Upbit Launches Own Ethereum Layer-2 With Optimism
South Korea’s largest crypto exchange is building its own Layer 2 network to gain full operational control and scale infrastructure for millions of users.
South Korea’s leading cryptocurrency exchange, Upbit, is stepping deeper into blockchain infrastructure with plans to launch its own Ethereum Layer 2 network, signaling a broader shift among major trading platforms toward self-operated chains.
Announced on May 4, the initiative will see Upbit collaborate with the Optimism Foundation to develop a new network called GIWA Chain, powered by the OP Stack — a modular framework widely used across Ethereum scaling ecosystems.
A Strategic Move Toward Infrastructure Ownership
The upcoming GIWA Chain will debut under the Self-Managed tier of Optimism’s enterprise offering, meaning Upbit will operate the chain independently, while Optimism provides technical support and safeguards.
This approach reflects a growing trend among large exchanges and institutional players seeking greater control over blockchain infrastructure.
“What we hear consistently from the largest exchanges and institutional operators is that they want to own the chain their users transact on, not rent it,” said Jing Wang, director at the Optimism Foundation.
Unlike fully managed deployments — where Optimism oversees key functions like the sequencer and configuration — the Self-Managed model allows Upbit to retain full authority over transaction processing and network operations.
Why Sequencer Control Matters
At the core of this decision is the sequencer, a critical component in rollup-based Layer 2 systems. It determines:
- Transaction ordering
- Inclusion or exclusion of transactions
- Fee capture and revenue generation
For a regulated exchange like Upbit, maintaining control over the sequencer is essential for both compliance and economic efficiency.
Optimism emphasized this point in its announcement:
“Self-Managed is built for operators who can’t cede operational control. For a regulated exchange serving Korean and global institutional users, giving up sequencer control over Upbit’s chain was never going to be acceptable.”
Scaling Beyond Third-Party Infrastructure
With more than 13 million registered users and a history of ranking among the top global exchanges by spot trading volume, Upbit faces increasing pressure to scale efficiently.
According to Optimism, at such scale, relying on external infrastructure becomes less viable:
“At that scale, the math stops working for renting someone else’s infrastructure. Building your own chain becomes the logical next step.”
The move aligns Upbit with a broader industry trend, where exchanges are increasingly launching proprietary chains to optimize performance, reduce costs, and unlock new revenue streams.
OP Stack Gains Momentum Across Ecosystem
The OP Stack has rapidly become a preferred foundation for exchange-led blockchains. Currently:
- Over 32 Layer 2 networks operate in production using the OP Stack
- The ecosystem processed more than 6 billion transactions in 2025
These networks often form part of the so-called Superchain — a vision of interconnected chains sharing infrastructure, interoperability, and governance standards while remaining operationally independent.
Notably, projects such as Base, Unichain, and others have adopted similar architectures, often maintaining their own sequencers despite leveraging Optimism’s technology.
Earlier this year, Base, originally developed by Coinbase using the OP Stack, announced plans to transition to a fully in-house unified stack, reinforcing the industry’s move toward sovereignty over infrastructure.
GIWA Chain Enters Testnet Phase
The GIWA Chain is already live on testnet, marking an early milestone in its development lifecycle.
To support the rollout, Upbit and the Optimism Foundation have signed a memorandum of understanding (MoU) outlining collaboration on key operational safeguards. These include:
- Continuous network monitoring
- Failover sequencer systems
- Priority security patches
- Technical guidance and support
While Upbit will control the chain, Optimism will act as a “safety net”, helping ensure resilience and uptime.
Optimism acknowledged the challenges of running such infrastructure independently:
“Taking on the full weight of chain resilience alone, running the single instance of sequencer infrastructure that millions of users depend on, is a burden few single-operator chains can credibly sustain.”
What Comes Next for Upbit’s L2 Ambitions
Following the MoU, both parties are expected to finalize definitive agreements while advancing technical development. This includes:
- Architecture design reviews
- Performance benchmarking
- Comprehensive security audits
The project will gradually transition from testnet to mainnet, with timelines yet to be disclosed.
Optimism views GIWA Chain as a flagship example of its Self-Managed model — one that could influence other exchanges, payment providers, and regulated financial platforms to follow suit.
A Broader Shift in Crypto Infrastructure
Upbit’s move underscores a fundamental evolution in the crypto industry: from relying on shared infrastructure to owning it outright.
As exchanges scale to millions of users and face increasing regulatory scrutiny, the ability to control transaction flow, optimize fees, and ensure compliance internally is becoming a strategic necessity rather than a technical luxury.
With GIWA Chain now in motion, Upbit is positioning itself not just as a trading platform, but as a full-stack blockchain operator — a transition that could redefine how major exchanges interact with the Ethereum ecosystem in the years ahead.
