Woofun AI reports that Base, the Layer 2 network launched by Coinbase, has remained a fully centralized Stage 0 system for over three years, with Jesse Pollak confirming the product line is now under the direct management of Jordan Fish, also known as Cobie. This operational reality contradicts the initial narrative presented by Jon Reiter and compiled by Saoirse for Foresight News, which argued in August 2023 that the platform functions primarily as a tool for centralized custody and transfer services without mandatory customer identity verification or anti-money laundering checks.

The platform has allegedly utilized confusing technical jargon and vague future-oriented slogans to obscure the fact that it operates as a centralized entity, a claim that gains further weight as Coinbase, holding multiple financial licenses globally, continues to face serious compliance issues regarding these unlicensed operations. The core thesis remains that Base is not an independent decentralized network but a centralized extension of Coinbase, a status that has persisted despite public commitments to the contrary.

The historical trajectory of Base reveals a pattern of abandoned roadmaps and unfulfilled promises regarding decentralization. As early as February 2023, Coinbase admitted that Base possessed no decentralized attributes from its inception, simultaneously releasing a roadmap intended to guide the network toward decentralization.

However, this roadmap was abandoned long before any tangible progress could be realized, a fact underscored by L2Beat, an authoritative monitoring platform for Layer 2 networks, which has rated Base as Stage 0. This rating, which is projected to drop from Stage 1 to Stage 0 in August 2026, signifies that the entire network remains under the full control of the platform operator. In simple terms, this highly respected industry agency has determined that Base lacks any genuine decentralized characteristics.

Following the publication of critical analysis in August 2023, Coinbase issued a commitment to decentralize its hyperchain ecosystem, admitting that Base is operated entirely by Coinbase and pledging to collaborate with Optimism and the broader hyperchain ecosystem to address centralization. Yet, like the previous roadmap, this commitment was also discarded without any real progress, leaving the network in a state of perpetual centralization.

Industry leaders have increasingly criticized the stagnation of Layer 2 networks, with Vitalik publicly calling on the industry in 2024 to stop focusing on Stage 0 products and instead push all projects toward Stage 2 decentralized standards. By February 2026, Vitalik had further overturned the core industry assumption that Layer 2 scaling is the optimal solution for Ethereum scaling, arguing that the progress toward Stage 2 standards is much slower and more difficult than initially envisioned.

It must be noted objectively that neither in 2023 nor in 2024 did any project in the industry present a mature technical solution for Stage 2 that successfully balanced security and scalability. To this day, the projects mentioned by Vitalik still have not developed such a complete solution. This failure is not due to teams failing to execute clear plans, but rather because the entire industry has yet to overcome the core technical challenges required for true decentralization.

The situation is akin to a Mars exploration project where the rocket's design is not yet finished and research funds are exhausted, forcing the project to be shelved. The industry once bet that decentralized technology paths could be quickly established, but that bet has now failed, leaving most Ethereum Layer 2 networks facing similar problems where decentralization progress is either slow, intermittent, or completely stagnant.

The specific development timeline of Base highlights the critical delays in implementing essential security mechanisms. Coinbase's initial roadmap planned to implement a permissionless proof-of-fault mechanism by 2023, a core component essential for removing official control mechanisms from the network. This technology was not launched as scheduled in 2023, creating significant risks that persisted for years.

It was not until April 2025 that Coinbase finally announced the completion of this milestone, at which time L2Beat rated Base as a Stage 1 Layer 2 network, defining it as "basically decentralized but still retaining an emergency fallback mechanism that can be fully taken over by officials." However, Stage classification involves subjective criteria, and industry rating standards continue to evolve; the technical level achieved in April 2025 would only be classified as Stage 0 under today's new standards, meaning full official control.

Numerous security incidents in recent years have demonstrated that these so-called 'emergency-only' control permissions are being used more frequently by platforms, with actual control far exceeding what project teams initially claimed. Consequently, industry stage classification standards have become stricter, reflecting a common problem in the Web3 industry where project teams use backend control permissions, originally intended for 'security protection and user asset safeguarding,' for other purposes, sometimes even stealing user assets.

Many protocols claiming to be decentralized suffer losses due to teams hiding administrator keys, leading to asset theft after key leaks.

Security risks have escalated as Coinbase shifted from shared control to full centralized authority. Despite delays and limited results, the project made some progress along the roadmap until February 2026, when Coinbase announced it would completely abandon its original plan to rely on Optimism for decentralization and instead build a technology stack fully controlled by Base itself. Before this adjustment, some administrator permissions for Base were held jointly by Coinbase and Optimism; after the adjustment, all control permissions were consolidated into two multisig wallets: one for the centralized security committee and another for the centralized coordinator.

With its substantial funds and huge influence in the industry, Coinbase could already exert considerable influence over Optimism, and now it can fully control the individuals and small cooperative institutions behind those two multisig wallets. By this point, Coinbase not only fell far behind the plans set in 2023 but also completely discarded the entire roadmap without introducing any viable alternative development plans. More importantly, the small portion of control rights briefly assigned to Optimism was taken back entirely by Coinbase.

Joint ventures could have jointly managed assets, and Coinbase's partnership with Optimism briefly achieved this, at least taking a small step toward the 2023 roadmap. But with the roadmap completely abandoned, Base no longer has any basis to make real progress toward decentralization, as marketing promotions do not equal actual progress and gimmicks do not count as real development.

