← CRYPTO 101
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- [00:00]
A
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- [01:30]
B
All right everybody, welcome back to another action packed high caliber episode here at the Crypto 101 podcast. I am fired the heck up. We have an incredible guest today. Brendan, are you as fired up as I am?
- [01:44]
C
Dude, I'm always fired up, but especially so for this one. We got a really exciting episode in store and I think something that everyone, all the listeners are going to find pretty interesting.
- [01:54]
B
Yeah, everybody who's listening has probably heard of Coinbase and we've had four folks from different divisions of Coinbase on the show. But this is our first time speaking with AEL Ibsa. Welcome to the show. He is the head of corporate development and mergers and acquisitions at Coinbase Ail, thank you so much for joining.
- [02:14]
D
Thanks for having me guys. I'm excited to be here.
- [02:16]
B
Yeah, this is going to be a really fun one. I mean, you guys just, you know, you guys I think have done eight or or so acquisitions or mergers in 2012. 25 alone, is that correct?
- [02:28]
D
We have done eight this year and we have done more than 40 over the life of the company.
- [02:32]
C
Wow.
- [02:33]
D
Wow.
- [02:33]
B
Okay, so I think I wish we could do a lightning round and go into each, in each and every 40, but maybe later on in the show we'll do a lightning round of the eight in 2025.
- [02:43]
C
I got a question, Akhil. Do you get vacation, do you get vacation hours over there? 40 is a lot, man.
- [02:51]
D
Yeah, it's been a banner year for us. You know, Coinbase is not for the faint of heart. I try to take vacation where I can, but, you know, things are definitely busy.
- [02:59]
B
Yeah, no, there was a, there was a huge, huge announcement that just, you know, completely blew up crypto Twitter recently with echo and sonar. And we could kind of go into that, you know, in much more depth. But let's just zoom out into a little bit about a vignette of your life. You know, who are you, what was your background and why did Coinbase, you know, realize, hey, you're the perfect guy for the gig?
- [03:23]
D
Yeah, sure. So let's see. I started my career in investment banking. So traditional finance at Deutsche bank in their investment banking group got to work on a lot of different types of transactions, so mergers and acquisitions, which obviously I'll get to a little bit later, capital markets and advisory type work. And you know, I really have always had a love for technology and wanted to end up in technology. And so following my, you know, two year analyst program, I joined LinkedIn where I spent some time in the mergers and acquisitions group. There was got to lead a number of different M and A deals and some investments. And you know, in all of my Wisdom As a 20 something year old, I thought, you know, maybe I wanted to start a company. So I actually took a little bit of a weird detour into product management, built some product for LinkedIn. And you know, like a lot of people I think in, you know, who enter the crypto space, I was proverbially like red pilled, you know, the love for technology and the idea that blockchains could be this new kind of innovative technology layer that makes it cheaper, faster, more efficient, you know, to move value around. I think I just got extremely excited about that concept and joined Coinbase. And so that was about, you know, six and a half years ago now and has been, has been quite the ride since then.
- [04:39]
B
Wow, that's awesome, man. Where do we start? I mean, there's so many different avenues that we could go down, but I guess if we like just take it as a high level. What's Coinbase's strategy with mergers and acquisitions? Is this something that you would consider like a really aggressive strategy? Is it more defensive? Is it high growth? How do you categorize it?
- [04:59]
D
Yeah, so I think our M and A strategy is really just an extension and a tool that we use to accelerate our roadmap. And you know, we have a pretty ambitious vision. You know, we want to create an open financial system for the world and create more economic freedom in the world. And we want to do so by being this sort of primary account for this emergent asset class and the growing on chain economy. And you know, we did so initially with kind of pure retail brokerage business and have now extended that to an institutional business, a developer business and have a lot of different products. But the, I think the one kind of underlying theme is we want to be this sort of primary account for this emergent asset class. And when we think about M and A, it's really just a tool that can help us push that forward a little bit faster. You could always build products, you can always partner to accelerate certain products that you're offering. And you know, M A is just another kind of tool in the tool belt to help accelerate that. And so I would say, you know, our strategy has been really aligned with the overall kind of company and product strategy. And you know, I would say from a, from an aggression standpoint, it is, I would say, at least in 2025, a pretty aggressive strategy. And we're excited about the impact that it's going to have.
- [06:07]
B
Totally. And no, I love the vision. And I'm curious, just, you know, tactically, what's your primary focus right now, you know, in terms of verticals that you're looking at, kind of to build out that whole vision?
