Breaking down the six investment categories of Coinbase’s venture capital division

Since the successful IPO in April of this year, the development of Coinbase, the “first share of the digital currency exchange”, has been attracting market attention. With continued profitability, Coinbase’s investment is also increasing. Its founder Brian Armstrong also revealed his desire for Coinbase to become an “asset Amazon.” In this context, the investment pace of Coinbase Ventures, the venture capital division of Coinbase, has naturally become the focus of market attention.

Six investment categories More than 200 companies and projects 

According to data from market research firm CB Insights, Coinbase Ventures, the venture capital arm of Coinbase, completed 37 transactions in the first half of the year, nearly doubling the number of transactions last year, ranking third in corporate venture capital funds, second only to Google (64 transactions) and Salesforce (59 transactions). It can be said that Coinbase Ventures has grown into one of the most active venture capital institutions in the cryptocurrency field. Coinbase Ventures has invested in startups such as Vega Protocol to create a decentralized derivatives trading network, Bitcoin self-custodial company Casa, and trading company Fractal.

Earlier, Coinbase CEO Brian Armstrong published a blog post and disclosed that its strategic pillars are: 1. Crypto investment is still Coinbase’s core business, Coinbase will continue to focus on adding new assets, institutional infrastructure, and international expansion; 2. Coinbase will provide Financial services supported by modern encryption infrastructure, including DeFi, payment, income, and lending; 3. Coinbase is promoting new innovations and products beyond financial use cases, and will make in-depth investments in third-party products in the encrypted economy, including Present applications, externalize shared services, and invest in the crypto economy.

In addition, the third quarter summary report published on Coinbase’s official blog shows that in the third quarter, Ventures made a record 49 investments, with an average of one new transaction every 1.8 days. This is an increase from 28 investments in the second quarter and 24 investments in the first quarter. As of the third quarter of 2021, Ventures has more than 200 companies and projects in its portfolio.

It is worth noting that among the six investment categories of Coinbase Ventures, protocol + Web3 infrastructure (29%) accounted for the largest proportion, followed by DeFi (24%) and CeFi (18%), platform + development tools (15%), NFT+ Meta universe (9%) and others (5%). At the same time, Coinbase Ventures also shared observations on supervision, multi-chain ecology, Web3 user experience, and NFT and chain games.

Coinbase Ventures investment project

Matic Network: Now renamed Polygon, it is a second-tier scalability platform that enables fast, simple and secure off-chain transactions, not only payment transactions, but also generalized off-chain smart contracts. Is an Ethernet Square, an important contributor to the ecosystem, committed to the implementation of plasma MVP (minimum operating plasma), WalletConnect Square Ethernet protocol and event reminders engine -Dagger made outstanding contributions. Matic tokens are used for equity staking and participate in the proof consensus mechanism of the side chain network.

NEAR Protocol: It is a highly extensible basic protocol to ensure that DApp runs fast enough on mobile devices. NEAR Protocol allows developers to build mobile blockchain DApps and run them on the user’s local machine, while providing developers with important information about DApps. Through state slicing, the number of nodes in the blockchain and the network is allowed to scale linearly, and the goal is 100k TPS based on 1 million mobile nodes. NEAR is used to pay the cost of the validator, which provides scarce computing and storage resources for the network.

Graph: It is a decentralized protocol for indexing and querying blockchain data, applied to Ethereum. Graph makes data query simple and easy to operate. Anyone can build and publish open APIs, known as subgraphs, to make data easily accessible. Graph tokens have two main uses in the protocol: Indexer pledge: The indexer pledges Graph tokens so that they can be discovered by the query market and provide economic security during the execution of the work. Curator’s signal: Curators pledge Graph tokens to the curatorial market to predict which subgraphs are valuable to the network, and they will be rewarded for correct predictions. Users can pay ETH or DAI for inquiries. But the final settlement will be GRT to ensure that a common account unit is used throughout the agreement. In addition, holding native tokens can also incentivize certain behaviors through inflation. The ability to dynamically adjust monetary policy for inflation is a powerful tool in the toolbox.

Flow: A platform for a new generation of games, apps, and digital assets that power them. As a decentralized network, anyone can join and build on Flow. Flow is made by the creators of some of the most popular applications on the existing encrypted network. Flow makes building new applications and protocols safer, faster, and more efficient. Flow Token is the native asset of FLOW, and FLOW token is the token required by the mortgage platform and the currency used to pay mortgage rewards. In addition, a small amount of FLOW tokens are required to pay transaction fees, and a minimum remaining balance is required to pay for storage on the network. FLOW is a token that can always be used in applications and games on top of the Flow network.

Arweave: is a new type of blockchain storage platform designed to overcome the scalability, data availability, and cost issues that exist in blockchain data storage. This is also the difference between Arweave and most blockchain storage solutions. Arweave aims to be the “browsable home network of the Internet”. Arweave is a distributed storage network built on blockweave technology, where each block is linked to two previous blocks. Arweave is not a chain in the strict sense, but a more complex graphic structure called Blockweave. Arweave is developing a basic network that mainly hosts “permaweb”. This is a permanent, distributed network with many community-driven applications and platforms. AR is Arweave’s native functional token with the following use cases: Miner rewards: Miners in the network receive AR tokens for mining new blocks, which require them to store and provide data. A wallet owner may be both a user and a miner. Transaction fees: Users who wish to trade on the block will have to pay transaction fees in AR tokens.

