On-chain is the New Online: Coinbase Takes On Innovators Dilemma
Coinbase plans to build it's own layer-2 blockchain to help onboard the next billion users
Coinbase is BASED!
Coinbase just made a HUGE splash in the web3 with their announcement of Base - a game-changing layer-2 blockchain that doesn't use a token and is built on the powerful Optimism stack, another layer-2 technology.
Sound complicated?
We'll break it down for you.
You see we’re in a weird stage of web3 – we can build consumer-facing applications but the UX sucks so bad that it’s hard to onboard new users into the ecosystem.
The apps aren’t good enough yet for your girlfriend who knows nothing about web3 to use them on a daily basis.
Why would she use a web3 Pinterest if she had to log in with a MetaMask and sign a transaction every time she uploaded a photo, liked, followed, or commented?
Enter Coinbase which has one of the best onramps in all of crypto. They have close to 100 million verified users and mostly good UX but what are those users doing?
They’re speculating on dog meme coins, that’s what!
We have to get past the speculation phase to achieve mass adoption in web3.
However, Coinbase kept running into the same problem – what apps should they build and what blockchain should they deploy it on?
That’s one of the biggest friction points for developers entering crypto which leaves us with not many apps your girlfriend wants to use.
So, Coinbase decided to build its own blockchain that makes it easy to build consumer phasing apps that could spark mass adoption. By doing this Coinbase is:
Competing with Optimisim by using their OP stack
Competing with itself
It’s clever, and somewhat crazy because they’re a publicly traded company and most Wallstreet people will see it as a dumb move because someone could show up and build an app that competes with Coinbase.
However, they see it as a rising tide lifts all ships type of thing. If we get to billions of users in web3, that will also help them as one of the best onramps in all of crypto.
Apps in crypto are VERY high leverage.
For example, Uniswap was built with a much smaller team and had a massive impact compared to some bank in web2 that employs thousands of people.
They also believe that “on-chain is the new online” which means they’re betting that in the future, people won’t pick whether they want to build in web2 or web3, they will just build in web3.
Do you think this is a good move?
I’d love to hear your thoughts in the comments.
Small Favor: I’m trying to grow this damn newsletter so it would mean A LOT if you could share it with your friends on Twitter.
Spotify Goes Web3
Who needs boring old stocks when you can trade funky monkey NFTs?
It's a blast, but let's be real - it's not the most practical use for these digital assets.
Sure, they catch our attention and generate some buzz, but there's only so much hype to go around.
The real excitement lies in the promise of web3, which offers creators the chance to earn more revenue than ever before.
We've already seen glimpses of this potential, but everyone has been holding their breath for a major tech company to take the plunge and integrate NFTs.
Well, the wait is over - Spotify has finally answered the call and joined the NFT game!
“At Spotify, we routinely conduct a number of tests in an effort to improve our user experience.
Some of those end up paving the path for our broader user experience, and others serve only as important learnings.
We have no further news to share on future plans at this time,” a Spotify spokesperson said.
Web3 is where the real action is.
It's the future of revenue for creators, and we've only scratched the surface of its potential.
Spotify is one example of what could be many in the not-too-distant future especially when you hear that the new YouTube CEO has a bullish outlook on web3.
Follow Your Dreams? Canceled!
Big tech has been swinging the axe!
Thousands of people are getting the boot as companies focus on maximizing efficiency and productivity.
And now, this trend is hitting the world of Web3, with MagicEden and Polygon both announcing layoffs of around 20% of their workforce.
After raising an impressive $450 million and establishing major partnerships with global brands like Starbucks, it’s somewhat shocking to see Polygon lay off employees.
That said, you’ll also notice they spent roughly $200 million dollars with rumors floating around they paid Starbucks $20 million for the partnership.
However, it did not have a big impact on the token price until recently, and apparently, that wasn’t enough.
What does that mean for the outlook of web3?
Not much.
I think most web3 companies probably overhired and now need to cut down to a more efficient staff.
Web3 Quick Hits
Blur overtakes Opensea in trading volume with epic growth hack