#GENIUSActPass Every Fintech Firm Will Run Its Own Blockchain `in Next Five Years:' Optimism

The logic behind this assertion is straightforward and simple, says OP Labs head of product Sam McIngvale.

What to know:

The runaway success of Coinbase’s layer-2 network, Base, has prompted many other firms to follow suit, OP Labs' Sam McIngvale said.

Layer 2s allows companies to attract customers and generate revenue, he said.

Rather than paying to hold crypto in dormant custody, L2 chains make it easy to lend and borrow.

It’s only a matter of time until every cryptocurrency exchange and fintech firm is running its own blockchain, according to OP Labs, builder of Ethereum overlay protocol Optimism.

The logic is straightforward and simple, says OP Labs head of product, Sam McIngvale, pointing to the runaway success of Coinbase’s layer-2 (L2) network Base since its debut in 2023.

For a start, Base has accrued an incredible ecosystem of users and developers to back the exchange, McIngvale said. But the biggest no-brainer is how a system like Base, combined with Coinbase’s bitcoin-backed loans, allows dormant crypto assets sitting in custody to be monetized by lending them out, he added.

Base was built using Optimism's OP Stack, a software product that helps users to develop layer-2 blockchains that work with Ethereum but provide faster, cheaper transactions. McIngvale said Base's success, it's the largest layer 2 by a number of metrics including total value locked, is an illustration of how the industry is likely to develop.

“I expect every crypto exchange and every fintech company to run their own blockchain in the next five years,” McIngvale said in an interview. “If you own bitcoin on Coinbase, in one button, they will take that bitcoin, move it to Base, which then lets you borrow USDC from it. And now you can go do whatever you want with that USDC