Base Activates Cobalt Upgrade to Enhance Financial Grade Capabilities

The Base network has completed its Cobalt upgrade, which introduces new features to make it more suitable for traditional financial institutions and sophisticated trading strategies. The upgrade went live on September 30 and is part of a strategic pivot toward onchain finance.

Base developed the Cobalt upgrade under the leadership of Coinbase, with the goal of enhancing the functionality of its native token standard, B20, while introducing a new transaction mechanism called Validity Transactions. This dual-pronged update targets both issuers of tokenized assets and traders who interact with them.

The core of the Cobalt upgrade is an expansion of the B20 standard, which now allows issuers to layer multiple compliance and administrative rules onto a single tokenized asset. Issuers can configure rules that require recipients to complete identity verification, qualify as accredited investors, or be screened against sanctions lists before a transfer is processed.

The network has also introduced Composite Policies, which allow existing rules to be combined using logical operators like AND or OR, creating more nuanced compliance frameworks. This flexibility mirrors the complex regulatory requirements found in traditional securities markets.