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“Obviously if Bitcoin succeeds so does Coinbase” This seems obvious, but I’m not sure it’s the case anymore. DeFi has been growing, although hampered by ether

“Obviously if Bitcoin succeeds so does Coinbase” This seems obvious, but I’m not sure it’s the case anymore. DeFi has been growing, although hampered by ethereum right now, could eventually consume much of Coinbase’s income stream. They may need to pivot to more of a banking role as ethereum solves tx fees and DeFi grows on L2. Whether that means more or less profit is not clear. I have a theory this IPO is really a calculated approach to facing such a reality, while they’re still considered untouchable.

Cullinet 6y ago
I sincerely hope that the corollary doesn't apply edit meaning that you at least wouldn't want that to be exclusively true
beaner 6y ago
Coinbase's primary function isn't to supplant blockchain transaction volume, it's to provide a fiat gateway to acquiring cryptocurrency. Transaction throughput on ethereum only helps Coinbase, because it makes what they sell more attractive.
- tracedddd 6y ago
  I’m talking about DeFi - distributed exchanges, yield generating savings accounts, and collateralized loans. Additionally ERC20 stables so on and off ramps are significantly less important. I see Coinbase’s primary function as an exchange and a way to convert to dollars. Both are threatened now. They have low fees, low latency, and more usability... but will that last?
  - beaner 6y ago
    Could be true, but the "de" in "defi" prevents it from killing Coinbase's main purpose, which is being the fiat -> crypto gateway.
    - tracedddd 6y ago
      True, it is a challenge do do a decentralized on/off ramp. But it is also questionable if that’s worth $100B valuation, too, without everything else they do.
      - beaner 6y ago
        It probably isn't itself, but as long as they're able to provide an attractive centralized alternative to the things happening in defi, they can capture a lot of that growth. Custody, trading, wallet, etc. A successful model for Coinbase at this point is probably what Google does: let others innovate, clone the ideas once they start becoming popular, keep them under an umbrella and provide easy integration/movement among them.

Cullinet 6y ago

I sincerely hope that the corollary doesn't apply edit meaning that you at least wouldn't want that to be exclusively true

beaner 6y ago

Coinbase's primary function isn't to supplant blockchain transaction volume, it's to provide a fiat gateway to acquiring cryptocurrency. Transaction throughput on ethereum only helps Coinbase, because it makes what they sell more attractive.

tracedddd 6y ago
I’m talking about DeFi - distributed exchanges, yield generating savings accounts, and collateralized loans. Additionally ERC20 stables so on and off ramps are significantly less important. I see Coinbase’s primary function as an exchange and a way to convert to dollars. Both are threatened now. They have low fees, low latency, and more usability... but will that last?
- beaner 6y ago
  Could be true, but the "de" in "defi" prevents it from killing Coinbase's main purpose, which is being the fiat -> crypto gateway.
  - tracedddd 6y ago
    True, it is a challenge do do a decentralized on/off ramp. But it is also questionable if that’s worth $100B valuation, too, without everything else they do.
    - beaner 6y ago
      It probably isn't itself, but as long as they're able to provide an attractive centralized alternative to the things happening in defi, they can capture a lot of that growth. Custody, trading, wallet, etc. A successful model for Coinbase at this point is probably what Google does: let others innovate, clone the ideas once they start becoming popular, keep them under an umbrella and provide easy integration/movement among them.