Coinbase's Secret Plan to Absorb Corporate Blockchains in Massive Shakeout
Cryptocurrency and financial news outlet CryptoSlate published an article on why corporate blockchains are heading for a massive shakeout. The article states that Coinbase CEO Brian Armstrong expects the boom in corporate blockchains to end in consolidation rather than coexistence.
The proliferation of corporate blockchains has revived concerns that regulated companies with established distribution could draw financial activity away from permissionless networks that powered crypto's growth. However, Armstrong views the new launches as fragmenting liquidity and users before network effects force weaker platforms to combine or retreat.
Data from Token Terminal shows that only 24 of the 110 Ethereum scaling projects were processing more than two user operations per second as of July 31, while activity fell below one operation per second by the 32nd-ranked network. This demonstrates that deploying a chain is easier than attracting lasting liquidity and developers.
Armstrong compared the proliferation of corporate networks to the stablecoin market, where numerous companies introduced dollar-linked tokens but activity concentrated around Tether and USDC. He expects some specialized chains may remain independent, while others could eventually decide that the cost of maintaining separate infrastructure exceeds the value of controlling it, leading to an 'M&A-type process' for blockchains.
Coinbase is exploring a Base token, which could serve as neutral infrastructure rather than an extension of its exchange. The company has not disclosed a launch date or distribution model but aims to continue deeper decentralization and explore governance or validation power for the token holders.