Posted on September 20, 2022
Coinbase launches a new Web 3 development platform to drive the development of gaming, decentralized finance, and non-fungible tokens.
At the core of the new platform is a technology called Node that makes it easy for developers to successfully configure and launch a blockchain node, amongst other things. Depending on the context, a technology stack is a suite of tools like programming languages, a database, a set of programming languages, frontend tools, and backend tools that a company uses as a foundation for building applications.
The Node stack will make it easy for a developer, for example, to synchronize a Web2 frontend with a Web3 backend, even if elements of the product lie outside their core competencies.
Coinbase, the largest crypto exchange in the U.S., has had a rough 2022, with Q2 revenue falling $60 million short of analysts’ estimates with reported losses of $1.1 billion.
Bison Trails or Alchemy
Chief product officer Surojit Chatterjee, who is leading the launch of Node on Coinbase Cloud, said in an interview with Forbes that to grow the Web3 ecosystem, the company must help developers because it cannot invent everything itself.
Initially, Node will support Ethereum, with other blockchains set to follow. It will use backend infrastructure from Bison Trails, a blockchain infrastructure company that Coinbase acquired in 2021
The launch of Node symbolizes a new era for Coinbase Cloud, a product Coinbase initially intended to be the Amazon Web Services for crypto by providing “crypto computing services.” Coinbase Cloud was also part of the company’s strategy to diversify its revenue streams that once consisted primarily of transaction fees.
“Crypto is not just buying and selling tokens, it’s building this whole financial system on top of the blockchain,” said Chatterjee in Dec. 2021.
Coinbase may face headwinds while trying to attract developers away from specialist companies like Alchemy, which provides backend infrastructure similar to Bison Trails and boasts clients like OpenSea and NFT game Axie Infinity.
Diverse revenue streams are critical to Coinbase’s future
According to CEO Brian Armstrong, the company hopes Coinbase Cloud gains traction with developers.
Coinbase reported losses of $1.1 billion following the recent crypto market downturn that saw its stock plummet almost three quarters since the beginning of this year. The company recently launched a staking service to combat declining trading revenue, with plans for a prime brokerage offering and a self-custodial wallet. Armstrong added that the company hopes its subscription services revenue, which accounted for 18% of its overall revenue, will grow to 50%.