Base activated its Cobalt upgrade on Wednesday, introducing conditional transactions and new issuer controls for tokenized assets as the Coinbase-developed Ethereum layer-2 network deepens its push into onchain finance.

Cobalt, the network's third major upgrade, expands Base's B20 token standard by letting issuers layer multiple compliance checks on a single asset. An issuer could, for instance, require recipients to pass identity checks, qualify as accredited investors and not appear on a sanctions list. Issuers can also schedule adjustments for corporate actions such as stock splits, changing the number of shares displayed in wallets and apps without minting or burning tokens or altering the underlying balance.

The upgrade also allows issuers to grant authorized administrators the power to move tokens from a holder's wallet without the holder's approval and attach a public note to the transfer. According to Base, issuers decide whether to enable the feature and who can use it, and Base itself cannot initiate such transfers. The design departs from conventional permissionless tokens, in which only a holder or an approved address can move funds, and brings onchain assets closer to the transfer-agent and compliance functions that intermediaries perform in traditional securities markets. The company said the changes give issuers the additional compliance and administrative tools needed to bring traditional financial products onchain.

Conditional transaction timing

Cobalt introduces Validity Transactions, which allow users to submit transactions that become eligible for inclusion only when specified onchain conditions are met, giving traders more control over transaction timing. A trader could submit a swap that becomes eligible only if an asset reaches a specified price before a set block deadline. The setup functions similarly to a limit order in traditional markets, where an order rests until its price condition is triggered. Base holds the transaction and evaluates the conditions against the chain's state as each block is built. Transactions submitted through the system can remain private until they are included in a block, Base said.

Sharper focus on tokenized finance

The Cobalt upgrade builds on Base's recent push into tokenized finance, an area that has drawn growing attention across the industry as exchanges and asset managers bring traditional instruments onto public blockchains. On July 8, Base activated B20 as a native token standard for stablecoins, tokenized real-world assets and other fungible tokens, allowing issuers to create assets without building custom token contracts.

The move followed a public course correction. On July 16, Base creator Jesse Pollak said the network had made a "wrong bet" by focusing on creator, content and messaging apps and had fallen behind in areas including prediction markets and perpetual futures. Pollak said financial applications, including trading and payments, would become a greater focus as Base sought to develop into a blockchain for global finance.

The standard has since gained a prominent use case: on Aug. 25, Coinbase launched tokenized US stocks on Base, issuing B20 tokens representing shares in Apple, Nvidia, Meta and Alphabet.

Looking ahead, Base said it plans over the coming months to reduce block times from two seconds to 200 milliseconds, introduce protocol-level support for sponsored transaction fees and bundled transactions, and adopt some of the technical changes planned for Ethereum's Glamsterdam upgrade.