Three-Year "Decentralization" Promise Comes to Nothing, Is Base Still Marking Time?
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Three-Year "Decentralization" Promise Comes to Nothing, Is Base Still Marking Time?
Why Is Base Still Reluctant to Remove the "Training Wheels"?
Navigating Web3 tides with focused insightsBy: Jon Reiter
Compiled by: Saoirse, Foresight News
In August 2023, we published an article arguing that Base is essentially just a tool for Coinbase to provide centralized custodial transfer services without implementing customer identification and anti-money laundering checks, and that the platform deliberately piles up obscure technical jargon and vague visionary slogans to conceal the true nature of this business. Recently, Jesse Pollak (Base co-founder) confirmed externally that the Base application has been reintegrated under the parent company Coinbase for unified management, Jordan Fish (known online as Cobie), well-known in the industry, will independently oversee this product line, and in the future, this product may even expand beyond the Base ecosystem; this fact makes our viewpoint from back then even harder to refute.
Coinbase holds multiple financial licenses globally, and this operation poses serious compliance issues, both in the past and present. As early as February 2023, Coinbase voluntarily admitted that at the time of Base's launch, it possessed no decentralization attributes whatsoever, and released a decentralization roadmap externally that year. We will elaborate below, but the conclusion first: this roadmap was shelved long before achieving any substantial progress. The authoritative industry Layer 2 monitoring platform L2Beat currently rates Base as Stage 0 (this rating will be downgraded from Stage 1 to Stage 0 in August 2026), and the entire network is fully backed and controlled by the platform throughout. To simply explain the industry terminology: this highly recognized industry Layer 2 monitoring institution determines that Base possesses no decentralization characteristics.
After our article was published in August 2023, Coinbase immediately released a Superchain ecosystem decentralization commitment, explicitly admitting in the text that Base is fully operated by Coinbase, and claiming it would coordinate development with Optimism and the entire Superchain ecosystem to gradually solve centralization issues. But like the previous roadmap, this commitment was also shelved without achieving substantial progress.
In 2024, Vitalik publicly stated, calling on the industry to stop focusing on promoting Stage 0 Layer 2 products and fully push all projects toward the Stage 2 decentralization standard. In February 2026, Vitalik even directly overturned the core idea that 'Layer 2 scaling is the optimal solution for Ethereum scaling', reasoning that 'the industry's progress toward the Stage 2 standard is far slower and more difficult than initially imagined'.
It needs to be objectively stated here: whether in 2023 or 2024, no project in the industry produced a mature Stage 2 implementation technical solution that balances security and scaling capabilities; to this day, these projects mentioned by Vitalik still have not completed this full solution. This is not because teams failed to execute clear plans, but because the entire industry's R&D to date has failed to overcome the core technical solution. To use an analogy: it is like a Mars exploration program where the complete blueprint for the rocket has not yet been designed, but R&D funds are exhausted, forcing the project to be shelved. Initially, the industry bet on quickly breaking through the decentralization technical path; today, this bet has failed.
The above is a streamlined overview of the industry status over the past three years; the vast majority of Ethereum Layer 2 networks have similar issues: the decentralization progress of all Layer 2 projects is either slow and intermittent, or completely stalled.
Next, we will meticulously dissect the complete development context of Base, and then face the core difficult problems that the industry avoids talking about: When a Layer 2 network remains long-term at Stage 0 under full official control, what difference is there between it and custodial fund institutions or fund transfer service providers? When should regulatory agencies initiate investigations against such platforms that lack compliance licenses and skip customer identification and anti-money laundering processes?
Base Development History
Coinbase's initial roadmap planned to implement permissionless fault proof mechanisms in 2023. Even if you don't understand this technology, it doesn't matter; the key point is: this core component did not launch as scheduled in 2023, and it is precisely the necessary link to remove the official control backup mechanism; the delayed implementation directly buried huge hidden dangers.
It was not until April 2025 that Coinbase finally officially announced the completion of this milestone. At that time, L2Beat classified Base as a Stage 1 Layer 2 network, defined as 'basically achieved decentralization, but still retains an emergency backup mechanism that officials can fully take over'. Of course, the stage classification itself carries certain subjective evaluation criteria, and industry rating standards are continuously updated; the technical level achieved back in April 2025 would only be classified as Stage 0 under full official control according to current new standards. It is worth mentioning that multiple security incidents in recent years have confirmed that those control permissions claimed to be 'enabled only in emergencies' are being used by platforms with increasing frequency, and the actual control power far exceeds the level originally promoted by project teams externally; thus, the industry's stage classification standards are also continuously tightening.
