SEP 2, 2023
Coinbase Founder's Top 10 Focus Areas and Their Representative Projects
by 吴说猫弟, WuBlockchain
Note: This article is for information sharing only and does not endorse the projects mentioned. It has no financial interest in the projects.
Following Paradigm's announcement of its top 10 focus areas, Coinbase founder Brian Armstrong also tweeted about his top 10 crypto entrepreneurial tracks: Flatcoin (aimed at combating inflation and pegged to the cost of living); Onchain Reputation; Onchain Ads; Onchain Capital Formation; Job/Task Marketplace (decentralized labor market); Layer 2 Privacy; P2P Exchange Fully Onchain; Onchain Games; RWA (Real-World Asset Tokenization); and Tools for Network States.
The areas of focus represented by Coinbase not only differ significantly from those of Paradigm, but also demonstrate a focus on more niche and early-stage areas. Ari Paul, the founder of BlockTower Capital, expressed different opinions on the areas Brian Armstrong is focused on. For example, he believes that Onchain Reputation is a dead-end at least for the next 5 years, Job/Task Marketplace is not significantly related to cryptocurrency, and P2P Exchange Fully Onchain lack sufficient capital investment to offer a fair market return.
Of course, differing perspectives result in differing opinions. As a leading exchange in the U.S. and also possessing top-tier venture capital in the form of Coinbase Ventures, Coinbase, being a compliant public company, differs from pure VC firms focused solely on returns. Brian Armstrong's ideas are more likely to be practical, and his views are more likely to balance the pros and cons of Web2 and Web3. Areas such as Onchain Reputation, Onchain Ads, and Job/Task Marketplaces are full of flavors of moving off-chain products onto the blockchain.
This article will examine projects in the ten key areas that Coinbase founder Brian Armstrong is focusing on from multiple dimensions, including project progress, financing, on-chain data, and social attention. Priority will be given to projects invested in by Coinbase Ventures. It should be noted that some tracks are in very early stages, with few projects and a great deal of uncertainty. Investors should continuously track and carefully discern these projects.
Tracked by the CPI, aimed at overcoming inflation, maintaining purchasing power, and pegged to the cost of living, Flatcoin is a decentralized stablecoin.
Nuon Finance is a decentralized stablecoin DeFi protocol built on Arbitrum. The stablecoin NUON launched by Nuon Finance claims to be the first decentralized flatcoin. Its price is anchored and fluctuates according to the inflation rate, protecting holders from the value loss caused by inflation. The daily inflation rate pegged by NUON is measured by an independent inflation index predictor called Truflation. Every day, Truflation calculates the NUON peg rate and shares it with the Nuon Finance protocol, which uses over-collateralization and arbitrage to maintain the peg rate while offsetting inflation for NUON flatcoin holders. Nuon Treasury collects fees when collateral is deposited/withdrawn and when NUON is minted/burnt. Besides NUON, Nuon Finance also plans to launch nuMINT, used for participating in protocol governance and capturing platform fees. Nuon Finance plans to introduce Nuon Oil, a currency pegged to the value of oil and a basket of commodities, in the fourth quarter of this year.
As of September 1, on-chain data shows that the current total supply of NUON is 118,000, with 462 holders and 2,469 transactions completed, showing limited growth.
Nuon Finance has not announced any financing news but completed an audit by Coinfabrik in September 2022; Truflation, a key feed data provider for Nuon, completed a seed round of financing on May 17, 2022, with investments from Fundamental Labs, C² Ventures, Balaji Srinivasan, and IBA, via an ICO, the amount is undisclosed.
Ampleforth — SPOT Protocol
SPOT is a decentralized flatcoin conceived and launched by the DeFi protocol Ampleforth Foundation in 2022, using senior AMPL tranches as collateral. Essentially, SPOT is an algorithmic stablecoin collateralized by AMPL zero-coupon bonds. AMPL serves as the base collateral for SPOT, but due to the existence of rebase, using AMPL as collateral leads to high collateral volatility. This volatility is wrapped in the form of bonds through ButtonWood, minting Senior and Junior AMPL tranches. Senior AMPL tranches represent the lowest-risk bonds and serve as collateral for SPOT, having a priority of repayment; Junior AMPL tranches bear high AMPL volatility but also reap the value-added benefits of AMPL. Additionally, to allow the free trading of Senior AMPL tranches, SPOT has introduced an incentive mechanism called Rotators.
As of September 1, on-chain data shows that the current total supply of SPOT is 766,000, with a spot price of $1.13.
Ampleforth raised $9.8 million in financing between 2018 and 2019 through VC and public fundraising, with investors including Pantera Capital and Huobi Ventures, among others.
Ampleforth is open-source and completed a Certik audit in 2020.