- [06:20]
D
Yeah, it's a great question. So we have a couple of different things that we're excited about. I'll kind of tick through each of them and then happy to dig into anyone in particular if that's of interest. So the first is derivatives. So derivatives, I think, you know, for, for your audience, it's, it's a large, large portion of all of the collective revenue that exists in crypto. And you know, we bought Deribit, which was a $3 billion deal that, you know, I think helped push our, our path forward there with, you know, the number one options player.
- [06:47]
B
I think that was also the largest crypto acquisition by, by dollar amount ever, right?
- [06:53]
D
It was, yes.
- [06:54]
B
Don't just breeze over that. You're on the pod. You could you know, you could gloat a little bit.
- [06:59]
D
Yeah, no, it was the largest deal in crypto history and remains the largest deal in crypto history. So we're very excited about that. But we think there could be more to be done there. Derivatives is just such a massive opportunity and so totally we're excited to continue to spend time there. The second category we're excited about is broadly what we would characterize as onchain consumer and infrastructure. So we obviously have base, we have tba, we have all these sort of onchain businesses that previously were pretty small as a relative contribution to the overall company and have now really kind of reached real scale and product market fit. And so we're kind of looking for different opportunities to help augment and accelerate those businesses. Echo is a great example of that. Helps bring together builders that are looking for capital and then market participants that are looking to access new and interesting projects. Spindle also fits in that category. An on chain ads platform that brings together builders and our distribution and monetizes that relationship. And so we're constantly on the lookout for new innovative kind of adjacencies in the on chain consumer infrastructure space. The third, I would say, is really around this everything exchange concept. So we kind of put down the gauntlet, I would say, a couple of months back to say Coinbase wants to be the everything Exchange. And historically we've been sort of like this single asset class type trading experience for retail institutions and the like. And we've sort of made the strategic decision to want to offer everything that people want to trade and, and do so in a way that feels authentic to us, which is on crypto rails. So that's things like prediction markets, that's tokenized equities, and hopefully more tokenized assets to come alongside our traditional, you know, crypto buy, sell business. And, you know, there's constantly going to be sort of assets that'll help us accelerate that. But that's, I would say the third one, the fourth I would say is, you know, stablecoins and payments. So unless you've been living under a rock, stablecoins and payments have really, I think, come into the forefront for not even just people in crypto, but really, I would say anybody who spends any time in fintech and financial services more broadly. The idea that stablecoin Rails are a faster, cheaper, more global rail to send and receive money, I think is a very interesting concept for us and really helps push utility in crypto forward. And so we're excited to look at, you know, potential acquisitions that could accelerate that too. There's probably a handful more, but those are. Those are, I think, a good list to start us off. Hell yeah.
- [09:30]
A
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- [11:27]
E
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- [11:56]
C
No, I think it's a fantastic way to start us off. And kind of along those lines, I believe you've described Coinbase as building the operating system for crypto rather than becoming a traditional bank, which is a really interesting way of putting it. And I think it kind of helps paint the picture for the listeners and for the general users and all of them. What does that mean though, in terms of infrastructure and the services that you're acquiring?
- [12:24]
D
Yeah, it's a good question. So I'd say thematically for Coinbase operating system is a good way to kind of frame it. The other way we like to frame it is this primary account for this emerging on chain economy. And you know, I use that word primary account, I think quite deliberately. And in some cases our products will be directly user facing. So traditionally that's where Coinbase started. We were a brokerage business and you know, extended that to institutions. And you know, we've increasingly now been investing quite aggressively in the infrastructure layer too. And so that means things like our crypto as a service business that helps power other brokers that want to offer crypto buy selling. It also means custody for large institutions that want to park their funds with us. And so I think the general through line is we want to sort of be this primary home or primary account for this asset class, both in terms of, you know, user facing products like our, our core trading business, but also infrastructure products to help power others to push the on chain economy forward. And you know, honestly, I think our, our net, I think goal is just to create economic freedom in the world. And we think that this, you know, new asset class and crypto rails is a much more efficient way to do that than the traditional, traditional system.
- [13:41]
C
Yeah, it is. And when you guys are doing this at such scale, again, was it 40 since inception and 8 in the last year, how do you balance build versus those build versus buy decisions? Because Coinbase already has such a significant kind of internal engineering resources at your disposal. How do you kind of balance between those two?
