Base Team Member Refutes Claims That Its Sequencer Coinbase Has Been Selling ETH

Base Team Member Refutes Claims That Its Sequencer Coinbase Has Been Selling ETH

Coinbase Dismisses ETH Liquidation Rumors, Confirms $300M+ Holdings

A member of the Base Layer 2 team has publicly refuted claims that Coinbase has been selling off large amounts of Ethereum (ETH). In a post on X, Base contributor Kabir.base.eth stated that Coinbase holds over $300 million worth of ETH, more than twice the total amount Base has earned in ETH since its inception.

"Coinbase has accumulated $300M+ in ETH, which is more than 2x all of Base's ETH earnings over time," Kabir said, emphasizing that both Base and Coinbase continue to hold significant long-term ETH reserves exceeding 100,000 ETH.

The comments came in response to speculation from pseudonymous crypto observer Santisa, who claimed that Base had been transferring all its sequencer fees to Coinbase and that the exchange had likely liquidated those assets. However, Kabir clarified that Base keeps ETH in off-chain custody for security and auditing purposes and primarily uses the asset to cover Layer 1 transaction costs and grant funding.

The discussion gained traction after Andre Cronje, founder of Sonic Labs, weighed in on the broader impact of Layer 2 solutions on Ethereum’s economic model. Cronje argued that centralized Layer 2 sequencers, such as Coinbase, retain a large portion of ETH transaction fees instead of burning them on the Ethereum mainnet. He suggested that this mechanism contributes to making Ethereum inflationary again.

“L2s are why Ethereum is inflationary again. SCALE ETHEREUM. They can get the Sonic tech for free. 0 charge. Will 1000x their throughput,” Cronje stated on X, advocating for more efficient scaling solutions.

The debate highlights ongoing concerns about Ethereum’s long-term economic sustainability and the role of major centralized entities in shaping its future.