Coinbase-Backed Base Acquires Iron Fish Team to Boost Blockchain Privacy

Base, the Layer 2 network backed by Coinbase, has acquired the development team behind Iron Fish, a blockchain project focused on privacy.

The move aims to enhance privacy features on Base by leveraging the expertise of Iron Fish’s developers, the project said in a post on X.

Iron Fish is a proof-of-work blockchain that enables private transactions using zero-knowledge proofs (zk-SNARKs).

Base Acquisition Excludes Iron Fish Blockchain and Native Token

However, the acquisition does not include the Iron Fish blockchain or its native token.

Base clarified that the project will remain independent and unaffiliated with Coinbase.

Instead, the integration will focus on developing “privacy-preserving primitives” for Base’s ecosystem.

Iron Fish confirmed the transition in a post on X, stating that it is joining Base to help scale privacy solutions.

“For six years, we’ve been building cutting-edge privacy tech — and we’re about to take the next step in expanding our mission to make privacy the standard in crypto, not the exception,” the project said.

The project’s founder, Elena Nadolinski, will continue to serve on Iron Fish’s foundation board, ensuring the blockchain maintains its governance structure.

🚨 Privacy is about to go mainstream. 😎

The @ironfishcrypto team is joining @base to scale privacy for millions of users, while the Iron Fish Foundation will continue independently to support the Iron Fish network in its mission to be the largest safe cross-chain privacy… pic.twitter.com/wbk1mKUTZZ

— Iron Fish (@ironfishcrypto) March 6, 2025

Despite launching its mainnet in 2023, Iron Fish struggled to gain widespread adoption.

The project previously secured $28 million in a 2021 funding round led by Andreessen Horowitz.

Following the announcement of the team’s move to Base, Iron Fish’s native token (IRON) saw a sharp price increase of nearly 30%.

Base Under Fire for Sequencer Fee Transfers to Coinbase

Last month, Base faced scrutiny after Santisa, the CIO of Lucidity Cap, revealed that all sequencer fees have been funneled to Coinbase since the network’s inception.

Analysts, including Sonic The Assistant, noted that Base’s sequencer operations generate a nearly 90% profit margin, exceeding $100 million, with all related ETH being transferred to Coinbase via Ethereum.

The lack of transparency has raised concerns about whether the funds were liquidated rather than reinvested into Base.

Further speculation emerged from Coinbase’s financial reports, which showed minimal changes in its ETH holdings before and after Base’s launch.

Despite Base’s significant revenue, Coinbase’s ETH reserves increased by only 772 ETH ($2 million) between June 2023 and Q4 2024.

A recent transaction involving 240 ETH moving off-chain to Coinbase further fueled questions about the fate of the remaining $100 million in sequencer fees.

Andre Cronje, co-founder of Sonic Labs, criticized Base’s approach, questioning whether it aligns with Ethereum’s decentralized ethos or operates as a corporate blockchain under Coinbase.

Which is then? Are you the corpo centralized private blockchain of coinbase or the ethereum aligned L2. Why not stage 1 yet? Why not keep the fees onchain? If its only to be held for the benefit of Base, surely keeping it on the chain you expect others to trust is an absolute…

— Andre Cronje (@AndreCronjeTech) February 9, 2025

In response, Base executive Sadarangani defended the network’s practices, asserting that earnings are reinvested into the Ethereum ecosystem rather than liquidated.

He emphasized Coinbase and Base’s substantial ETH holdings, claiming they surpass any Layer-2 DAO.

Additionally, Base cited off-chain custody at Coinbase as a security measure, with plans to increase on-chain transparency and transition more costs to be covered in ETH.