- [14:04]
D
Yeah, it's a great question. So we actually think about the menu of options as buy, build, partner or invest. And there's various characteristics that we sort of look at and try to litigate on, you know, when is a particular capability better to buy versus to potentially build. And if you just look at that lens, the cases for when we buy typically include one. You know, is there some inherent thing about this capability that is very difficult for us to replicate internally? One example of that would be something like what we saw with deribit. Deribit was, you know, the leading crypto options player on the planet that had significant network effects because of how much liquidity that existed within the exchange. Very difficult to replicate that internally. The second piece is, is there some reason why we need to enter into this capability much faster than what we could possibly do from a build perspective? Crypto obviously, as your listeners very well know, moves extremely, extremely fast. And sometimes it necessitates us making a quick and very concentrated large bet to get into a market much faster than what would be possible with us building. And in some cases, you know, markets haven't necessarily formed yet. So, you know, as one example, we were pretty early on a number of, I would say early categories like crypto and the intersection between AI. You know, we were pretty early on a couple of things and those tend to be more better investment opportunities when these markets are much earlier or experimental in nature. And you know, we kind of want to participate, but maybe it doesn't make sense to buy and own it quite yet.
- [15:46]
B
Yeah, that's awesome. Kind of along those same lines, where do some of the synergies that might or might not exist between Coinbase Ventures and your division at M and A and corporate development? Do you guys take a look at those guys first or. I don't know, I'll just leave it open ended.
- [16:03]
D
Yeah, it's funny, the individual who runs Coinbase Ventures and I joined within about a month of each other and so it's, and he's actually one of my closest friends at the, at the company. And so from that alone there's quite a bit of synergy. And he, he and I joke that, you know, he kind of lives six to 12 months ahead of where I live. Just given the places where he spends his time. He spends a lot of his time in the earliest stages of, you know, early categories in crypto, whereas I'll spend time more on, you know, where are there capabilities and products that have, you know, near term markets that have formed around them have significant product market fitness, oftentimes captive operating businesses. And so I would say from a synergy standpoint, we work, you know, closely with the Ventures team and you know, often there is overlap on categories or Capabilities that we're both looking to buy or potentially invest in. But often it's the case that they operate, you know, much, much earlier stage than, than we do on the, on the M and A side.
- [17:02]
B
That makes a ton of sense. I feel like, I don't know if it's just me and like my, my news flow and my sources and stuff, but I feel like trad fi hasn't made that many, like, quick crypto acquisitions. It feels like it's just been maybe crypto companies acquiring smaller crypto companies, but you haven't heard of like, you know, JP Morgan Chase, like acquiring something like. I guess is the premise of the question wrong? Because it's like, no, I'm dumb. Like, you're just missing all the news or is that actually true?
- [17:33]
D
I think there's some truth to that, Bryce. So here's how I would sort of characterize it. Over the last six to seven years, M& A and the broader capital markets in crypto have undergone, I would say, fairly sizable shifts. So, you know, when I first entered into the scene, you know, in 2019, there wasn't a ton of crypto M and A really at all. It was us and maybe one other potential, you know, maybe a handful of other players in crypto. And most of those were centralized, large exchanges. And, you know, I think if you fast forward to now, the buyer universe has expanded considerably, but has stayed, I would say, relatively fixed within crypto, but now increasingly fintech players. I think the drivers for that are regulatory clarity. So fintech players that have historically either been on the sidelines or have been less interested in making big bets in crypto have now kind of been emboldened to do that. You could point to Stripe, you could point to Robinhood, you can point to a number of these other fintech players that historically were kind of experimenting in crypto, but now are really kind of entering into the space in a meaningful way. The second piece I would say is companies like Gemini or Circle or Bullish. And a number of these crypto companies have gone public and now have public market currency to go finance M and A. And so I expect to see them, you know, show up a bit more. But I think you're right, Bryce, that the larger kind of tradfies haven't historically been nearly as. As involved or making large bets on M and A. And I think that is the case today, but I don't think will be the case in the future. I think the primary driver around that it's likely to going to be, you know, Increased regulatory clarity. You know, I think for large banks and institutions, it's much more difficult, I would say, to participate in crypto without very, very clear rules. And I think as and when this asset class continues to mature, that I think you'll see much more participation and potentially consolidation after that.
- [19:31]
B
And I think you're hitting the nail on the head. I see your CEO Brian Armstrong posting videos from Capitol Hill talking about the Clarity Act. It feels like every week or something and it feels like there's good progress and we're really excited about that. And so is that something that kind of needs to pass and get some legislation memorialized before we could like, like you said, have like the big players, the banks, these large, you know, multibillion dollar, sometimes trillion dollar fiduciaries start to play in the market that you're playing in?
