A member of the Base team, Kabir.base.eth, has dismissed rumors that Coinbase, which serves as the sequencer, has liquidated ether (ETH). He stated on social media that Coinbase holds more than $300 million in ETH, more than twice the total ETH earnings of Base to date. Kabir emphasized that both Base and Coinbase maintain long-term holdings of ETH and use off-chain custody for security purposes. The rumors emerged due to perceptions that Base has been transferring sequencer fees to Coinbase, implying it may have sold ETH. The operational model indicates Coinbase is the sole sequencer for Base, receiving fees in ETH for its service. Concerns have been raised by industry figures like Andre Cronje regarding centralized sequencers in Layer 2 solutions potentially misaligning profit models with Ethereum's foundational values, contributing to ether's inflationary pressure. This situation highlights a dilemma where significant transaction fee revenue collected in ETH does not correlate proportionately with fees sent to the Ethereum mainnet for security, affecting ETH supply dynamics.

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