An early disruptor in the industry, the success of Coinbase can be put down to various factors:
- They have a seamless, easy to use interface for new investors which helps to remove a lot of the friction.
- They have secured a ‘first-movers advantage’, which allowed them to get a foothold on the on-and off-ramping of customers before most of the current competition managed to provide access to these features (Binance only started providing these services a few months ago).
- Their referral program gives $10 free for both the referrer and the referee, enticing users to spread the word and share their referral links around friends, family and other new crypto enthusiasts on the internet.
Their exclusive list of cryptocurrency offerings means that historically, when a project was listed on Coinbase, it had their ‘stamp of credibility’ and would see a 2-3x in price. These days, as the number of respectable exchanges available to users have increased, the impact of getting listed on Coinbase has decreased.
This limited number of cryptocurrencies has also worked against Coinbase, pushing users to other exchanges that offer lesser-known digital assets. There are also higher fees associated with Coinbase, as well as the famous ‘server crashes’ that seem to take place at the most inconvenient times (when price is shooting up or down).
Regarding their investment arm, they have been proactive in backing 51 different DeFi projects, trying to cement their place into the future of open finance and potentially giving us an insight into what projects have a resource advantage moving forward.
Below are the Coinbase investments that have tokens:
Matic – Bringing scale to Ethereum using an adapted version of Plasma with PoS-based side chains.
Uma – An open-source protocol that allows any two counterparties to design and create their own financial contracts, secured with economic incentives.
The Graph – An indexing protocol for query networks like Ethereum and IPFS. Anyone can publish open APIs, called subgraphs, making data easily accessible.
Coda – Swapping traditional blockchain for a tiny cryptographic proof, enabling a cryptocurrency as accessible as any other app or website.
Spacemesh – A cryptocurrency designed to be a global means of payment.
Reserve – A stablecoin ecosystem that intends to be the world reserve currency.
Celo – A platform for fast, secure and stable digital payments.
Relevant – Curation incentives for cultivating the digital commons.
Near – A scalable, developer-friendly blockchain powering the new open web.
Bloxroute – A Blockchain Distribution Network (BDN) that utilizes a global network of servers optimized for network performance; a layer-0 scalability solution.
Alchemy – Enterprise-grade scalability, security, and developer tools powering the leading blockchain products used in 197 countries.