Coinbase isn't doing too hot (here's their plan to Bear Grylls it)
Coinbase have an issue...and it's all thanks to the current bear market.
(You don't say?)
But their problems aren't the same as everyone else's.
And their unique situation gives us all a greater insight into how Web3 works as a business model.
Coinbase are one of the very few crypto companies that have public shareholders to answer to.
Which means every three months, they throw a financial therapy session between their shareholders and company execs, where they publicly disclose their growth numbers.
Here's what the latest shareholder letter from Coinbase taught us:
Right now, while cryptocurrency prices are stagnant, a lot of crypto holders are doing just that: holding.
(Which isn't the worst strategy).
But for Coinbase, a company that makes most of their money from transaction fees - lowered transaction volumes are a big problem.
Their solution? Improvise, adapt, overcome (Bear Grylls it).
Coinbase are about to move heavily into staking - in fact, they want to become the top staking provider. Because if users aren't trading crypto, they're often staking it.
It's a stupidly simple business model:
Coinbase offers staking services → users stake their crypto holdings in order to earn interest → Coinbase takes a cut of users' returns.
This will help diversify their revenue streams and make them more robust amidst long term market fluctuations.
Smart.
