Daily Vecsignal - Upbit Launches Ethereum Layer 2 Blockchain with Optimism Backing

 May 05, 2026 | VECS News

South Korea’s largest cryptocurrency exchange, Upbit, has taken a decisive step toward infrastructure independence by launching its own Ethereum Layer 2 blockchain. The GIWA Chain, built on Optimism‘s OP Stack, represents the first deployment on OP Enterprise’s “Self-Managed” tier, meaning Upbit will operate the blockchain independently while the Optimism Foundation provides technical support . With over 13 million registered users and cumulative spot trading volume that once ranked second globally, Upbit‘s decision to own rather than rent its blockchain infrastructure marks a significant shift in institutional crypto strategy . The chain is already live on testnet with nearly 100 million transactions processed as of May 3 .

The technical architecture of GIWA Chain reveals why this move matters for institutional operators. Unlike fully managed chains where the Optimism Foundation operates the primary sequencer and controls chain configuration, the Self-Managed model gives Upbit complete control over the sequencer, the core component responsible for ordering transactions into blocks and capturing fee revenue . For a regulated exchange serving institutional users in Korea and globally, relinquishing control over the sequencer was never an acceptable option. “Self-Managed is for operators who cannot give up operational control,” Optimism wrote in a blog post announcing the partnership .

The economic logic behind Upbit‘s pivot is equally compelling. “At such a scale, renting someone else's infrastructure no longer makes sense,” Optimism noted . The exchange‘s massive user base and trading volume made third-party dependency increasingly costly and limiting. Under a non-binding memorandum of understanding, Optimism will provide Upbit with a “safety net” of institutional-grade backup services, including monitoring, failover sequencers, priority patches, and technical guidance . Dunamu Chief Operating Officer Minseok Jung stated that operating GIWA Chain is a strategic move to provide institutional and retail users with performance and compliance consistent with Upbit’s existing platform .

Upbit is not alone in pursuing this strategy. Major players including Coinbase (Base), Kraken (Ink), Uniswap (Unichain), World, Zora, and even multinational conglomerate Sony have all launched or announced chains using the OP Stack . These independent networks are part of Optimism‘s “Superchain” ecosystem, where they share interoperability, infrastructure, and governance features while paying a small portion of sequencer revenue to the Optimism Collective. However, each chain maintains operational independence, allowing operators to adapt functionality to specific regulatory and business requirements. Jing Wang, Director of the Optimism Foundation, noted that the largest exchanges and institutional operators consistently want to own the chain their users transact on rather than renting it .

The launch of GIWA Chain coincides with significant regulatory developments in South Korea that could reshape the balance of power between crypto exchanges and traditional banks. The Financial Services Commission is finalizing Phase 2 legislation of the Digital Asset Basic Act, which is expected to outline the role banks may play in stablecoin issuance . Authorities are leaning toward requiring stablecoin issuers to be bank-led consortia where a bank holds a majority stake. This has drawn criticism from the virtual asset industry, which argues that banks lack sufficient understanding of digital assets to take the lead . The government is also considering a gradual rollback of the long-standing “finance-crypto separation” rule that has effectively prohibited traditional financial institutions from holding, purchasing, or investing in virtual assets since 2017 .

For traditional banks that have long expressed skepticism about crypto instruments, Upbit‘s infrastructure move presents a complex challenge. On one hand, major commercial banks including Shinhan Bank, Industrial Bank of Korea, NH NongHyup Bank, and K Bank are forming a consortium to enter the stablecoin market, aiming to restore trust shaken by the Terra-Luna collapse and secure an early foothold in fiat-backed digital assets . K Bank President Choi Woo-hyung has pledged proactive consortium participation once stablecoin legislation is finalized, noting that Kbank will become the bank that benefits the most from the explosive stablecoin market . Yet these bank-led initiatives operate on infrastructure that exchanges like Upbit are now building independently, raising questions about who will control the underlying rails of Korea‘s digital finance future.

Expert Response: The Institutional Infrastructure View

Professor Hwang Seok-jin of Dongguk University’s Graduate School of International Information Protection argues that open ecosystem models will ultimately prevail over closed banking systems. “The future of blockchain finance depends on how many participants can be drawn into the ecosystem. Open models are far more conducive to market adoption than closed systems,” Hwang stated . This perspective suggests that Upbit‘s decision to build on Optimism’s open Superchain ecosystem may prove strategically superior to bank-led consortia that operate within more constrained regulatory and technical frameworks.

Expert Response: The Regulatory Evolution View

Jing Wang, Director of the Optimism Foundation, emphasized that institutional operators increasingly demand ownership over their 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,” Wang stated . He noted that Upbit launching on OP Enterprise Self-Managed sends a clear signal about where the industry is moving and where trust is going, adding that an operator at Upbit‘s scale would not build on infrastructure that hasn’t already proven it can carry the weight. A financial regulator cited by Pulse News added that any cryptocurrency investment by financial institutions must ensure volatility does not spread to the broader market, with equity investments in blockchain infrastructure considered the least risky option and therefore the most likely area for initial deregulation .