- [20:04]
D
I think for that segment, the answer, I mean, I can't speak for, you know, any individual specific name, but if you look historically at, you know, early asset classes or early technologies that were in their infancy and largely experimental that reached massive scale, you know, new segments of participants get unlocked generally when you start to see regulatory clarity. And I think that is absolutely the case in financial services. And you're inherently dealing with people or institutions, money. And you know, in that, in that circumstance, I would say that it's even more important that there be regulatory clarity for people in that segment to really start to activate. And so I'd say, you know, view it similar to the Internet. The Internet was, you know, kind of a bunch of weirdos like you, you and me, and we're experimenting on, you know, moving information around the world through these like, you know, linked web pages sitting on a mosaic browser and you know, has obviously changed into this massive multitrillion dollar industry that exists today. And if you recall, I mean, I don't know, way back in the day, like people wouldn't even put their credit card information into an Internet browser. And that's obviously since changed. And you have multi hundred billion dollar industries based on that concept alone. And so I'd say maybe not to be too grand, but I think TRADFI will definitely activate. I think regulatory clarity will help accelerate that. And overall, I think it's good and net positive for the ecosystem. I think we're all kind of in this to see crypto in the hands of everybody in the world and, you know, really try to disintermediate what the traditional financial system has to offer.
- [21:38]
B
So yeah, that point about the credit cards on the Internet just made me Laugh. My dad, when I got into crypto and all that kind of stuff, he was like, crypto, this is insane. You know, years and years ago and then he was telling me a story, you know, way after the fact, and crypto kind of like, you know, actually worked out. He goes, you know, it reminds me of when your grandma refused to put money into an atm and she thought that she just like, this is insane. I'm never going to use an atm.
- [22:03]
A
And.
- [22:03]
B
And then of course, it became like the main way that people like, you know, get money, you know, deposit their paychecks and, you know, could get the money out and all that kind of stuff. And so he's like, I see it kind of as like, you know, that, that next development. And obviously it's kind of a crude parallel, but I think it, you know, comes to bear that, you know, these new technologies are scary and, and I think the regulators might be also scared but starting to accept. We saw the genius act that like, you know, has, you know, basically now the Secretary of the treasury is like, because of the genius act, we're going to have like, you know, a 10x growth in stablecoins by the end of the decade, like in five years, which is crazy to think about and like, what that's going to do to market caps in crypto and all that kind of stuff. But, but I'm not sure if you're a lawyer and certainly don't want any question here to be a leading question, as if you're providing legal advice or anything like that. But, but what are the sticking points? What, what regulatory clarity is needed? What are people so unclear about?
- [23:01]
D
Yeah, you know, I'd say I will. I am not a lawyer. And, you know, I think my, my observation is, you know, if you rewind the clock to the prior administration, it was extraordinarily unclear which assets were securities or not securities. And some of the fundamental notions for, you know, how crypto operates, you know, decentralized, permissionless, you know, in some ways having an element of privacy. We're just, I guess, fundamentally not compatible with the existing regulatory framework. And, you know, from my perspective, that was a massive barrier to growth in adoption within the crypto industry. And, you know, I think things like that are, I think, probably top of mind, at least for me, you know, areas that are just fundamentally incompatible with what crypto actually is as an asset class. And so when these sorts of things start to get clarified, it makes the rules very clear. And when the rules are very clear, then market participants can start to activate in the space and overall, I guess, matures the asset class. And I think your broader theme, Bryce, is right that these things are early. They are early, scary technologies and it takes time for people to both wrap their arms around it and for regulators to wrap their heads around it. But over time, I think that, you know, we've seen tremendous progress in this, on this and you know, I'm confident that it'll continue. Yeah.
- [24:30]
C
And kind of along those lines, I mean, when we're looking at the different markets and bridging tradfi and crypto and looking at all these different moving parts, one of the things that I saw recently was Larry Fink going full throttle on 60 Minutes about tokenization and crypto. And I'm sure you guys saw this too. Some of the listeners probably saw this. It was awesome to see and it's, it's been interesting to see him go from kind of skeptical about it to just a full on bull. But you know, Coinbase wants to get involved with similar stuff. Speaking about kind of just bringing traditional equities on change, tokenizing different versions of them. I want to know as much as you can tell us about this without putting your job at risk. But I saw that Coinbase has been looking into a number of these different things, you know, looking at trying to bring some of these traditional equities on chain or at least have tradable versions of them.
- [25:28]
A
Yeah.
- [25:28]
B
And I did see some kind of index as well that was launched that had like real world, you know, stocks and stuff.
