Why Coinbase is building over L2 chains?

Coinbase is building on Layer 2 (L2) blockchains to address some of the scalability and performance issues that can arise when a blockchain network becomes congested with too many transactions.

The fact that Coinbase is a cryptocurrency exchange means that it handles a lot of transactions every day, which might result in more expensive fees and extended confirmation periods on the main blockchain network.

By relying on L2 blockchains, Coinbase can provide its consumers with quicker and less expensive transactions, enhancing the overall user experience and drawing more users to its platform.

L2 solutions can also lessen the strain on the main blockchain network, which is advantageous for the entire ecosystem. L2 solutions can assist in reducing network congestion, lowering fees, and improving the general scalability of the blockchain by transferring some of the computing effort to a secondary network.

Finally, Coinbase can give its consumers access to a greater variety of blockchain-based applications and services by constructing L2 blockchains. Through L2 solutions, new use cases that may be challenging to implement on the main blockchain due to scalability restrictions, such as micropayments, gaming, and decentralized finance (DeFi), can be made possible.

Ultimately, utilizing L2 blockchains can aid Coinbase in enhancing the platform's scalability, performance, and user experience while also fostering the expansion and advancement of the larger blockchain ecosystem.

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