This is a common chaos in the Web3 industry: not just superficial 'decentralization performances', but project parties also misappropriate the backend control permissions originally intended for 'security protection and user asset safeguarding' for other uses; in extreme cases, they may even directly steal user assets. Many protocols that claim to be decentralized suffered huge losses because the team privately stored administrator keys, and assets were stolen after the keys were leaked.
For many years, this publication has consistently adhered to a set of conservative evaluation criteria: all centralized control permissions must be deduced according to the worst-case scenario; during evaluation, it is defaulted that the operator exists with malice, strictly evaluating 'whether the platform has the ability to make off with all user assets'. Past various security events have also continuously confirmed the rationality of this evaluation logic; nowadays, more and more practitioners are also beginning to agree with this view.
Returning to the main line of Base's development: even though progress was lagging and effects were limited, the project had once achieved a small amount of progress within the roadmap. But in February 2026, Coinbase announced the complete abandonment of the original plan to rely on Optimism to promote decentralization, turning instead to build a technical stack fully controlled by Base itself. Before the adjustment, part of Base's administrator permissions were jointly held by Coinbase and Optimism; after the adjustment was completed, all control permissions were consolidated into two sets of multi-signature wallets: Centralized Security Council Multi-sig, Centralized Coordinator Multi-sig. Coinbase has strong funding and huge industry influence; originally it could exert considerable intervention on Optimism, and now it can even completely sway the individuals and small cooperative institutions behind the two sets of multi-sig wallets.
Thus far, Coinbase has not only fallen far behind the 2023 established plan but also directly abandoned the entire roadmap, without launching any alternative development plan with feasibility. More critically, the small portion of control power originally briefly diverted to Optimism has now been fully taken back into Coinbase's hands. Joint venture institutions could have custodied assets together; the cooperative architecture between Coinbase and Optimism also briefly achieved this, at least counting as a tiny step toward the 2023 roadmap. But with the roadmap being completely abandoned, Base can no longer produce any basis for substantially promoting decentralization. Various marketing promotions do not equal implementation progress; empty gimmicks do not count as actual construction.
In June 2026, Base encountered two network interruption incidents in succession; during the repair process, Coinbase directly modified the underlying code, rolled back the entire blockchain data, and forced all nodes across the network to synchronize and update the repair package to resume operation. After three and a half years online, Base still remains at the fully centralized Stage 0; the platform party can use control permissions at any time to directly dispose of user assets; the fact is clear at a glance.
A Centralized Distributed Database
The repair operations of the two outages completely exposed the essence of Base: it is just an ordinary centralized distributed database. There are countless mature commercial solutions on the market: Oracle, SAP, IBM all have high-stability commercial databases; MySQL can be deployed and used for free; major cloud providers also offer cloud distributed database services. As long as business transaction volume matches the hardware capacity limit, distributed database is already a mature implemented technology, running stably and reliably; only when bearing super-large scale traffic will performance bottlenecks be encountered.
Base's transaction volume is only a few hundred transactions per second; the performance level is equivalent to traditional systems of the 1980s and 1990s. Reviewing industry reports from the internet bubble period 20 to 30 years ago reveals that the transaction scale borne by many traditional enterprises back then was several orders of magnitude higher than Base. This performance level is far earlier than the birth of Bitcoin, even earlier than the popularity of smartphones; in early years, online banking could only be operated via computer webpages; users also had to manually check the HTTPS encryption identifier before entering passwords; it is a very old technical level.
Everyone can check reports from 2001 regarding eBay platform system failures in the late 90s. We are not belittling system operation and maintenance difficulties; having personally experienced various technical limitations of the 90s: back then, digital camera images could only be read via serial ports; when doing medical imaging work, a computer worth equivalent to a high-end car could not load dozens of 16-megapixel black and white images at once; but nowadays, even the cheapest Samsung phone can easily store and smoothly open image files several times this size.
But this does not mean Base is overcoming old technical difficulties. If one wants to achieve the performance of 90s traditional servers in a permissionless, globally distributed decentralized network, the engineering difficulty might be extremely high, or perhaps not difficult — but Base has not exerted effort in this direction at all. Today's Base is just a distributed database with low efficiency, poor stability, and terrible experience, while similar database technology became fully mature decades ago. Coinbase has grand visions for Base; in 2023 and 2024, the industry could still be tolerant, discussing whether regulatory standards should be relaxed for innovation; but by 2025, this rhetoric has long caused aesthetic fatigue.
