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This Week In DeFi – February 24

This Week In DeFi – February 24

This week, Coinbase launches its own L2 network and lists Euro Coin, Mastercard enables USDC purchases via Immersve and BUSD meets the end of the road across multiple platforms.

February 24, 2023

To the DeFi community,

This week, Coinbase has launched Base, a layer 2 network built using Optimism's OP Stack, to provide a secure, low-cost and developer-friendly way to build decentralized apps.

A testnet version of Base was launched on Thursday and will not be limited to Ethereum, providing easy access to other blockchain ecosystems including Solana. Coinbase plans to progressively decentralize the chain over time, but has been clear that it has no plans to issue a new network token.

A Base Ecosystem Fund has also been announced to support early-stage projects building on the platform. Coinbase will allow developers to integrate their products with Base and provide fiat onramps, targeting an estimated 110 million verified users and $80 billion in assets on the platform.

1/ 🔵 We’re excited to announce @BuildOnBase.
Base is an Ethereum L2 that offers a secure, low-cost, developer-friendly way for anyone, anywhere, to build decentralized apps.
Our goal with Base is to make onchain the next online and onboard 1B+ users into the cryptoeconomy.
— Coinbase 🛡️ (@coinbase)
2:14 PM • Feb 23, 2023

Coinbase has also announced support the euro-backed stablecoin Euro Coin (EUROC) on its platform in regions where trading is supported.

EUROC will be supported as an ERC-20 token on the Ethereum network, but Coinbase has warned users to avoid sending the asset over other networks.

Trading for EUROC will launch with the “Experimental” label, which is designated for new or low volume tokens on the exchange. The launch of EUROC-USD and EUROC-EUR pairs will continue in phases.

The move comes right after Binance CEO Changpeng Zhao foreshadowed that non-USD stablecoins would become more prominent, as US regulators scrutinized Binance USD (BUSD).

Coinbase will add support for Euro Coin (EUROC) on the Ethereum network (ERC-20 token). Do not send this asset over other networks or your funds may be lost. Inbound transfers for this asset are available on @coinbase & @coinbaseExch in the regions where trading is supported.
— Coinbase Assets 🛡️ (@CoinbaseAssets)
5:02 PM • Feb 21, 2023

Web3 tech innovator Immersve has partnered with Mastercard to enable users in Australia and New Zealand to spend cryptocurrency using the Mastercard network.

The decentralized protocol will allow customers to remain in full control of their digital assets in a non-custodial wallet, while spending USDC for purchases on Mastercard’s network wherever the company is accepted.

USDC spent on the network will then be converted to fiat and settled on the Mastercard network.

.@Mastercard has launched a crypto card with @immersve
This one is special
It's for self hosted wallets
Most crypto cards are linked to exchanges
— Ledger Insights (@LedgerInsights)
11:53 AM • Feb 22, 2023

Stablecoin issuer Paxos says that it is engaged in "constructive discussions" with the SEC over its Binance USD stablecoin, following a Wells notice.

The firm has also announced that it will end its relationship with Binance, which it said no longer aligns with its current strategic priorities. Paxos has facilitated more than $2.8bn in BUSD redemptions since announcing that it would stop issuing the stablecoin.

Both Aave and MakerDAO are distancing themselves from some Paxos-issued stablecoins following the news, as Aave freezes BUSD markets and MakerDAO appears to be hesitant to pursue a recently discussed deal with Paxos.

Capitalization of Binance USD ( $BUSD ) has decreased by $1 billion over the past days - Paxos is actively pursuing redemptions, burning stablecoins along the way.
Meanwhile, $USDT volume & utilization has increased.
— retired (@ImNotTheWolf)
6:43 PM • Feb 20, 2023

Stablecoins have taken over the news this week, as platforms and protocols are further forced away from centralized stablecoins – this time predominantly BUSD.

The popularity of USDC and newer stablecoins such as EUROC may be on the rise, as the ecosystem appears to be strengthening around those tokens. In particular, Mastercard’s new support of USDC purchases from non-custodial wallets may provide a significant boost to Centre’s dominance.

Decentralization proponents are still anxiously anticipating the release of the non-centralized alternatives from Aave and Curve, which seemingly cannot come soon enough. Additionally, Frax’s shift away from algorithmic backing to full reserves will be an interesting one to watch.

Scaling platforms are once again also an interesting an important topic, as Coinbase launches its own Optimism-based platform for Ethereum and other blockchains. With no plans for a token, it will be interesting to see what sort of incentives they’ll use to achieve their optimistic goals – let’s see if they can compete with their already-established competitors.