Base Representative Dismisses Claims of Coinbase’s Sequencer Selling Ethereum

Base Team Member Rejects Allegations of Coinbase Offloading ETH

A Base team member has pushed back against claims that Coinbase, which operates as Base’s sole sequencer, has been selling ether (ETH) collected from network fees.

“Coinbase has accumulated over $300 million in ETH—more than twice the total ETH earned by Base since launch,” said Base contributor Kabir.base.eth in an X post on Sunday. “Both Base and Coinbase maintain substantial ETH holdings, transparently reporting reserves exceeding 100,000 ETH ($300M+).”

Kabir explained that for security and auditing reasons, Base utilizes off-chain custody, leading to ETH movements to Coinbase wallets. He also noted that Base aims to conduct transactions in ETH as much as possible, using the asset for Layer 1 gas fees and ecosystem grants. CoinDesk has contacted Coinbase for further clarification.

The response comes after pseudonymous user Santisa claimed that Base had transferred all sequencer earnings to Coinbase, implying that the funds were likely liquidated.

As the exclusive sequencer for Base, Coinbase processes and finalizes transactions, collecting ETH fees in return for providing these services.

Santisa’s comments mirror concerns previously raised by Sonic Labs founder Andre Cronje, who has warned that centralized sequencers on Layer 2 networks could create financial models that conflict with Ethereum’s broader decentralized vision.

Layer 2 networks like Base generate significant revenue from transaction fees but only allocate a portion of these earnings to Ethereum’s mainnet for security and data availability. This dynamic means that a large share of the ETH collected from users remains within the Layer 2 ecosystem or is sold, reducing the overall amount of ETH burned on the mainnet.

“L2s are the reason Ethereum has turned inflationary again. We need to SCALE ETHEREUM. They can integrate Sonic’s tech for free—zero cost. It would increase their throughput 1000x,” Cronje wrote on X.