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‘Flatcoin’ Builders Respond to Coinbase Call to Deploy on Layer-2 Network Base

Coinbase’s announcement specifically called for the development of stablecoins that are not necessarily pegged to the dollar, citing projects such as Olympus DAO, Reflexer, and Frax Finance.

Frax’s FPI stablecoin, for example, is linked to a basket of real-world consumer goods as defined by the Consumer Price Inflation (CPI) average in the United States. This particular design was dubbed a flatcoin by Coinbase.

The FPI token generates returns proportional to the CPI that are equivalent to the 12-month inflation rate in the United States. FPI’s current market capitalization is around $82 million, according to CoinGecko. In the project’s Telegram, Frax Finance founder Sam Kazemain stated that “someone should tell them we’re up for” building the FPI stablecoin on Base.

Similarly, Ameen Soleimani from Reflexer told Decrypt, “Reflexer is open to working with a number of ETH L2s to explore bringing RAI’s technology to new chains, particularly Base.” Reflexer’s RAI is a floating-pegged stablecoin backed by ETH, with a market price determined by RAI and ETH supply and demand, as well as a price stabilization mechanism. The total ETH deposits on Reflexer to mint RAI are estimated to be in the $30 million range.

Furthermore, Olympus DAO, which led the wave of innovative DeFi platforms in the second half of 2021, dubbed DeFi 2.0, is in talks with Coinbase. “We are currently investigating the options and are in contact with the Coinbase team,” Olympus DAO contributor Wartull told Decrypt. They’re a little overwhelmed right now, but we’ll see if it makes sense for us to deploy on Base.”

After the recent fallout of global banks and the depegging of Circle’s USDC, Wartull praised Coinbase for recognizing “the need for an unpegged flatcoin.” “The fact that they recognize Olympus as one of those projects is further validation of this,” they said.

The letter also mentioned social applications to help users build their on-chain reputation and improve crypto security, in addition to inflation-resistant stablecoins.

A Limit Order Book (LOB) exchange was also on the agenda. While AMM-styled exchanges like Uniswap continue to dominate the decentralized market, order-book designs for higher performance and faster execution are likely to emerge.

An order book-styled exchange is designed to mimic the design and performance of centralized exchanges while providing security guarantees.

Following that short list of suggestions, the discussion insisted that developers should not feel pigeon-holed by these suggestions. Coinbase is stepping up its efforts to gain on-chain dominance via its layer-2 blockchain by issuing a call to unconventional application developers.

“Coinbase has unique access to millions of retail users who currently do not have (much) DeFi exposure,” Wartull of Olympus DAO added, “and this could change with the approach Coinbase is taking for their Layer-2.”

 

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