Base Team Member Dismisses Claims of Coinbase Selling ETH
A Base team member has denied speculation that Coinbase, which operates as the Ethereum layer-2 network’s sequencer, has been offloading ether (ETH).
“Coinbase has accumulated over $300 million in ETH—more than twice all of Base’s ETH earnings since inception,” Base contributor Kabir.base.eth stated in an X post on Sunday. “Both Base and Coinbase continue to hold significant ETH reserves, publicly disclosing our long-term holdings, which exceed 100,000 ETH ($300M+).”
Kabir further clarified that Base utilizes off-chain custody for security and auditing purposes, which is why funds move to Coinbase. He emphasized that the network prioritizes earning and spending in ETH whenever possible, using it for Layer 1 transaction fees and ecosystem grants. CoinDesk has reached out to Coinbase for further comment.
The statement follows claims by pseudonymous observer Santisa, who alleged that Base has been transferring all sequencer fees to Coinbase since launch and that these funds have likely been sold.
As Base’s sole sequencer, Coinbase is responsible for ordering and finalizing transactions, ensuring faster processing. In return, the exchange collects fees in ETH for providing this service.
Santisa’s remarks echo the concerns of Sonic Labs founder Andre Cronje, who has previously warned that centralized sequencers in Layer 2 networks may create profit models that diverge from Ethereum’s broader decentralized ethos.
Layer 2 networks generate significant revenue from transaction fees but only send a fraction of these earnings to Ethereum’s mainnet for security and data availability. As a result, much of the ETH collected in fees is either retained or sold, reducing the amount of ETH burned on the mainnet—a factor that impacts the cryptocurrency’s overall supply.
“L2s are why Ethereum has become inflationary again. We need to SCALE ETHEREUM. They can implement Sonic’s technology for free—zero cost. It would 1000x their throughput,” Cronje posted on X.