- [25:33]
D
So yeah, I think so. Look, we've been reasonably public, I would say, about, you know, our, our plans here and you know, I can give you a flavor for what's been announced and you know, maybe a flavor for, you know, what we're excited about. And so as part of the everything exchange strategy, we want to offer things like tokenized equities. And then I think taking a step back, why is tokenization important? Tokenization in my opinion is important because we think crypto rails are just a better infrastructure for providing global liquidity and global access. I think tokenized equities is interesting, but know, taking things a step further, it could be much more interesting to have more novel assets that are tokenized and globally available for people to participate. And so I'd say in general we are quite excited about tokenization. We want to offer tokenized assets to our customers because we think that, you know, crypto rails are just a better infrastructure for facilitating global capital markets. It actually ties in quite nicely with, you know, why we're excited about Echo and the deal that we just did there. We think that tokenized assets and making those available to our customers is just a better means of facilitating capital markets globally.
- [26:49]
C
Well, let's talk a little bit more about that because we're seeing this happen on the tradfi side. We clearly see them wanting to get involved with crypto. We see ETFs, we see different basket ETFs, we see all these different forms of the tradfi, like banks and asset managers wanting to provide some sort of crypto service. And now you know, with like yourselves, with these, a lot of these crypto players, we're also seeing them do this kind of opposite approach where they're saying, well, let's actually provide some of these equities. Except the difference is, is that the crypto side saying let's keep things on chain and you mentioned that you think that it's a better way to do things. I guess. Why is it a better way to do things? Because you guys could easily go out and just say hey, we're going to allow people to trade stocks on Coinbase the normal way. But you guys are going about it a little bit of a different way and saying we want this to be tokenized because we think it's superior.
- [27:42]
D
Yeah. So I think it comes down to why are blockchains a better infrastructure for moving value around. And I think the reason for that is that they are Internet native. They are accessible by really anybody with a phone and, or a computer and an Internet connection as opposed to being subject to, you know, in some cases a few century old, you know, centralized financial system. And so sure, we could offer regular way equities without any sort of tokenization elements but it doesn't, it's not, it's not authentic to Coinbase. You know, we think that you know, crypto rails are a better infrastructure for you know, global trade, global payments, global capital markets and you know, to it's, I just say it's just more authentic to us to do that in a much more crypto native way because we think that you know, all markets will be on chain eventually because it's better infrastructure and you know, offering tokenized equities. I think just sort of the first step in that direction.
- [28:36]
B
Yeah. Plus who needs another like just normal brokerage account like, like it's been pretty well groked, you know, so I think it's cool. I love your, your innovation forward attitude just across the company and I, I do want to spend some time kind of digging into the, the meat and Potatoes of Ekko, the most recent sort of, you know, acquisition. You guys just worked really hard on this. So first off, congrats on getting this done. But, but what does it mean for Coinbase's users? Tell us a little bit about the story because everybody knows, or everybody who's like, you know, hooked up to crypto Twitter knows about Kobe, who was one of the original sort of founders or early, early employees. What's going on with this?
- [29:20]
D
Yeah, so we are extremely excited about Echo. So Eko, what is it? It is essentially a platform that enables founders to find market participants and facilitate primary capital raises. And we think that it's taking a step back, helping us reimagine capital formation. It's all too often that founders find it very difficult to find investors to invest in their projects. And then conversely, we hear from participants on our platform that they want to participate in some of these newer projects much earlier in the lifecycle. And Echo kind of helps us bring those two things together. And I think just dovetailing off of a lot of what I said around capital formation helps us push forward this concept of capital formation happening on chain and it being inherently more global and permissionless. Today, Ekko will continue to operate as a standalone platform and you should expect to see us integrate, you know, key capabilities of both their Echo product as well as their new Sonar product and, you know, help kind of push the fold on, you know, capital formation on chain.
- [30:26]
B
I love it. So is, is Echo and Sonar, are these platforms that like, are some of our listeners who, who might not even be accredited, is that something they can use so they could start to get early opportunities or is this really just for your qualified high net worth individuals?
- [30:42]
D
Yeah, it's a good question. So not a lawyer, but what I can say is that, you know, we do want to provide access to these opportunities to, you know, users on our platform and we will do so in a way that's obviously fully safe, transparent and compliant. But we do have to obviously be subject to the laws and which govern, you know, us as a US listed publicly traded company. But I think in general we are very excited about On Chain Capital Formation. We think that Echo gets us, you know, tremendously much further in that and we're excited to help bring these opportunities to our customers.
