Coinbase Ventures Q2 Review and Market Outlook

Coinbase Ventures & Corp Dev team released the second quarter 2022 review and market outlook, let’s take a look at the performance of this recently struggling cryptocurrency industry giant .

The first half of 2022 was volatile for all markets, with the Dow and S&P having their worst first-half performances since 1962 and 1970, and the Nasdaq posting its worst first half since 2008. A bad quarter, Bitcoin is facing its worst quarter since 2011, DeFi total lock-up volume has dropped 70% from a high point, and NFT sales in June fell to unprecedented levels

Coinbase Venture’s investment performance in the second quarter

During the second quarter, Coinbase Ventures continued to be among the most active investors in the crypto space, but deals were slow, with the total number down 34% quarter-over-quarter, from 71 to 47. Despite a slowdown from the frenetic pace at the end of 2021 and the first quarter of 2022, activity in the second quarter of 2022 was still up 68% year-over-year, indicating that Coinbase’s overall venture capital business is still growing.


The decline largely reflects overall market conditions – as the market fluctuates, many founders reconsider or pause their funding access, especially at later stages. Many companies forgo financing unless absolutely necessary. However, despite the poor market conditions, there are still many high-quality founders who are very active in the seed round, and Coinbase Ventures paints a promising picture of the future: one with a dynamic series of Web3 user applications, An improved user experience, a robust DeFi marketplace, a scalable L1/L2 ecosystem, and all the tools developers need to build the next killer app. Here’s a breakdown of Coinbase Ventures’ funding activity in the second quarter.


The coming era of blockchain gaming

With Axie Infinity’s meteoric rise and subsequent decline, some see blockchain gaming as a flash in the pan. However, with over 3.2 billion gamers worldwide, Web3 gaming is bound to usher in the next wave of crypto users. Web3 gaming continued to be an area of ​​heavy investment in the second quarter, which The Block estimates attracted more than $2.6 billion in funding, as shown in the chart below.


However, it will take a while for this vertical to mature, but it is increasingly clear that blockchain gaming will become a huge category in the future, and the infusion of NFTs will greatly enhance the Web2 gaming experience.

Rewire Web2

Beyond gaming, next-generation Web3 user applications are working to disrupt the Web2 mandated model and give users control over their audiences and communities, as Coinbase Ventures-backed open protocol Farcaster is a prime example of. Farcaster has built the first social app on the protocol, but other developers can build competing clients, just like we have Gmail and Apple iCloud.

Another Coinbase Ventures investment,, is a combination of Web3 and music, allowing musicians to create their own web3-enabled fan club/community (no coding required), including token gating, access to NFT airdrops, merchandise, and more.

All in all, Coinbase Ventures remains excited about Web3’s potential to reimagine the entrenched Web2 model for social media, music, and more, and finally put the power back to creators.

Solana is on the rise

While Ethereum and EVM are still the most attractive ecosystems for developers, it is already an indisputable fact that Solana is on the rise. In the second quarter, Coinbase Ventures made 10 investment transactions in the Solana ecosystem.


Given that Solana smart contracts are coded in Rust, not EVM’s Solidity, the founding team will typically choose between one or the other. More and more teams are choosing to support both EVM and Solana from the start, and some EVM developers have already started choosing or transitioning entirely to Solana. Not only that, but the fact that many large funds have publicly expressed support for the Solana ecosystem suggests that Solana should have more staying power. However, blockchain chain viability (such as downtime issues) remains the most important issue for the Solana team to address.

Where do BUIDLers in the crypto industry come from?

According to the Coinbase Ventures-backed company, 64% of its 356 portfolios are from the US, while the UK and Germany are also growing, and India has an impressive crypto startup team that is expected to be a big part of the future of crypto. Play an important role in adoption (CBV portfolio company Frontier, with 30 engineers in India, has built a great mobile-first DeFi aggregator supporting 20+ chains and 45+ protocols).


As with previous recessions, every time cryptocurrency prices drop, someone calls “crypto is dead.” However, it’s certainly heartening that so many brilliant founders have worked tirelessly to push crypto and blockchain technology forward. With the entire financial system and the world becoming more and more digitized, it is believed that the opportunities in encryption and Web3 are far greater than most people realize.

Parts of this article were compiled from the Coinbase Blog

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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