Something odd is happening at Coinbase. For nearly two years, the company had been plodding along as the bloated corporate baron of the crypto world, delivering underwhelming results even as its executives gorged themselves on stock sales. But lately, there is a different aura around Coinbase. The firm seems lean and focused, and is displaying a coolness unseen since its startup days.
This was evidenced by its announcement last week of a new blockchain called Base. The blockchain is a so-called layer-2 chain that sits atop Ethereum and will process transactions more cheaply and efficiently, and is built using code from Optimism—a popular open-source project that is already one of the leading projects in the effort to scale Ethereum.
The launch of Base is important for a number of reasons. First, it means Coinbase has finally joined rival Binance in operating a blockchain of its own. This gives the company a convenient platform to introduce its millions of customers to an array of decentralized apps, potentially turbocharging the broader world of Web3 in the process. Coinbase is also reportedly pitching Base as a key forum for developers, which could both expand its influence and aid its long-running push to diversify its revenue stream.
Meanwhile, the decision to make Base a complement to the open-source Optimism ecosystem won Coinbase rare applause from crypto purists who like to ridicule the company as too corporate and controlling. While the Base rollout was not without hiccups, the overall vibe of the project appears to have won Coinbase renewed goodwill with influential figures in the crypto world.
This successful launch of the major project comes after Coinbase has significantly reduced its headcount, and begun to focus on its core crypto business rather than Hollywood vanity projects, which have been a source of distraction in recent years. This can only improve the company’s bottom line. This renewed focus, along with a recent uptick in crypto trading and Coinbase’s newly lucrative stablecoin business, is likely to deliver beleaguered shareholders a pleasant surprise for the company’s next earnings report.
None of this means Coinbase has definitively turned the corner and returned to the days of early 2021 when its stock traded above $300. Like everyone else, the company is navigating a brutal regulatory landscape and is dependent on the ongoing recovery in the broader crypto market. But for now it feels as if Coinbase is doing things right from a financial and product standpoint—and has even become one of the industry cool kids once again.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