- [31:15]
B
Yeah, no, I, I'm super excited about it. I haven't participated on an, an Echo raise, but I remember, I think it was earlier this summer they did just a massive raise for plasma, the XPL token. And this was something where, you know, I'm Trading around. People are talking on telegram. Oh, do you get an allocation? This and that. I was like, yeah, I'll see how it goes. Maybe I'll like, you know, see, you know, a week, a week or two after the raise, it sold out in like 30 seconds or something like that. And like it was like a 5, like $500 million raise. And so, you know, talk a little bit about like just the, you know, I guess the like, how did that happen? Or the power of this platform. Is it just because like anybody anywhere in the world can access it? And yeah, what, what happened there? Because that was like a huge, huge.
- [32:00]
D
Blow up in a good way. You know what, yeah, it's, I think you'll continue to see more of that. It just in my opinion, speaks to the pent up demand that exists for global permissionless capital markets. People want access to these projects and founders want access to investors that are interested in their projects. And historically I've been Silicon Valley technology now for close to 15 years and you can't go to any coffee shop without hearing about founders and investors trying to find, you know, opportunities to connect and, and work together on projects. And so I think from our perspective, an Internet native crypto native platform that allows founders and investors to connect on, you know, capital opportunities for primary raises is, I think it just speaks to the demand that exists there.
- [32:47]
B
Awesome. Well, I had a little something planned. I wanted to do a little bit of a lightning round for the eight sort of acquisitions this year. Does that sound good? Just like, you know, getting people a high level, you know, 32nd minute overview of each of these and kind of how they tie into their experience.
- [33:05]
D
Let's do it.
- [33:06]
B
Okay, so, and again, I'm not sure if I have got these all in order, but let's start with Rome. What's Rome?
- [33:14]
D
Yeah, so Roam was an on chain crypto native browser application that was started by a number of individuals, two of whom had come actually through acquisitions to Coinbase before. We were kind of embarking on a path to build and execute on tba, which I'm sure you and your listeners know about. We just thought that this team was exceptional and wanted to bring them in to help accelerate our path there. There are two, three individuals that, you know, we just thought the world of and we kind of call it a boomerang story because some of these two of those folks were at Coinbase before and they boomerang back to Coinbase through the acquisition.
- [33:55]
B
I like that. And you did mention spindle a little bit, but yeah, spindle tell Us. Tell us more.
- [34:02]
D
Yeah, Spindle was an on chain or is an on chain ads platform. The impetus for this one was we kept hearing from our builders, both on base and just people who are building in the ecosystem, that they want access to Coinbase distribution. And if you're building on base, you have tooling and infrastructure. But how can I actually access Coinbase's users? And so Spindle is essentially the link between builders and our distribution and enables us to monetize that relationship through ads. So as a builder on base or as a builder in the ecosystem, you can log on to Spindle and you can run ads directly on our Coinbase surfaces and drive user acquisition to your app.
- [34:43]
B
I love it. That sounds awesome. And you know, Iron Fish is the next one. I remember when this one came out, this was a big privacy play. I believe that's right.
- [34:52]
D
Yeah. So we believe that privacy is a fundamental tenet, I would say, just of human rights. And that's, I think, certainly my belief. And you know, I think that blockchains are an incredible, you know, kind of new innovation and infrastructure to facilitate, you know, global, permissionless, decentralized trade and commerce and payments. But I think what is somewhat missing, I would say from that, is privacy. You know, all of these privacy transactions are recorded on a public ledger. You know, I don't know about you guys, but if I'm sending somebody a Venmo after dinner, I'm hitting the private button, then it doesn't display that on the feed. And so it's, you know, from our perspective, if, you know, base has sort of become this wild, resounding success, as, you know, one of the top L2s, we sort of need to figure out a way in which we can enable more use cases and drive more adoption through privacy preserving type experiences across our different surface areas. And the team is exceptional there and we're excited to see what they're, what they're going to do this year.
- [35:54]
B
Yeah. On the privacy note, I don't know if I'm just picking up an Easter egg or I got my tinfoil hat on or anything, but I noticed Coinbase's main Twitter handle has a shield on it now. And I know all of the zcash folks all have a shield on their Twitter handle. Is there any, any overlap or.
- [36:15]
D
Our lips are sealed. I am totally the wrong person for that. Maybe, I don't know.
- [36:20]
B
Could be. You never know. Yeah, zcash had had an incredible run. I think the whole privacy meta is starting to, to really take roost and could be Just on the, the tailwinds of a little bit of a more, you know, regulatory friendly environment. But let's talk. Oh, we talked about DARE a bit. So I'll, I'll spare you on this one, but let's talk about Liquify.