Galex is a Web3 data credential and reputation network. Users can earn rewards by contributing to Galex's credential data network; administrators will receive rewards when credentials are used in Galex's application modules, oracle engines, and APIs, and when users pay for data within the Galex ecosystem. This incentivizes more users to engage in Galex management. According to the official statement, more than 2,100 partners have initiated over 10,000 activities on Galex. Through Galxe Credentials, a Web3 DID (Decentralized Identity) system, Galxe ID, has been built, offering users multi-chain identities and understanding users through their past achievements and credentials.
In January 2022, Galex completed a $10 million financing round led by Multicoin Capital and Dragonfly Capital, with participation from investors such as Coinbase Ventures and Solana Ventures.
zkMe aims to build a zk-credential (Zero-Knowledge Credential) layer for Web3, providing on-chain anonymous user verification. With the SSI (Self-Sovereign Identity) mobile app developed by zkMe, users can encrypt and anonymize their data and use ZKP (Zero-Knowledge Proofs) to prove claims on their own devices. This enables users to have full control over their digital identity and selectively disclose their reputation credentials to authorized parties without compromising their privacy.
zkMe completed a $2 million pre-seed financing round in May of this year, with investments from Circle Venture, Fenbushi Capital, and NGC Ventures.
Spindl is a Web3 measurement and attribution platform that helps identify the origins of users and what they have done on chain protocols, to determine whether users are generating protocol revenue and the cost of acquiring those users. Through attribution, such as from Discord posts to wallet logins, down to certain on-chain (or off-chain) user behaviors, the audience narrows. Knowing how monetization occurs at the "bottom end" of the application experience funnel, and how much it specifically costs to attract users through paid media like ads and blog articles, one can calculate the project's "ROAS," which stands for Return on Advertising Spend. If the ROAS is greater than 1, it means that the marketing expenditure is worth it, and vice versa.
In October 2022, Spindl completed a $7 million financing round led by Dragonfly's Ani Pai and Chapter One's Jeff Morris Jr., with participation from investors such as Multicoin Capital, Polygon Ventures, and Solana Ventures.
HypeLab is a Web3 advertising network that provides one-stop advertising materials such as images and video creatives, and uploads them directly on the self-serve advertiser portal; based on user data tags, it provides on-chain and off-chain services; and tracks advertising performance in real-time, such as traffic brought to the project, country/region, and asset segmentation.
HypeLab completed a $4 million financing round in August of this year, led by Shima Capital and Makers Fund, with participation from investors like Coinbase Ventures and OP Crypto.
Onchain Capital Formation
Syndicate is a decentralized investment protocol and social network, including two major modules: investment clubs and Collectives, enabling communities to raise and invest capital in a simpler form. However, as of June 22 this year, Syndicate has temporarily suspended support for its investment clubs and Collectives frontend. Syndicate indicates that in the new era of the internet where the potential of on-chain communities, organizations, and economies is fully exploited, Syndicate's infrastructure and protocols can meet greater needs. Furthermore, collaborations with Web3 projects over the past two years have led to more new discoveries and possibilities for Syndicate. As one of the once-largest investment DAOs (Decentralized Autonomous Organizations), Syndicate has not yet shown much about its future direction.
Syndicate has completed a total of $27.8 million in financing in 2021 and 2022, with investors including Coinbase Ventures, a16z, Circle Ventures, and Polygon Ventures.
Commonwealth is an integrated platform that provides governance discussions, voting, and crowdfunding for on-chain communities. The crowdfunding functions cover project funding, community donations, and token launches.
Commonwealth has completed a total of $23.2 million in financing in 2021 and 2022, with investors including Coinbase Ventures, HashKey Capital, and Jump Crypto.
Decentralized Labor Market
Braintrust claims to be the world's first Web3 decentralized talent network, connecting vetted knowledge workers with enterprises. Braintrust charges a 15% fee, which is 80% less than traditional contractor recruitment agencies and 40% less than direct recruitment agencies. Braintrust has also launched BTRST as a reward for building a decentralized talent network, inviting and reviewing talents, and recommending clients.
Braintrust has raised a total of $124 million in 2020 and 2021, with investors including Coinbase Ventures, Tiger Global, Multicoin Capital, and HashKey Capital.
TalentLayer is a protocol and development toolkit that can be composed with Lens Protocol for building interoperable recruitment and service platforms. The core toolkit includes: on-chain jobs and proposals, soul-bonded identities and reviews, configurable escrows like milestone bonuses and hourly wages, decentralized platform-managed dispute resolution solutions, and a configurable fee system that can charge for escrow transactions, job postings, proposal submissions, and dispute resolutions.
TalentLayer is still in its early stages and has not yet received any financing.