Base has been online for three and a half years, underlyingly equipped with blockchain, but this blockchain has not been used to create any new, original product logic; from start to finish, the entire system is still centrally operated by Coinbase. Instead, blockchain increases operation and maintenance difficulty out of thin air, equivalent to actively choosing 'hard mode' to run a set of long-mature database technology, yet still failing to achieve decentralization through this. One cannot demand regulators give special preferential treatment just because an enterprise deliberately chooses a more complex, troublesome technical solution.
Why We Always Emphasize the Entity is Coinbase, Not Base
In the article, we frequently point the control entity to Coinbase rather than Base; this statement has sufficient factual support. Everyone can check the Coinbase official announcement blog; at the end of the text, the recruitment section writes such a passage:
Building the next generation internet is a common cause for everyone. If you are interested in scaling, security protection, or promoting Base decentralization, welcome to apply for our positions; click here to view recruitment requirements.
After clicking the recruitment link, it jumps to the Greenhouse recruitment platform; all positions are clearly marked, hired personnel belong to Coinbase, identity as formal employees or outsourced contractors. In the announcement comment section, Coinbase formal employees also uniformly use 'we' to refer to the Base team. In the full text of Base official website's user agreement and privacy policy, Coinbase entity identifiers are also visible everywhere.
Coinbase's external promotion logic is: Coinbase only acts as an incubator; after the project achieves decentralization, Coinbase does not need to bear relevant legal responsibilities. But reality is clearly visible; the entire system is operated by Coinbase full-time employees; and Stage 0 Layer 2 networks simply do not have decentralization; therefore, Base is essentially business under Coinbase. This is also the core reason why this article directly names Coinbase throughout.
Industry Prospects and Legal Controversies
The Web3 industry is often questioned on a core issue: many projects completely do not need blockchain, yet forcibly pile on chain technology. Base's initial explanation was: blockchain is the only technology with potential to efficiently solve scaling problems; this viewpoint remains controversial to this day. But after several years of construction with zero substantial progress, three sharp questions have to be put on the table:
- Did the decentralization roadmap released by Coinbase back year have no complete feasible execution plan from the very beginning?
- Combining the current status of Base and the entire industry's Layer 2 network stagnation, is achieving complete decentralization in the short term feasible?
- How much tolerance period should regulatory agencies give to innovation, and when should compliance investigations be initiated?
Coinbase holds financial licenses in multiple countries; according to law, it must not operate a fund transfer platform that requires no customer identification and is not subject to custodial regulation, this is both a hard obligation attached to various licenses and laws and regulations uniformly applicable to all market entities. In the early stage of new project launch, moderate regulatory tolerance is reasonable; software R&D itself has vulnerabilities, user asset security needs running-in; the industry can understand this. But no reasonable viewpoint would believe that after as long as 40 months with absolutely no decentralization progress, one can still infinitely enjoy regulatory leniency policies.
As a US-listed company, Coinbase has an obligation to publish true and accurate public information externally, especially content concerning company business planning, development prospects, and shareholder rights. If Coinbase has had no formed decentralization implementation plan from start to finish, and externally only brings out vague 'conceptual ideas' for vigorous promotion, it will create serious integrity issues: Did the company deliberately conceal its own technical shortcomings and falsely promote to the market that it possesses decentralization implementation capabilities?
Development work with zero progress for consecutive years, rather than industry construction, is more like deliberately consuming the regulatory tolerance period. From February 2023 to August 2026, Base's decentralization rating remained at Stage 0, with no positive breakthroughs. The development team indeed completed basic work such as coding and launching; the platform also circulated a large amount of user assets, completing 'work' from a physical level; but the so-called output is only the team's continuous marketing promotion; on the core goal of decentralization, no substantial results were produced.
Even if Base adds more functions and more complex underlying mechanisms, it does not matter. The evaluation standard is never whether engineers find R&D interesting or whether basic development work is completed; the core standard is: whether this system can provide legal, practically valuable services, and match the project planning publicly disclosed by Coinbase.
Looking at the current status, Coinbase's series of operations are essentially attempting to package 'we have never mastered the implementation path for compliant decentralization' into 'we are overcoming major industry difficulties and should be permanently exempt from regulatory constraints'. This rhetoric was already heavily questioned several years ago; nowadays, it is full of loopholes.
Corporate innovation should reasonably obtain moderate trial-and-error space; we do not require all project plans of listed companies to be perfect and implemented without error. But consecutive years of failed planning, and operation models suspected of conducting fund custodial and transfer business without licenses, must inevitably bear corresponding legal consequences. Otherwise, financial regulatory rules will lose all binding force.
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