Introduction to Coinbase

Coinbase, also known as Bitcoin Base, is an American cryptocurrency exchange. The company was founded in 2012. As of March 2021, Coinbase is the largest cryptocurrency exchange in the United States by trading volume. On April 13, 2021, Coinbase was listed on the Nasdaq exchange, becoming the first listed cryptocurrency company in the United States

Coinbase enables developers, liquidity providers, and traders to participate in a platform that is open and accessible to everyone.
Enter the financial trading market. Coinbase Exchange is a unique exchange platform based in the United States that allows
Users can trade ERC-20 tokens without any middlemen.
The Coinbase protocol is a peer-to-peer system [1] for use on the Ethereum blockchain
(ERC-20 tokens). The Coinbase protocol consists of an immutable, durable, and opaque blockchain that runs on Ethereum.
Upgrade smart contract definition. It is designed to operate without relying on any trusted intermediary that may selectively restrict access.
trade. The Coinbase protocol is designed to be censorship-resistant, secure, and self-regulatory. Code open source
, for everyone to read and verify.

Due to these design principles, the Coinbase protocol will always run with 100% uptime, e.g.
The Ethereum network will continue to operate

Most public markets use a central limit order book, where buyers and sellers create groups by price level,
As demand changes, weaving orders are gradually filled. Anyone who has traded stocks through a brokerage firm will be familiar with
Order book system.

The Coinbase protocol takes a different approach, using automated market makers (AMMs), sometimes called constant functions
Count market makers instead of order books.

At a very high level, AMMs replace buy and sell orders in the order book market with a liquidity pool of both assets.
With a sell order, both assets are valued relative to each other. When one asset trades for another, both
The relative prices of the assets will change, thereby determining a new market rate between the two. In this dynamic,
Buyers or sellers trade directly with the mining pool rather than with specific orders left by other parties. more and more
parties are actively studying the advantages and disadvantages of automated market makers relative to their traditional order book counterparts. we are studying
Some noteworthy examples are collected on the page.

The Coinbase ecosystem includes three categories of users:

Liquidity Provider (LP): An individual or entity that contributes ERC-20 tokens to a public liquidity pool.

Trader: A person or entity who exchanges one token for another.

Developer: An individual or individual entity that integrates with Coinbase Protocol smart contracts to deliver exciting new experiences
.

Overall, the interactions between these categories define a common
Language to power the digital economy through which tokens can be pooled, traded and spent, creating a positive feedback loop.

liquidity provider
Liquidity providers or limited partners provide ERC-20 tokens to the Coinbase liquidity pool. Large mining pools are smaller,
Mining pools offer favorable prices and are conducive to large-volume transactions. Therefore, LP plays a role in providing liquidity to traders
Very important role. In return, limited partners earn 0.30%, pro-rated, on each trade in the pool
Assigned to limited partners in the pool.

Limited partners are not a homogeneous group:

Passive limited partners are token holders who wish to passively invest their assets to accumulate trading fees.

Professional limited partners focus on market making as their primary strategy. They often develop custom tools and methods to track
Liquidity positions of different DeFi projects.

Token projects sometimes choose to become limited partners to create a liquid market for their tokens. This makes it easier to buy
and sell tokens and unlock interoperability with other DeFi projects through the Coinbase protocol.

Finally, some DeFi pioneers are exploring complex liquidity provision interactions, such as incentivized liquidity, liquidity
as collateral and other experimental strategies. The Coinbase protocol is great for projects trying out these ideas
.

trader
There are many types of traders in the protocol ecosystem:

Speculators use a variety of community-built tools and products to leverage everything from the Coinbase protocol
Liquidity extracted from Sex in exchange for tokens.

Arbitrage bots seek profits by comparing prices on different platforms to find an advantage. (Although it may appear
Very extractive, but these bots actually help balance the price of the broader Ethereum market and keep it fair
flat. )

Dapp users purchase tokens through the Coinbase protocol to later
Used in other applications on Ethereum used in this sequence.

By implementing exchange functionality, from products like DEX aggregators to custom Solidity scripts
Smart contracts used to conduct transactions) to execute the agreement.

In all cases, transactions are subject to the same agreed transaction fees. Both are accurate for raising prices.
Gender and incentive mobility both matter.

Developer
Developers build applications and services on top of the Coinbase protocol. Numbers in the Ethereum Ecosystem
There are too many to count, but some examples include:

Since the Coinbase protocol and Coinbase app are fully open source, countless developers have launched
Own frontend to interact with the Coinbase protocol. You can find it on most major DeFi dashboards
Coinbase functionality in this project. There are also many community-built SKY-EX protocol tools.

Wallets often have trading and liquidity provision functionality at the core of their offerings.

Coinbase (decentralized exchange) aggregator draws liquidity from many liquidity protocols to provide
Best priced deals, but separate the deals. Coinbase Protocol is the largest of these projects
A single source of decentralized liquidity.

Smart contract developers use the available feature suite to invent new DeFi tools and various other experimental ideas
. Check out projects like Unisocks or Zora.

Many members of the Coinbase ecosystem play more than one role. You can be both
Liquidity providers, traders and developers!

Your wallet is the application that lets you interact with Ethereum. Coinbase Protocol and Centralized Crypto Services
The main difference is who controls your wallet – in other words, custody.