Fei Protocol: Support the creation of a decentralized, scalable and fair stablecoin based on Ethereum. There is no upper limit on the supply of FEI stablecoins, which can track demand and enter circulation through sales along the combined curve. The price function will initially reward early adopters who purchase FEI at a low price. Its mission is to create a fully decentralized stablecoin. This is the position that the development team hopes the governance community will adhere to in the future. The FEI stablecoin has an uncapped supply that tracks demand, and it enters circulation through a joint curve sale. This curve approaches and is fixed at a $1 anchor price. When a new FEI demand arises, users can obtain it by purchasing on the joint curve. The price function will start to reward early adopters who buy FEI at low prices. The Fei protocol will support the creation of a joint curve with any ERC20 token, but only a single curve denominated in ETH will be included when it goes live. The mission of the Fei protocol is to create a fully decentralized stablecoin. Therefore, it is essential that tokens issued by trusted third parties (such as USDC , USDT, w BTC ) will not be used as collateral on the joint curve This is the position that the development team hopes to be shared by the governance community after the release.

Celo: It is an open and decentralized platform dedicated to helping everyone with a mobile phone enjoy financial services. The “Celo Alliance” covers nearly 100 individuals, technology companies, and organizations from all over the world. These partners are active on the Celo platform and help Celo grow. Celo is a carbon-neutral blockchain consisting of more than 100 validators. In the Celo ecosystem, CELO is the most basic currency that can be used for exchange and democratic elections. The total amount of CELO is fixed, but the value is uncertain. With CELO, you can vote for validators and for bills to influence the future of the Celo platform.

Compound: It is a decentralized money market protocol built on the Ethereum blockchain. The vision is to build a multi-currency money market fund, which internally provides a money market for the mutual integration of different currencies. Compound is a protocol based on Ethereum that is used to establish a fund pool based on changes in the supply and demand of assets and calculate the interest rate by algorithm. The supplier and borrower of the asset interact directly with the agreement to earn or pay floating interest rates. The Compound protocol attempts to solve the liquidity problem through the money market system, and most cryptocurrencies are currently idle in exchanges and wallets, and asset owners do not have corresponding interest.

UMA: It is a decentralized financial contract platform. Using UMA’s contract design model can create unique standardized products. UMA can be used to promote various financial innovations. UMA defines an open source agreement that allows both parties to design and create their own unique financial contracts.

Audius: is a decentralized music sharing and streaming protocol designed to facilitate direct transactions between listeners and creators, so that everyone can freely distribute, commercialize and stream any audio content. AUDIO tokens are the native tokens of the network. They are mainly used for the following purposes: by collateralizing tokens and running discovery nodes or content nodes, users can obtain higher fan discovery possibilities and a part of network fees; unlock tokens by locking the tokens. More exclusive functions and services, such as artist tokens and badges, and get voting rights for fans who want to share their success; participate in the protocol governance voting to contribute to the future iteration of the protocol.

Mina: The predecessor was Coda Protocol, a blockchain encryption protocol with a constant block size. The Mina protocol compresses the entire blockchain into a snapshot the size of a Twitter tweet. This means that no matter how many transactions are executed, verifying the blockchain is still convenient and accessible to everyone.

Keep Network: It is the privacy layer of Ethereum, which can be used to save private data offline. KEEP can help contracts utilize the full potential of the public chain. KEEP is an Ethereum token that powers the Keep Network, which is a platform designed to connect public blockchains and private data. One of the first products of Keep Network is the Ethereum token, which represents 1 Bitcoin, called tBTC. Keep Network enables users to deposit Bitcoin and redeem tokenized tBTC, which can then be used in the Ethereum ecosystem without a centralized intermediary. The native token of Keep Network is KEEP. KEEP is a work token-holding it gives the right to perform key functions on the network. It also has governance voting rights that depend on KIP. Token holders must entrust a minimum amount of KEEP as collateral to qualify.

Fei Protocol: Support the creation of a decentralized, scalable and fair stablecoin based on Ethereum. TRIBE is the governance token of the protocol.

DODO: It is the next-generation on-chain liquidity infrastructure based on the active market maker algorithm. As a decentralized trading platform, DODO adopts a fund pool model and pure chain transactions. Support the cost-free issuance of new assets.

DerivaDEX: is a decentralized derivatives trading protocol based on Ethereum, founded by former quantitative trading company DRW quantitative trader Aditya Palepu and former Enigma MPC senior software consultant Frederic Fortier. DerivaDEX is a community-managed derivatives trading protocol that combines performance and user asset autonomy. DDX is the native token of DerivaDEX. DDX manages the project through DerivaDAO. DDX is also used to reduce costs and strive for concessions.

Rarible: NFT-based digital collection and trading platform Rarible has launched the governance token RARI, through which users can mint, buy and sell digital collectibles without any coding skills. With the increase in the number of users of the platform and the expansion of the market, the future plans to transform to a fully decentralized autonomous organization. Therefore, the governance token will manage the development and decision-making of the platform. RARI allows the most active creators and collectors on Rarible to vote for any platform upgrade and participate in management and review. RARI is not sold on the platform, and can only be obtained through active participation in the platform. The team calls this method “Marketplace Liquidity Mining” (Marketplace Liquidity Mining). More than half of the tokens in the total supply of RARI are reserved for sellers and buyers on the Rarible market. The team will obtain RARI through weekly distribution based on the user’s weekly purchases and sales.

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