Coinbase's ambition: An all-encompassing exchange and an all-encompassing distribution layer.

Author: Charlie Liu

I wasn't planning to write another article before the end of the year, but Coinbase's "System Update" presentation yesterday had so many highlights that I hesitated and decided to put pen to paper again.

This year I wrote about Robinhood vs Coinbase and also discussed it in depth on a friend's podcast. Both are Gen-Z's favorite financial apps, but this battle is becoming more complex.

The press conference announced a series of new product features: stocks, prediction markets, perpetual contracts, a DEX entry point for directly integrating Base and Solana's on-chain long-tail assets into the Coinbase main app, enterprise-oriented payments and collections, AI investment advisors, and the Base App—packaged as a globally on-chain "everything app" with tokenizable and tradable content, becoming a new platform for creators. Beneath the surface of this "all-in-one" approach lies a deeper meaning: Coinbase's latest update isn't just about piling on features, but also about strengthening its "distribution layer" role—using more distribution entry points to transform itself into a more comprehensive, compliant financial product, allowing tokenized finance to occur within its interface, even if the underlying blockchain, assets, and even exchanges aren't native to Coinbase. Finance may seem like a technology war, but it's actually a distribution war. Technology and products are certainly key, but profits usually come from the user mindshare and stickiness gained through strategic positioning—when you decide to buy, sell, borrow, or pay, you don't want to switch apps. On the retail side: it's intentionally blurring the lines between itself and Robinhood. Coinbase's slogan is straightforward: "Everything Exchange." The most concrete action is incorporating US stock trading into its main app, putting crypto and stocks in the same account view, allowing direct stock purchases with USD or USDC, coupled with a typical (Robinhood-driven) retail-friendly narrative of "zero commission, 24/5." Functionally, this is moving closer to Robinhood. Stocks, as the largest financial asset class in the retail market, are a fiercely contested battleground, aiming to become the top product in the minds of end-users. Moreover, Coinbase hasn't just listed stocks; it's listed another type of asset closer to "attention assets"—the wildly popular prediction markets of this year. During the initial launch phase of the prediction market, all market traffic will come from Kalshi. Instead of (temporarily) building everything in-house, it's first embedding a compliant, mature backend, firmly controlling the front door. This is a typical approach for European and American fintech companies. Stripe/Adyen also started with payment gateways, a path already proven by Robinhood. Prediction Markets: Kalshi is not a feature, but a "compliant distribution weapon." Prediction markets have seen explosive growth this year, with Polymarket vs. Kalshi being a frequently mentioned comparison. On the surface, it's a battle between products and liquidity pools, but from a distribution perspective, Kalshi's differentiated competitive advantage lies in its easier embedding by large platforms. Kalshi emphasizes that it is a contract market regulated by the CFTC. In contrast, Polymarket's predicament in the US lies in compliance; the closer it gets to its most valuable customer base (existing KYC users of large platforms), the more difficult its distribution becomes. Therefore, Kalshi's distribution advantage truly materializes: Coinbase doesn't need to win the "liquidity" metric on day one through prediction markets; it needs to make prediction markets a habitual channel, embedded within an app that already holds user balances and has completed KYC. To put it more bluntly, like Robinhood, Coinbase wants to capture the initial buzz among users. Sports, elections, data, policies, climate, cultural trends—these are events that spread through social media and are most likely to convert attention into transactional behavior. It's dangerous, almost addictive, but it's precisely because of this danger that it's so widely distributed. Beyond that, there's a second-order effect that's easily overlooked: prediction markets not only generate transactions but also data. It's closer to "quantifiable emotions" than social media, captures narrative turning points faster than news, and is more easily productized by AI into users' next actions. Therefore, when you simultaneously place an AI Advisor in your app, this data isn't just traffic; it's actionable intention input. Chains and Assets: Beyond Base, Winning More Trust

Coinbase has tasted success with its bet on Base over the past two years, and it will continue down this path. However, a crucial move in this update is bringing Solana into the same distribution stream for discovering and trading long-tail assets.On the surface, this is an experience upgrade: no need to switch wallets or navigate complex cross-chain paths. At a deeper level, it's responding to two pressures simultaneously.

The first is "perception".. "Will Coinbase always favor its own blockchain?" This is a matter of trust. If you want to be an Everything Exchange, you can't let users feel like you're promoting your own products, even if they only have doubts. Multi-chain aggregation is a way to suppress this doubt. The second is "capture." Let the flow circulating in another leading ecosystem flow into Coinbase's own ecosystem, complete transactions and cross-selling within its own fee, risk control, and distribution system. It's not "Coinbase becoming DeFi," but rather "Coinbase turning DeFi into its own underlying supply," which is still the logic of a distribution portal. The third is "ambition." If Ethereum and Solana continue to vie for the narrative space of "the chain Wall Street prefers," Coinbase's inclusion of both in its distribution network essentially elevates its strategic position as a "neutral gateway"—regardless of which chain ultimately wins, it wants to remain undefeated. B2B: Stripe + Brex's Ambition, A Year of Transformation

Looking at it from a retail perspective, Coinbase Business is increasingly positioned as a "one-stop enterprise financial services" platform: providing startups and SMEs with a complete package of services including accounts, payments, collections, USDC earnings, and compliance infrastructure, and entering the market from key markets like the US and Singapore where enterprise financial services are mature.

