Upbit and Optimism Foundation Collaborate to Launch GIWA Chain L2
South Korea's largest digital asset trading platform Upbit announced a collaboration with the Optimism Foundation to launch the Ethereum Layer 2 network GIWA Chain based on OP Stack.
The GIWA Chain testnet is now live, with the mainnet set to launch soon, aimed at providing high-performance, low-cost, and compliant blockchain infrastructure for institutional and retail users.
Upbit COO Minseok Jung emphasized maintaining standards consistent with existing platforms, while Optimism Foundation Director Jing Wang noted that the choice of leading operators reflects the industry's trust direction. The two parties will sign a memorandum of understanding in Miami on May 4.
Funds will shift from existing Ethereum L2 to the GIWA Chain ecosystem, with institutional and retail trading volumes migrating to the new chain, benefiting both Upbit and Optimism, while early non-compliant or low-performance Layer 2 projects face pressure.
Source: Public Information
ABAB AI Insight
Upbit's parent company Dunamu has previously collaborated with multiple L2 projects through Bitget. This deep partnership with Optimism for GIWA Chain continues the trend of South Korean exchanges transitioning from pure trading platforms to building their own Layer 2 infrastructure. They have invested in OP ecosystem projects multiple times by 2025 to address regulatory compliance pressures.
In terms of capital flow, Upbit leverages its user base in Korea and globally along with Optimism's OP Stack technology to directly issue compliant blockchains and plans to integrate exchange liquidity. The strategic motive is to create a closed loop between trading fees and Gas fees while providing a KYC-friendly environment for institutional users, shifting resources from centralized matching to self-controlled Layer 2 settlement layers.
Similar to how Coinbase's launch of the Base chain led to rapid user and TVL growth, or Binance Smart Chain's early expansion path, the Ethereum Layer 2 market is currently in a mid-to-late stage of transitioning from fragmented competition to centralized compliance L2s controlled by exchanges, significantly enhancing the control of leading CEXs over on-chain infrastructure.
Essentially, this is a reconstruction of the industry chain: exchanges issuing their own L2 will deeply bind trading and settlement, with the mechanism combining OP Stack's low cost and regulatory compliance, forcing capital flow from general public chains to exchange-controlled dedicated networks, accelerating the concentration of pricing power on platforms with user entry points and liquidity backing.
ABAB News · Cognitive Law
The earlier exchanges build their own L2, the more user stickiness shifts from centralized to on-chain locking, with entry being the ultimate barrier.
The higher the compliance standards, the faster the migration of institutions; trust is never a technical issue but a licensing issue.
The choice of chain by leading players dictates the direction of industry migration, with validation always lagging behind action.