• Coinbase CLO Paul Grewal said Base functions as infrastructure, not an exchange, under securities laws.
• Base team is exploring a native token and launched a Solana bridge to expand interoperability.
• Base holds $4.83B TVL across 700+ protocols, with daily DEX volumes near $2B and rising adoption.

Coinbase’s chief legal officer Paul Grewal stated that the company’s Layer-2 network Base does not operate as an exchange, addressing concerns raised by ongoing U.S. regulatory scrutiny. Speaking in an interview with Bankless, Grewal described Base as blockchain infrastructure that processes transactions but does not match securities trades. His remarks arrive as regulators examine the role of Layer-2 sequencers within federal securities law.

Base’s Position in the Exchange Debate

Grewal explained that applications built on Base, such as decentralized protocols, handle order matching. He emphasized that Base itself only operates as a blockchain layer built on Ethereum. He said treating Base as an exchange would misinterpret how the network functions.

U.S. Securities and Exchange Commission rules define an exchange as a platform that matches buyers and sellers of securities. Commissioner Hester Peirce warned earlier this year that centralized sequencers could resemble exchange engines and potentially fall under SEC jurisdiction.

Ripple chief technology officer David Schwartz supported Grewal’s remarks. He compared Layer-2 systems to cloud service providers such as Amazon Web Services, which host software without being classified as exchanges. Ethereum co-founder Vitalik Buterin also praised Base for combining centralized sequencing with Ethereum’s security model.

Token Exploration and Expansion Plans

Coinbase’s roadmap for Base is also changing. At the BaseCamp 2025 event, project lead Jesse Pollak confirmed that the team is examining the possibility of a native token. Pollak explained that no final decision has been made on design, governance, or timing. He noted that exploration aims to accelerate decentralization and provide new opportunities for developers.

The update follows Consensys’ Linea network token launch, which distributed more than 9.3 billion LINEA tokens. Alongside token discussions, Base also announced an open-source bridge with Solana, designed to allow transfers between ERC-20 and SPL tokens.

Growing Role in Decentralized Finance

Base launched in 2023 and has since built a strong presence in decentralized finance. According to DeFiLlama data, the network holds $4.83 billion in total value locked across more than 700 protocols. Stablecoins dominate liquidity, with $4.4 billion in circulating supply driving lending and trading activity.

Daily decentralized exchange volumes approach $2 billion, with an additional $1.1 billion from perpetuals trading. In a 24-hour span, Base recorded $237,000 in fees and activity from nearly 740,000 addresses. Bridged liquidity stands at nearly $20 billion, showing significant inflows not yet fully deployed in DeFi protocols.

Protocols driving adoption include Aerodrome, Uniswap, Aave, and Spark. Spark reported a 41% monthly increase in total value locked, making it one of the fastest-growing platforms on Base.