Base Accused of Selling ETH: Putting Profit Above Ethereum Growth?

The Layer 2 Base network, built by Coinbase, is facing criticism for how it manages transaction fees. Specifically, Base allegedly transferred the entire sequencer fee (the fee users pay nodes on Base to process transactions) directly to parent company Coinbase instead of using the money to enhance security for the Ethereum network.

The cause of this controversy stems from the statements of Andre Cronje, the founder of the Sonic project (Fantom). Cronje has publicly criticized Base, claiming that the network collected $120 million in fees but spent only $10 million on Ethereum for security.

Cronje argues that this action goes against the common commitment of layer 2, which was built to expand Ethereum and strengthen ETH's position. According to him, Base is withdrawing liquidity from the traditional financial system, leveraging Ethereum to make profits for companies and their stocks instead of reinvesting in the ecosystem.

The conflict escalated when Steven Goldfeder, founder of Offchain Labs (Arbitrum), joined the debate. Steven claimed that Arbitrum collected 20,000 ETH from the transaction fee but had never sold any coins.

Instead, all of this ETH is used for network authentication and security, and is committed to continue to be used to develop the Arbitrum ecosystem, in line with Ethereum's overall strategy.

Prior to the allegations, Kabir Sadarangani, a member of Base, was voicing network protection, asserting that the transfer of fees to the Coinbase exchange is for security and audit purposes, completely unrelated to pocketing profits.

He further explained that Coinbase is a public company, the transfer of ETH to the public is intended to serve auditing and financial transparency with shareholders, and stressed that Base is only one of Coinbase's many products.

Sadarangani also confirmed that Base and Coinbase now hold more than 100 million ETH (over $300 million), the largest amount of ETH that any traditional company owns, even larger than all other layer 2 projects.

He argues that Base is driving Ethereum's growth more than any other project. ETH is used by Base to pay layer 1 gas fees, fund external projects, and only a small portion of ETH is converted into USD to pay staff salaries.

In the end, Coinbase confirmed its goal was to bring billions of users on-chain and urged layer 2 teams to work together to develop Ethereum, rather than attack each other.

Although Base has spoken out in the main voice, the community has not stopped expressing skepticism. Many users require Base to publicly disclose evidence of the amount of ETH reserves and on-chain assets to demonstrate transparency. The community wants Base to provide realistic, detailed, and transparent statistics on this issue.