- [36:41]
D
Yeah. So Liquify was really the first push for this broader end to end capital formation stack that we're kind of pulling together with both Liquify and Echo. And I think the way to think about what Liquify is is it's more or less a shareworks Carta type product for crypto. You're a founder or a builder and you want to do a token. They help you with investor management, with vesting schedules for both your investors as well as your employees. And if you think about where does this kind of all tie the full suite together. You know, Liquify helps with company and token creation. It also helps with investor management. Echo helps with private fundraises and Sonar helps with public token sales. And then Coinbase obviously helps with distribution and listing. And so between that, we want to kind of build this kind of end to end solution for capital formation where a founder can go from idea to token to listing, you know, as quickly as possible and then hope, hopefully help bend the curve on more and more on chain businesses, both raising capital and starting on chain.
- [37:49]
B
Man, it's, it's really hitting home for me right now just how beautiful this vision is that, you know, again runs through the veins of Coinbase. It's not just, hey, we're going to be, you know, the best crypto exchange which you are, but it's really about, we want to provide all of these different tools and resources for builders so that, you know, you could, you know, continue to have, you know, more crypto companies, more crypto launches, like all that kind of stuff. Like you're really attacking it from both the consumer and I guess like the service provider level, giving tools to everybody. So it's really cool. That's, it's definitely, you know, this lightning round has made that very clear. Let's talk about Open opyn.
- [38:30]
D
Yeah, so Open was really really, or is, I should say is a really strong team of individuals that have spent time sort of in the inner workings of how do we bring, you know, Dexs and you know, decentralized financial services to Coinbase. And you know, we fundamentally believe that all markets will end up on chain. And these two individuals were, you know, an exceptional addition, I would say, to our institutional business that's actively thinking through, you know, many different initiatives around Decentralized exchanges and you know, how do we sort of continue to innovate across our different markets products. So we obviously have the deribit exchange, we have our futures exchange, we have an international exchange and you know, these individuals sort of serve as a link for how do we bring more and more of that activity on chain.
- [39:23]
B
Love it. And we talked about Echo. But finally, I want to bring Sensible to the lightning round.
- [39:29]
D
So Sensible was previously an application that enabled you to receive defi yields through a really easy to use interface. We were investors in the company and I'd known Jacob and Zach and the team there for a number of years and we had sort of reached a point in our respective journeys where our visions were beginning to converge. Where, you know, Coinbase wanted to be the everything exchange and provide access to decentralized financial services in a really easy use format. And our visions were totally aligned. And so we acquired them and announced that a few weeks back. And now those individuals are leading a lot of those efforts at Coinbase and you know, the perfect people to do that because that's what the company did before. Beautiful.
- [40:16]
C
Yeah. I mean, what a lightning round. Just so much to unpack. There's so much to talk about, but it got my brain strained. I love thinking about the theoreticals, the wildest case scenarios. So got a question for you.
- [40:28]
B
He's a dreamer. I'm a dreamer.
- [40:31]
C
I'm the wild card over here. But if you could theoretically, keyword theoretically there, acquire any company or any type of company, you don't have to worry about the details, the money, the regulations, you don't have to worry about anything. It just you. It magically happened, who would it be or I guess what would it be and why?
- [40:52]
D
Yeah, good question. I can't, I would say, speak specific names, but I can give you categories. How's that? Okay, that's perfect. Yeah. I think I'm personally exceptionally high conviction and excited about what's happening in prediction markets. And you know, I would say the category itself has obviously been around for quite some time. I do think that crypto, given its, you know, inherent, you know, decentralized, permissionless nature, gives it a lot more interesting characteristics. And I think I do fundamentally believe that prediction markets will, will be on chain, but I think that the product and the category is just going to evolve in ways that we can't even possibly fathom today. And you know, I get the same feeling in my gut around prediction markets as I did when I joined the crypto industry back in 2017, where, you know, it's sort of this underlying concept or primitive that is sort of permeating and use cases are starting to stem from it. And, you know, you can't really see how it's going to evolve, but, you know, it's going to be something really important in the world. And I think with the election, that kind of really brought it onto the scene. And I think you're just starting to see some of those use cases start to take off. And so I'd say, you know, I'm very excited about what's happening in that, in that category and it's probably the one I would probably want to pick.
