Scroll researcher: Nearly every exchange will launch a Layer 2 in next 3-5 years

Last week, Coinbase became the first crypto exchange to release a testnet version of its own Layer 2 network called Base. It probably won't be the last, according to a researcher at a rival project.

“I see pretty much every exchange launching a rollup in the next three to five years,” Pseudotheos, a pseudonymous researcher at Scroll, which is building its own zk-EVM Layer 2 network, said in an interview.

They added that this would be good for Ethereum and the wider Layer 2 space because Coinbase is likely to prioritize the base network that it’s built on. This could make it easy to off-ramp from crypto on Layer 2 networks through Coinbase’s Layer 2 and the exchange itself. 

Plus it works for the exchange’s users. “At the end of the day, Layer 2s will eventually be the user space for Ethereum and sort of by having that you don’t have to deal with the high Layer 1 withdrawal cost you used to have with exchanges in the past,” Pseudotheos said.

Another benefit centralized exchanges can gain from operating a Layer 2 network is the opportunity to decentralize. 

“I see Coinbase is taking their steps and I don’t know if they’re going to decentralize or not but having a Layer 2 gives them an opportunity to do so in the future if they decide to go down that route,” said Pseudotheos.