Layer 2 Privacy
As the first privacy Rollup, Aztec shut down Aztec Connect after March this year. In May, Aztec announced a new trustless, scalable, and decentralized L2 zkRollup, incorporating programmable anonymity, data privacy, and confidential contracts to protect users' data. The new L2 zkRollup is expected to launch its native testnet for developers in the third quarter of this year and plans to open a mature public testnet to users before early 2024.
Aztec has raised a total of $119 million in financing from 2018 to 2022, with investors including Coinbase Ventures, Paradigm, a16z, IOSG, HashKey Capital, and Fenbushi Capital.
Zecrey is an L2 protocol based on zkRollup, offering privacy and scalability. Zecrey provides a wallet that supports both L1 and Zecrey native L2 and has incorporated two different types of L2 systems, namely Zecrey Zero focused on privacy features and Zecrey Legend focused on NFT issuance and the NFT market. Zecrey Zero is a lightweight, privacy-driven portable payment solution that enables users to easily make private transfers and exchange transactions.
Zecrey has raised a total of $11.5 million in 2021 and 2022, with investors including Binance Labs, Fenbushi Capital, and Shima Capital.
P2P Exchange Fully Onchain
Connecting off-ramp and on-ramp transaction needs. Practical difficulties, such as off-ramp withdrawals, the custodianship involved, and whether it is a physical asset, etc., are difficult challenges.
Onboard Wallet is a Web3 wallet launched by Nigerian cryptocurrency company Nestcoin, founded by former Binance Labs Africa head Bademosi, who also launched the African crypto exchange Bundle Africa. Unlike standard crypto wallets, Onboard Wallet is accessible via email and lacks mnemonic phrases, but has secure key management and multi-factor authentication. The Onboard virtual card allows for cryptocurrency payments in more than 160 countries/regions. Onboard also opens up for merchants to enter the P2P market to conduct instant transactions in cryptocurrency and convert it into fiat money. Currently, Onboard is integrating with the African exchange Bundle Africa.
Nestcoin completed a pre-seed funding round of $6.45 million in January 2022, with investment from HaskKey Capital and CMT Digital.
Azra Games: Project Legends
Azra Games is a blockchain gaming company focusing on on-chain RPG games, founded and led by industry veteran Mark Otero, whose mobile game "Star Wars: Galaxy of Heroes" broke Electronic Art's revenue records. Azra Games is currently building Mark's ninth RPG game: Project Legends. Azra has launched an NFT "PLAY FOREVER PASS" that unlocks private Discord, early looks, exclusive invitations, and airdrops.
Azra has raised a total of $25 million in financing in 2022 and 2023, with investors including Coinbase Ventures, a16z, and Franklin Templeton.
Horizon Blockchain Games: Skyweaver
Horizon Blockchain Games is a company focused on game-centric blockchain infrastructure. They have launched Sequence, an integrated developer platform and smart wallet solution for Web3 games and applications, and Skyweaver, a Web3 collectible card free-to-play game. Skyweaver features 15 hero cards, 5 prisms (similar to talents), and 27 major tribal factions.
Horizon Blockchain Games has raised a total of $53.25 million from 2020 to 2022, with investors including Coinbase Ventures, Polygon Ventures, and CMT Digital.
Real-World Asset Tokenization
Goldfinch is a decentralized lending protocol, where profits come from real-world loans and investments are backed by off-chain collateral. For example, the $77 million Goldfinch Senior Pool offers an 8% yield for USDC, with borrowers spanning over 25 countries, covering asset financing, SME loans, and consumer loans. All transactions are protected by a 20-25% first-loss capital, with an overall loss rate of 2.19%. Currently, Goldfinch has over $100 million in effective loans, with a 30-day average daily income of $100,000.
Goldfinch completed $37 million in financing between 2021 and 2022, backed by investors such as Coinbase Ventures, a16z, Dragonfly, and BlockTower Capital. In addition, Goldfinch has undergone external audits by Certik and Trail of Bits, as well as an internal audit by Warbler Labs.
MoHash is a crypto asset management firm that offers global liquidity for on-chain real-world products to investors. They aim for higher returns by developing high-growth private debt markets with high alpha, with terms ranging from six months to three years. With a base yield of 6-10% and additional rewards for early adopters, MoHash expects to offer returns of up to 20% for investors.
MoHash completed a $6 million seed round in June 2022, led by Sequoia Capital India and Quona Capital, with participation from Coinbase Ventures, Jump Crypto, and Hashed Ventures.
Tools for network states
Proposed by Balaji Srinivasan, a network state is a network community with highly cohesive collective action capabilities. It raises funds globally and expands territories, eventually gaining recognition as a political entity.
Vitalik describes Zuzalu as an IRL (In Real Life) town combining cryptocurrency, life sciences, and philosophy. Zuzalu applies blockchain to urban governance and operations, such as adopting stablecoins to track internal government financial systems, urban tokens, and government-issued on-chain certificates/passports.