Base Developer Dismisses Claims of Coinbase Selling ETH Collected from Sequencer Fees

A Base team member has pushed back against accusations that Coinbase, which serves as the blockchain’s exclusive sequencer, has been offloading ether (ETH) earned from transaction fees.

Kabir.base.eth, a Base contributor, clarified in an X post on Sunday that Coinbase has actually accumulated over $300 million in ETH—more than twice the total ETH generated by Base since its inception.

“Both Coinbase and Base maintain significant ETH reserves, with transparent holdings exceeding 100,000 ETH ($300M+),” he stated.

Kabir explained that Base’s operational model involves moving ETH to Coinbase wallets for security and accounting purposes, but emphasized that these transactions do not indicate sales. He also noted that Base prioritizes using ETH for transaction fees, ecosystem incentives, and Layer 1 costs. CoinDesk has reached out to Coinbase for additional comment.

The response follows claims from pseudonymous user Santisa, who alleged that Base had funneled all sequencer earnings to Coinbase, implying a potential liquidation.

As Base’s sole sequencer, Coinbase processes transactions and collects ETH as fees, a model that has sparked debate about the role of centralized actors in Ethereum’s broader ecosystem.

Critics like Sonic Labs founder Andre Cronje have argued that Layer 2 networks—many of which retain or sell ETH rather than fully redistributing it to Ethereum’s mainnet—are contributing to Ethereum’s current inflationary state.

“L2s are the reason Ethereum has turned inflationary again,” Cronje wrote on X, urging networks like Base to explore alternative scaling solutions that would increase Ethereum’s throughput without compromising its deflationary mechanics.