The transformation and evolution from Coinbase Commerce to Coinbase Business over the past year has been remarkable.

The transformation and evolution from Coinbase Commerce to Coinbase Business over the past year has been truly remarkable.

Using "Stripe + Brex" as an analogy is helpful—not that Coinbase will replace them, but that it's targeting a more full-stack and complete B2B fintech service. Stripe's strength lies in "acquiring and orchestration." Brex's strength lies in "spending and money management." Coinbase, on the other hand, is building a suite of crypto-native enterprise services: stablecoin settlement, global payments, USDC money management, and the ability to store assets, send and receive payments, and potentially add more tools in the future, all within a single account. What makes it even more powerful is not just the surface-level SaaS services of Coinbase Business, but also the underlying modular CDP (Coinbase Developer Platform) – and its implication that Coinbase wants to expand its customer base to "all apps". Coinbase summarizes the capabilities of CDP into four pillars: custody, payments, trading, and stablecoins. In other words, any app can build wallets, payment systems, and trading capabilities on top of Coinbase's underlying capabilities. x402, on the other hand, seems more like a further bet on this new narrative of agentic commerce: it wants to sit below the application economy, not just be part of the crypto economy. Stripe made money in the era of e-commerce migrating to APIs. Coinbase is betting on a new era: as payments, wallets, and transactions migrate to stablecoin tracks and on-chain, money will flow along a similar path to infrastructure providers. Identity and Attention: Base App is the Answer for the "Post-SocialFi" Era. Coinbase says Base App is available in over 140 countries and describes it as an on-chain everything app: social, transactional, payment, distribution, and earning are all integrated, and content is tokenizable and tradable. Web2 monetization stacks centralize value; creators often feel like they're receiving a salary, while platform fees and inflation erode purchasing power. The Base App's narrative aligns with a16z's long-standing advocacy of Web3: if your work, influence, and community relationships exist in your wallet as native on-chain assets, it can potentially allow creators to directly receive future appreciation returns, rather than just receiving a small, non-compensatory wage-like income allocated by the platform that doesn't offset inflation and excessive money supply. However, the challenges are also real: a16z's SocialFi, based on the Web3 concept, hasn't performed ideally. Landmark projects like Farcaster are converging towards a "wallet-first" approach—because pure social interaction doesn't generate compound interest; it's the wallet and asset loop that does. In this context, the Base App's intention becomes clear: Coinbase isn't trying to create a better Instagram/TikTok, but rather saying that the wallet is the new account, the news feed is the new asset discovery mechanism, and the social layer is subordinate to the financial layer, with asset-driven distribution logic. AI Advisor: It's the glue, and also the risk amplifier. Coinbase Advisor transforms natural language intent into portfolios and execution paths, emphasizing that it's non-autonomous—it won't automatically place orders without user confirmation. This is almost an inevitable development trend: when you cram stocks, crypto, perpetual bonds, prediction markets, and lending into one app, you must reduce decision fatigue and enhance discovery mechanisms, using AI to assist in information gathering, analysis, and decision-making. You can't expect ordinary users to be their own CIO, macro researcher, and risk manager every day. Strategically, it's about competing for the "intent layer." However, this may also be where the most backlash will come from: when an app simultaneously includes stocks, perpetual bonds, prediction markets, social trading, and AI recommendations, it will be judged by regulators and the public based on the "worst possible outcome," rather than on the "smoother user experience." The phrase "AI makes me..." is naturally suited to become fodder for future news attacks against them. Coinbase can use its compliance structure to mitigate risk as much as possible, but reputational risk still exists and will amplify as its distribution network expands. So, what is Coinbase becoming? Putting all these factors together, Coinbase looks more like it's building three interlocking moats. The first layer is the consumer home screen: multi-asset trading + high-frequency attention loop (prediction market) + long-tail asset discovery (DEX aggregation, seamless cross-chain). The second layer is the enterprise/developer foundation: wallets, stablecoin payments, and transaction APIs, allowing other apps to develop financial capabilities on top of it. x402, on the other hand, attempts to embed itself into the next generation's default payment standard. The third layer is identity: Base App integrates wallet, information flow, and ownership into a single distribution platform, creating a closed loop of "content—transaction—revenue." Within this framework, comparing it only to Robinhood is correct, but far from sufficient. Robinhood is merely a retail distribution machine, while Coinbase aspires to be: Retail distribution + Commercial distribution + Wallet/Identity distribution. Ambitions are high, but constraints are also clear: regulation and trust. This battle ultimately doesn't depend on whether Coinbase can implement the features, but on whether it can maintain a consistent user experience under regulatory pressure—avoiding being forced into a fragmented collection of mutually exclusive tabs. As long as it can maintain the consistency of its "main screen," this distribution system will begin to self-reinforce.