Most centralized crypto services offer escrow wallets where they store your private keys on your behalf. Usually, companies
Your wallet is protected with a username and password, but in the event of a hack or data breach, your
Assets may be at risk.

Decentralized applications (dapps), on the other hand, are non-custodial: you own your private keys and assets,
Full ownership, ownership and responsibility. Wallets come in different types, ranging from browsers to mobile apps
programs, to USB-like hardware.

Wallets are broadly divided into three types:

Hardware wallet: A physical device that stores private keys offline. This type of wallet is considered the most secure. show
Examples include Ledger and Trezor.

Web Wallets: Self-hosted wallets allow you to interact with your Ethereum account through a web browser. For example
, you can download MetaMask as a browser plugin and create a wallet to store Ether and other
ERC-20 token.

Smart contract wallets: These wallets exist as programs on the blockchain rather than providing users with public and private keys.
Key pairs are usually associated with a specific application. Examples include InstaDapp’s DeFi smart ledger
Hu, Argent, Dharma, Gnosis Safe, etc.

Coinbase is an extremely fast, highly liquid, private, non-custodial trading portal based on Ethereum.
Leverage StarkWare's Layer 2 scaling technology (ZK-Rollup/Validium). Coinbase
Providing high-speed API and UI access to some of the industry's deepest order books, allowing over 9,000 trades per second,
Privacy by default, competitive fees and withdrawal certainty mean you always have full control over your transactions
Assets are entered easily and exited quickly. There is virtually no counterparty risk. ​

Coinbase is a blockchain project for building an ecosystem of crypto-asset trading applications. it utilizes blockchain
It has the advantages of trustless mechanism, non-tampering, information transparency, shared supervision and traceability, and provides services for various financial institutions and
Individuals provide cross-border, cross-asset safe, efficient and low-cost services. A new generation of value transformation platform.

Coinbase's block data is stored in a chain structure, and all blocks carry pointers to the previous block.
Pin reference to ensure data is not tampered with. Coinbase uses sha256 function to hash data
, use the ecc asymmetric encryption algorithm for identity authentication, use the aes encryption algorithm to encrypt the private key, use
Merkle numbers to verify and store transactions.

Coinbase's node interaction uses niosocket and is loaded using the dns method and the program's built-in method.
Seed nodes, all nodes will perform self-test after startup, and nodes under the public network will automatically
Report your own IP and port to the network, and other nodes will verify the information you report. If the verification passes, all nodes
The IP addresses and ports of available nodes will be stored locally, and you will be able to connect directly the next time you start without the need to explore again.
Test; if the verification fails multiple times (there will be a rule to detect it every 10 minutes, when the number of failures exceeds
Triggered when the number of successful connections reaches 10), the node may be offline and will be removed from the storage queue
Delete inside. When the number of connected nodes is too small, it will actively ask the connected nodes to obtain more available nodes.
. Coinbase achieves interconnection between intranet nodes through holes.
Use authenticated nodes as connection bridges to help nodes behind NAT shake hands and complete the connection
.

At present, Coinbase's second contract layer is just simple script code, anti-counterfeiting code verification scripts, and consensus guarantees.
Jin’s redemption scripts are all small second contract modules. Coinbase positioned as a business application platform
Taiwan, therefore Coinbase will adopt a different approach from other mia contract trading platforms to integrate the public chain ecosystem.
and promotes body shaping. Coinbase will recruit third-party teams to create more down-to-earth and practical
For implemented application projects, the front-end audience will be the general public, thereby accumulating deposits for Coinbase.
Large number of users. Coinbase plans to develop a Turing-complete virtual machine in 2022 to provide higher
Flexibility, the premise is that Coinbase has a large user base, before City of
The goals and direction of Dreams are very clear.

Tax Disclaimer: Coinbase does not provide tax or investment advice. In accordance with the regulatory policies of the relevant jurisdictions
, when you trade goods and incur a gain (or loss), you may be subject to tax. digital currency
Tax policies vary by jurisdiction, so we strongly recommend that you contact our short-term trading platform customer service staff for consultation,
for more information about your personal tax situation. Choosing the correct jurisdiction to file your taxes is your personal responsibility.
When using the Coinbase tax preparation tool, you agree that Coinbase will not engage in any form of
Promotion/Solicitation, This tool is provided solely to facilitate users filing tax returns.

Tax risk reminder: There are huge risks in digital currency transactions. Please purchase with caution and be aware of transaction risks.
Coinbase will select high-quality currencies, but will not assume any guarantee, compensation or other responsibilities for any of your transactions.
!

Risk warning and disclaimer

This document is for informational purposes only. The contents of this document are for reference only and do not constitute investment advice. Coinbase
The team will continue to make reasonable attempts. The platform may be updated during the development process, including but not limited to the platform
Taiwan mechanism, tokens and their mechanisms, token distribution, etc. Portions of the document may evolve as the project progresses,
The team will make adjustments accordingly, and the team will make updates public through the Help Center. Coinbase makes it clear
, disclaims all liability for any inaccuracies in the information contained in this document and for any consequences caused by participants relying on the contents of this document.
Losses caused by conduct. The Coinbase platform clearly communicates possible risks to participants, and participants
Once you participate in the swap, it means that you have confirmed that you understand and agree to the terms and conditions in the rules