Base, the Ethereum Layer 2 (L2) chain incubated by Coinbase, has been unable to accept deposits or withdrawals for approximately 48 hours.
On June 25, L2 said it encountered a consensus issue that caused an invalid block to be queued. The statement was made on June 25 at 17:21 UTC. The issue was isolated and debugged, and the team soon announced a broader recovery was in progress.
However, as of 10:36 UTC on June 26, the issue was not fully resolved. In fact, the state of the chain indicated that the mainnet block product was “unhealthy.”
Deposits and withdrawals, as well as block production, were also affected on the second day. Remarkably, withdrawals only partially declined, but deposits were facing a “major disruption”.
Base co-founder Jesse Pollak reassured users that funds were safe and that they were working on a full autopsy.
He added that stopping the chain to fix the problem was undesirable and would pose a challenge to do better in the future.
All funds were/were safe. But stopping is not right, and we will use this to continue leveling Base as a global, 24/7 financial platform. Thank you for your patience.
Base’s bet on tokenization
Separately, Pollak noted that Base will allow a DeFi-like borrowing and lending option for tokenized assets once they go live on the chain.
This is part of a larger bet tokenization As the newly formed segment gains traction. Unfortunately, a chain disruption like the recent one is not a good look for such a target.
However, Base debuted in the second half of 2023 and has seen massive growth in the last few months. It generated cumulative revenue of over $184 million, with a total value locked (TVL) of $4 billion.
Source: DeFiLlama
Half of the $4 billion worth of value locked is in DeFi lending platform Morpho Blue. It is not yet known whether the ongoing disruption will damage investor confidence and trigger outflows.
Final Summary
- The underlying chain faced a consensus issue that caused partial withdrawals and deposits to be disabled.
- Base co-founder Jesse Pollak is investing heavily in tokenized assets with DeFi-like lending and borrowing options
