Upbit, South Korea’s largest exchange by volume, has announced plans to launch its own Ethereum Layer 2 network called GIWA. This move comes as part of a broader infrastructure push, following trademark filings that hinted at the project a month ago.
During a keynote speech at the Upbit Developer Conference, Dunamu CEO Oh Kyung-seok shared details of the project, emphasizing South Korea’s potential to compete globally in the financial infrastructure race. He highlighted recent developments in the industry, such as the approval of the first U.S. Bitcoin ETF and the enactment of stablecoin legislation, as signs that digital assets are here to stay.
Despite advancements in blockchain technology in other markets like the U.S. and Singapore, the Korean market has been relatively quiet. A spokesperson for Dunamu expressed hope that GIWA would encourage domestic developers to create innovative blockchain services, enter the Web3 ecosystem, and avoid being left behind in the global market.
GIWA will be decentralized in phases, with plans for stablecoin integration subject to pending Korean regulations. The network aims to offer scalability through Optimistic Rollups, privacy features, and a mobile wallet for assets, NFTs, and dApps. A testnet for the layer-2 chain, named Sepolia, is currently operational.
Rei Nam, the chief technology officer at Dunamu’s blockchain technology arm Lambda256, emphasized the importance of GIWA in expanding opportunities for both Korean and global builders. The project has received support from the team since its inception, with a focus on fostering new services and ideas within the ecosystem.
GIWA is based on Optimism’s OP Stack and boasts a public testnet with one-second block times. A dedicated GIWA Wallet application is in the works, as outlined in the official documentation.
However, concerns have been raised about centralization within the network. Similar to Coinbase’s Base, GIWA is expected to start with a single sequencer under operator control, potentially giving exchanges significant influence over transaction ordering and MEV capture. This model has prompted discussions about the regulatory implications of exchange-operated Layer 2 networks in Asia.
Despite these challenges, industry analysts believe that Upbit’s decision to launch GIWA could serve as a diversification strategy amidst declining domestic volumes and increasing competition. By leveraging its massive user base and liquidity, Upbit aims to drive growth and innovation within the crypto space.
In conclusion, Upbit’s foray into the Ethereum Layer 2 space with GIWA represents a significant step towards establishing itself as a key player in the global financial infrastructure race. With a focus on decentralization, scalability, and user experience, the project holds promise for both domestic and international markets.