Base L2 Under Fire for Sending ETH Fees to Coinbase

Base L2 Under Fire for Sending ETH Fees to Coinbase

Ethereum Layer 2 network Base, incubated by Coinbase, is under fire for transferring all sequencer fees directly to its parent company. Critics argue that instead of using the funds to strengthen Ethereum’s security, Base has prioritized Coinbase’s profits.

Andre Cronje, founder of Sonic, highlighted that Base collected $120 million in fees but only paid $10 million to Ethereum for security. “L2s are why Ethereum is inflationary again,” Cronje posted, arguing that Layer 2s retain or sell most of their ETH instead of burning it.

Base contributor Kabir Sadarangani defended the transfers, stating they were for “security and auditing purposes” rather than liquidations. He also claimed that Base and Coinbase collectively hold over $300 million in ETH and remain committed to Ethereum’s growth.

Sadarangani added that Base covers Ethereum Layer 1 costs, distributes grants in ETH, and is working to move more operations onchain. Despite these assurances, the controversy highlights ongoing concerns about the balance between Layer 2 profitability and Ethereum’s long-term sustainability.

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Man Wants to Buy Landfill to Recover $784M in Lost Bitcoin

James Howells, a British computer engineer, is in talks with investors to buy the Newport landfill where he believes his hard drive containing 8,000 Bitcoin, now worth $784 million, was mistakenly discarded in 2013. After years of failed legal battles, including a recent UK court ruling dismissing his lawsuit, Howells now sees outright ownership of the site as his best chance to recover the drive.

The landfill is scheduled to close by 2026, with plans for a solar farm, but Howells argues a targeted excavation using AI scanning and industrial robots could retrieve the hard drive safely. “I have discussed this option recently with investment partners, and it is very much on the table,” he told the BBC, emphasizing his confidence in modern technology to recover his lost Bitcoin fortune.

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Strategy Resumes Bitcoin Buying and Adds 7,633 BTC

Strategy, formerly MicroStrategy, has resumed its Bitcoin acquisitions, purchasing 7,633 BTC for $742.4 million at an average price of $97,255 per coin between February 3 and February 9. This latest acquisition brings its total Bitcoin holdings to 478,740 BTC, worth over $46 billion, reinforcing its dominance as the largest corporate Bitcoin holder.

The purchase follows a temporary pause as Strategy raised funds through stock sales, part of its aggressive “21/21 Plan” targeting $42 billion in capital for Bitcoin acquisitions. “Death to the blue lines, long live the green dots,” Executive Chairman Michael Saylor posted on X, signaling that further large-scale Bitcoin purchases are imminent.

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CZ Calls Binance’s Token Listing Process "Broken"

Changpeng Zhao, founder and former CEO of Binance, criticized the exchange’s token listing process, calling it “a bit broken” due to its short four-hour gap between announcement and trading. He noted that this timeline fuels speculative trading on decentralized exchanges before tokens go live on Binance, causing price distortions and potential losses for retail investors.

Zhao’s comments followed the listing of TST, a meme coin that surged in popularity after appearing in a BNB Chain tutorial, despite him denying any endorsement. “Why did TST get listed on Binance? I don’t know for sure. I am entirely NOT involved in their listing process,” he wrote, adding that he has never personally invested in meme coins, NFTs, or most altcoins.

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Data of the Day

Hedge funds have aggressively increased their short positions on Ethereum, with bets against ETH soaring 500% since the US presidential election, according to the Kobeissi Letter.

This bearish positioning has contributed to Ethereum’s 5.9% annual price increase, vastly underperforming Bitcoin’s 104% surge over the same period. Analysts suggest Ethereum’s struggles stem from growing competition among L1 chains, which has diluted capital inflows into ETH.

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More Breaking News

• A hacker has pleaded guilty to the SEC social media breach, which was used to post a fake Bitcoin ETF approval announcement that briefly pumped Bitcoin's price.
• Polymarket bettors placed $1.1 billion on Super Bowl outcomes, surpassing U.S. election betting volume despite ongoing regulatory scrutiny.
• Kraken has listed the ‘JAILSTOOL’ memecoin, a token promoted by Barstool’s Dave Portnoy, which surged past $250 million before retracing to $150 million.
• Circle’s USDC stablecoin has regained its losses from the bear market, hitting a $56.3 billion market cap as its adoption expands across Solana and Aptos.
• AI agent tokens have crashed 50% in recent weeks, with some projects nearing zero as traders pivot away from early hype toward sustainable growth.
• Tesla's Q4 Bitcoin profit of $600m has sparked discussions on BTC as collateral, with executives suggesting companies could leverage holdings for liquidity.

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