for scalability this year but has seen no recent updates)
(2) On-Chain Data
Currently, ETH’s TVL is about seven times that of BSC, while BSC’s transaction volume is three times that of ETH, and total fees amount to just 7.7% of ETH’s. Among L1s, BSC offers lower fee consumption compared to ETH, whereas ETH hosts the largest capital pool.
Source: DefiLlama
On L2, opBNB testnet averages 100,000–150,000 daily transactions, with average block time of 1 second, daily active accounts ranging from 6,000 to 20,000, and transfer fees around $0.005 per transaction.
Source: opBNB-Scan
3. Future Plans
BNB Chain’s 2023 technical roadmap focuses on five areas:
(1) Improve Overall Network Performance: Increase block gas limits, implement parallel EVM, upgrade BSC nodes and clients
(2) Enhance Scalability: Achieve BSC scalability through a multi-chain strategy, primarily via zkBNB and opBNB rollups. Currently, opBNB is progressing faster, while zkBNB was originally planned for launch this year.
(3) Build New Infrastructure: Deploy additional infrastructure, with a focus on decentralized storage. BNB Greenfield was launched this year, allowing users and dApps to create, store, and exchange data with full ownership, forming a new data economy. Storage is also critical for further network performance gains.
(4) Increase Decentralization: Expand active validator seats from 29 to 100 by end of 2023 and introduce more consensus mechanisms and on-chain governance.
(5) Strengthen BNB Security: Introduce new security services, risk management frameworks, and enhanced cross-chain component security.
Source: BNB Chain
4. Project Features
(1) L2 Built on BSC
BSC outperforms ETH in processing speed and fee efficiency. Leveraging opBNB technology will further boost performance via L2 scaling.
(2) Mature and Comprehensive BNB Chain Ecosystem
Binance is currently the largest cryptocurrency exchange, with the most users and capital. BNB Chain has established diverse infrastructure and applications within its ecosystem, enabling flexible and efficient adaptation to opBNB and maximizing ecosystem and token value.
IV. Conclusion
In the second half of this year, Layer 2 discussions will grow louder—perhaps an "L2 Summer" is coming. From a technical standpoint, mainstream L2 approaches are converging, favoring scalable modular architectures. Optimistic Rollups are being adopted more widely due to their deployability, and OP Stack is gaining more external partnerships.
Exchanges are increasingly investing in their own L2s, primarily to leverage existing CEX user bases and capital to build Web3-native blockchain networks. This enables them to onboard more new users and dapps, creating more diversified business structures and growth opportunities. Going forward, it remains to be seen who will solidify or shift their position through L2 innovation. Let’s wait and see.
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