A member of the layer 2 scaling solution, Base, has denied rumors regarding its sequencer, Coinbase, supposedly selling ether (ETH).

“Coinbase has accumulated over $300M in ETH, which is more than double all of Base’s ETH earnings over time.” – Base member Kabir.base.eth said on X.

Kabir further stated that Base and Coinbase have maintained their ETH holdings, publicly disclosing their long-term amounts (over 100K ETH, valued at over $300M).

He clarified that Base utilizes offchain custody for security and audits, explaining that transferring funds to Coinbase is standard practice.

Rumors had suggested that Base was using all sequencer fees collected and transferring them to Coinbase. Such allegations arise from the fact that Coinbase is the only node sequencer, managing the order and execution of transactions, for which it charges a fee collectible in ETH.

“Layer 2s contribute to Ethereum’s inflationary pressures,” explained Andre Cronje, emphasizing the need for alterations in the layer 2 structures to better align incentives with Ethereum’s broader principles.