Woofun AI data shows: Network outages in June 2026 exposed the underlying reality of Base as a centralized distributed database rather than a decentralized blockchain. During repairs for two consecutive network outages, Coinbase directly modified the underlying code, rolled back the entire blockchain data, and forced all nodes in the network to sync the repair package before operations could resume. Three and a half years after launch, Base remains stuck in fully centralized Stage 0, with the platform able to use control permissions at any time to deal with user assets.

A centralized distributed database and two downtime repair operations have completely exposed Base's true nature: it is just an ordinary centralized distributed database. There are countless mature commercial solutions available on the market, including Oracle, SAP, and IBM, all of which offer highly stable commercial database services. As long as business transaction volume matches hardware capacity limits, distributed databases have long been mature technologies that operate stably and reliably, with performance bottlenecks only occurring when handling extremely large volumes of traffic.

Base's transaction volume is only a few hundred transactions per second, and its performance level is equivalent to that of traditional systems from the 1980s and 1990s. Looking at industry reports from the Internet bubble era 20 to 30 years ago, many traditional companies at that time handled transaction volumes several orders of magnitude higher than Base's. This performance level predates the birth of Bitcoin and even the widespread use of smartphones.

Historical performance comparisons further illustrate the technological stagnation of the Base network. Back in the 1990s, online banking could only be done through computer web pages, with users having to manually check the HTTPS encryption indicator before entering passwords, representing very outdated technology. Reports from 2001 detail eBay's system failures in the late 1990s, highlighting the challenges of that era.

While we do not minimize the challenges of system operation and maintenance, the technical limitations experienced in the 1990s were significant; digital camera images could only be read through serial ports, and when working with medical imaging, a computer worth as much as a luxury car could not load dozens of 16-megapixel black-and-white images at once. Yet today, even the cheapest Samsung phones can easily store and smoothly open image files several times larger than that.

This does not mean Base has overcome old technical problems; rather, if achieving the performance of traditional 1990s servers in a permissionless, globally distributed decentralized network is extremely difficult or even impossible, Base is not even trying in that direction. Today's Base is just an inefficient, unstable, and poor-user-experience distributed database, while similar database technologies were fully mature decades ago.

Coinbase has grand visions for Base, but the industry's tolerance for such arguments has waned, with the consensus by 2025 that such delays are no longer acceptable.

Employment evidence and legal entity status confirm that Coinbase is the primary operating entity, not Base. You can check Coinbase's official announcement blog, where the job posting section states: "Building the next generation of the Internet is a shared endeavor for everyone. If you're interested in scaling, security protection, or promoting Base's decentralization, feel free to apply for our positions." Clicking the job link redirects to the Greenhouse job platform, where all positions clearly state that the employees belong to Coinbase, either as full-time staff or contractors.

In the comments section of the announcement, Coinbase's full-time employees also uniformly refer to the Base team as 'we.' The user agreement and privacy policy on Base's official website also contain Coinbase's branding everywhere. Coinbase's public narrative is that it acts merely as an incubator, and once the project achieves decentralization, Coinbase does not need to bear any legal responsibilities. But the reality is clear: the entire system is operated by Coinbase's full-time employees.

Moreover, Stage 0 Layer 2 networks do not have decentralization at all, so Base is essentially a business under Coinbase. This is the main reason why this article consistently names Coinbase as the controlling entity rather than Base, as the facts support this conclusion unequivocally.

Regulatory timelines and compliance violations present a critical risk for Coinbase, given its status as a listed company on the U.S. stock market. Coinbase holds financial licenses in multiple countries and is legally prohibited from operating a money transfer platform that requires no customer identity verification or is not subject to custody regulation. This is not only a mandatory requirement attached to various licenses but also a law applicable to all market participants. It is reasonable for regulators to be moderately tolerant in the early stages of new projects, as software development inherently has flaws and user asset security needs time to mature.

However, no reasonable view would suggest that 40 months with no progress in decentralization entitles one to unlimited leniency from regulators. From February 2023 to August 2026, Base's decentralization rating remained at Stage 0, with no positive breakthroughs. The development team did complete basic tasks such as coding and launching the platform, and a large amount of user assets were transferred, technically "doing work." But the so-called achievements are merely the team's continuous marketing promotions.

No substantive results have been achieved in terms of the core goal of decentralization. Even if Base adds more features and more complex underlying mechanisms, it does not matter. The evaluation criterion is never whether engineers find development interesting or whether they complete basic development work. The core criterion is whether this system can provide legal and practically valuable services that match Coinbase's publicly announced project plans.

The integrity issues and potential regulatory consequences for Coinbase are severe if the company is found to have deliberately concealed its technical shortcomings. If Coinbase never had a solid decentralized implementation plan from the start and only promoted vague "conceptual ideas," it would pose serious integrity issues regarding shareholder rights and financial regulatory rules. Years of progress-free development are less about industry construction and more about deliberately exhausting regulatory tolerance.

Based on the current situation, Coinbase's actions are essentially an attempt to portray "we still haven't found a compliant way to achieve decentralization" as "we're overcoming major industry challenges and deserve permanent exemption from regulatory constraints." This argument has been widely questioned for years and is now riddled with flaws. Companies should indeed have some room for trial and error in innovation, and we do not expect all project plans of listed companies to be perfectly executed flawlessly.

But continuous failure to meet plans for years, coupled with an operating model suspected of conducting unlicensed asset custody and transfer services, inevitably leads to corresponding legal consequences. Otherwise, financial regulatory rules will lose all their binding force, and the distinction between a legitimate innovation and a regulatory violation will cease to exist.