Coinbase Open Sources Technical Standard to Streamline Token Listings
Coinbase published an open-source technical standard designed to streamline its token listing process by making it easy for blockchains to share important data with the exchange's platform.
Crypto exchange Coinbase is hoping to streamline how it adds new tokens to its platform.
The San Francisco-based exchange rolled out a new open-source technical framework for asset listings Wednesday, making it easier for the company to integrate tokens it wants to add by giving developers a blueprint for what their projects need to provide.
Dubbed Rosetta, the release began as a project aimed at helping Coinbase more quickly add assets to its platform, product manager Nemil Dalal told CoinDesk.
“Each blockchain has a node software. They're all custom and they all have different APIs that you use, and so integration to them can often be very customized, [require] a lot of manual effort,” he said. “So what Coinbase built was some type of middleware that we use to be able to integrate with these blockchains.”
The team is now open sourcing this technical framework for projects hoping to list their tokens on the exchange.
“The goal is to dramatically decrease the time it takes to bring a blockchain onto Coinbase,” he said.
To be clear, this framework is only applicable to blockchains that have never been integrated with Coinbase. Dalal said tokens that, for example, were built on the ERC-20 standard on Ethereum would not benefit from the project – since Coinbase has already onboarded Ethereum and ERC20 tokens, it already has the technical infrastructure to support new tokens.
Nor does the framework let new projects bypass Coinbase’s other non-technical requirements for listing, which include security and legal reviews, among other factors.
“None of that changes because those are our requirements based on our regulatory relationships, compliance relationships,” Dalal said.
Middleman
Rosetta, which Coinbase began working on five or six months ago, is “middleware,” meaning it is a piece of software that sits between Coinbase’s own systems and the blockchain it’s working with. When implemented, its API will query the blockchain in question, checking on, for example, the number of tokens in a block.
Dalal said knowing the balance for a given address with a block height is one of Coinbase’s requirements for security purposes. If a customer wants to withdraw some funds, the exchange needs to know exactly how many tokens it has and which block they’re from.
Jai Prasad, a product manager at Coinbase, told CoinDesk that this also necessary for the customer experience.
“If you want to look up your balance on Coinbase’s app … the node API should return [your] balance at this block is 100 bitcoin,” he said. “Some nodes don’t do that, so nodes don’t give you the block number. You could look up your balance and it could show you a wrong balance, it could show 99 bitcoin but actually at this block it’s 100, so it’s pretty important for users and this is a design decision we’ve learned our users want.”
Until this point, blockchains being onboarded to the Coinbase platform had to implement these types of features manually, which meant it could take months between the exchange approving a token listing and actually listing it. In theory, the amount of time can be reduced to just minutes or days.
“Coinbase’s team created this tooling that you are able to basically sync the whole blockchain and verify that every operation you are reporting is actually there and it's consistent, which are kind of really important things when you want to [list something] on a custodian solution,” said Mariano Cortesi, an engineer with Celo, one of the teams which tested Rosetta.
He said the challenge for his team was ensuring that the important details Coinbase requires were all recorded, including when a balance changed.
Wider adoption
While Rosetta's primary aim is to help Coinbase more easily onboard tokens to its own platform, Dalal said it can potentially see adoption beyond just this one use case.
If other exchanges and platforms start adopting and contributing to Rosetta’s code, it could theoretically unite the broader crypto ecosystem, he said.
“One thing that blockchains have come to us with is, ‘Look we have to talk to so many different exchanges, and they all have custom integration requirements,’” he said. “The power of something like this is that it makes it easier for us to talk to a bunch of different exchanges.”
Widespread adoption of Rosetta could spur interoperability, allowing devs to build similar tools that work across different blockchains.
This could extend to block explorers, Dalal said.
“Obviously there's very few asset-agnostic block explorers, ones that work across different blockchains,” he said.
Now, Coinbase is putting Rosetta out to the broader community under an Apache license in the hopes that other exchanges will “kick the tires on it.”
“All the code is available, it can be forked, it can be edited, so if there’s another exchange or another project that wants to put their code on it they can do that and also suggest their own changes,” Dalal said. “In a perfect world there are people building on top.”
A handful of projects have already begun testing the new tools, including Filecoin, Celo, Near, Oasis, Coda, Ontology, Kadena, Handshake, Blockstack and Sia, Coinbase said in a blog post Wednesday.
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Kadena co-founder Will Martino said Rosetta was flexible enough for his multichain network (Kadena uses sharded chains to boost scalability) to integrate, despite the Kadena protocol’s unique features.
“This levels the playing field for projects and modernizes the exchange industry. Large, traditional, ‘old boys’ club’ VCs will likely look unfavorably upon Rosetta because it diminishes their perceived importance with listings while simultaneously maximizing the value of a project’s technical capabilities,” he said in an emailed statement.