Base Revenue Falls as Coinbase Sets Sub-Cent Fee Focus

Coinbase's second-quarter earnings report revealed that revenue from its Base Layer 2 network declined despite a significant increase in stablecoin transaction volume.

The exchange processed around $32 trillion in stablecoin transfer volume over the last 12 months, making it the number one chain for this type of transaction. However, despite this growth, sequencer revenue from Base fell to $47.4 million, down 11% quarter-over-quarter and a significant drop from the $68 million reported in Q3 2022.

Coinbase CEO Brian Armstrong attributed the decline in Base revenue to the company's deliberate strategy of prioritizing sub-cent fees over scale. The exchange has stated that it aims to provide sub-cent, sub-one-second settlement times as a key product goal.

Meanwhile, stablecoin revenue reached $292.1 million, but this was not enough to lift Coinbase's overall results above analyst expectations. The company reported a net loss of $359.5 million for the quarter and saw its stock price fall around 5% in after-hours trading.