- [42:10]
B
Awesome. That's, that's a great one. I actually just right before we hopped on, got a little flash news alert that Poly Market is going to now be available in the United States here, they said within the next few weeks, but we'll see. Sometimes those things take a little bit of time to actually unfold and hit the market and all that kind of stuff. But I believe Kalshi is, is available in most of the states and it's going to be incredible to, to see hopefully, you know, what, what Coinbase does down the line if, if anything, you know, I, I also, I think. Didn't Polymarket just get a $2 billion investment from Intercontinental Exchange? The. Or am I just dreaming? I think that was right. Two billion bucks. Yeah. That's a big one. That's another big one. So before we kind of close out and you know, we greatly appreciate you spending so much time with us today. We're, I just want to, you know, as much as, again, as much as you can share. I know you're, you know, you've got a public company, right. And so there, there's, there's certain things you can and can't share. But I just. What's your view on like the market where we're at right now with, you know, between Bitcoin and altcoins? Do you have just like a high level, like markets take?
- [43:24]
D
Yeah. So I'd say we've been in a pretty protracted period of high volatility, I'd say for a decent chunk of time. There have been a lot of, I guess, net new, call it drivers of volatility and growth in crypto in the last 12 to 18 months. You have the digital asset treasuries, you have the explosion of stable coins and payments. You have fundamental market structure changes around the ETFs. You have regulatory clarity. You can't really look too far to see more bull signals. I would Say that's kind of carrying this market cycle. I think it's anyone's guess where we're at in the, in the cycle. You know, we have been in historically. You know, bull and bear cycles are anywhere from 12 to 36 months and you know, can expand and contract. And so I'd say, you know, hopeful that we close out and have a really strong rest of 2025. And you know, I'm excited to see all the things that Coinbase has to offer as well as, you know, a lot of the things that we're seeing around regulatory clarity from a macro standpoint. And I think we'll have to kind of go into 2026 fresh eyed and see where things are at. I'm personally quite bullish on the next 12 to 18 months and I think that there's a lot of secular tailwinds with what's happening in crypto, but it's really anybody's guess. The industry kind of moves and breathes and shakes as it sees fit. So we'll have to see.
- [44:47]
B
Yeah, no, it is wild. I mean especially just valuations, it seems like in the liquid markets just got completely reset after the, the 10:10, October 10th sort of black Friday event that we had. Did that affect private market valuations at all? Like do you see things like as particularly expensive or particularly cheap or kind of fair right now? And I guess that'll be kind of the closing question.
- [45:12]
D
Yeah. So, you know, I think in private market valuations there's definitely a little bit of a lagging effect relative to public market valuations. You typically don't see an immediate correction, especially if you're looking at things at the seed stage. But over time those things can sort of start to drip down and affect private market valuations. I think what you typically see is that there's a stronger correction in later stage and then early stage remains largely untouched. That said, I would say crypto markets are a little bit different. And you know, I would say for, you know, companies that are looking to launch a token, you know, that's obviously impacts the capital markets on the liquid side, impact how they're thinking about valuations and their potential to go out with a token. And so I'd say that there's a lagging effect, we haven't seen a tremendous impact. But those sorts of things like 1010, they shake the religion a little bit. And I think people try to do a little flight to safety. But to be totally honest, as brutal as it was, I kind of expected a little bit more of an absolute Bloodbath, I think, for a massive, you know, market correction like that. And so I think that, to me, is just a signal of maturation in the crypto industry and maturation in liquid markets. It obviously was brutal. But, you know, I do think that the asset class has shown some resiliency and, you know, valuations will correct. But I think over time, it's, you know, just great to see that the industry is starting to mature.
- [46:41]
B
Love it, sir. Thank you so much for joining us, Mr. Akil Ibsa, head of corporate development and Mergers and Acquisitions at Coinbase. Where can people follow along with your story? And everybody knows where to follow Coinbase, but are you on Twitter? Do you have a blog or anything like that that we could post in the show Notes?
- [46:59]
D
Yes. Yes. On Twitter. I think it's underscore aklio zero. I can send that over to you. Yeah, that'd be.
- [47:07]
B
It is. I'm looking at it right now. Underscore Aklil0.
- [47:11]
D
Sweet. Yeah, that's probably the best place to follow me.
- [47:15]
B
Awesome. This has been a true treat. We greatly appreciate your time and the Coinbase team for helping make this happen. So without further ado, we're gonna let you go enjoy your day and hopefully we'll have you back maybe same time next year. And there's gonna be 12 mergers and acquisitions that we could do a lightning round on. But take care.
- [47:33]
D
All right, take care. Thanks, guys. Extra value meals are back. That means 10 tender juicy McNuggets and medium fries and a drink are just $8 only at McDonald's for a limited time only. Prices and participation may vary.
- [47:57]
B
Prices may be higher in Hawaii, Alaska and California.
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E
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F
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