Ep. 693 How Coinbase Ventures Invest in Crypto Projects and Their 2026 Outlook

Summary

CRYPTO 101 – Ep. 693: How Coinbase Ventures Invests in Crypto Projects and Their 2026 Outlook

Hosts: Bryce Paul & Brendan Viehman
Guest: Huli Tejwani, Head of Coinbase Ventures
Release Date: December 16, 2025

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Episode Overview

This episode dives deep into the venture capital philosophy and future outlook of Coinbase Ventures, one of the most active investors in the crypto space. Bryce and Brendan are joined by Huli Tejwani to discuss the firm's investment strategies, the sectors they're most bullish on, the impact of regulatory changes, the proliferation of crypto IPOs, the "Coinbase Mafia" phenomenon, and actionable lessons for both retail investors and aspiring crypto founders. The conversation is forward-looking, optimistic, and loaded with practical insights for anyone navigating the unpredictable crypto markets.

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Main Discussion Points

1. Crypto Market Sentiment & Time Horizon

• Market Context:
  • 2025 has felt like a crypto "winter," with negative returns for major assets and significant drops in small-cap indexes.
  • Despite weak price action, underlying fundamentals and regulatory progress provide optimism for the future.
• Long-Term Thinking:
  • Huli stresses the importance of a long-term perspective over getting caught up in short-term price changes.
    • “Don’t worry about the price charts. It’s all about time horizon.” – Huli (01:44)
  • “If you zoom out, if someone’s been just small dollar-cost averaging into Bitcoin for 10 years, they’ve done quite well, right?” – Huli (14:28)

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2. Coinbase Ventures: Mission, Evolution, and Strategy

[03:12 – 07:20]

• Origins:

  • Started as a simple blog post and small checks from Coinbase’s balance sheet to seed the crypto ecosystem.
  • No grand plan at inception, but quickly grew into one of the most active crypto investors globally.
  • Maintains a strict separation from Coinbase exchange listings (no investment favoritism).

• Current Structure:

  • Functions as a traditional VC within Coinbase with multiple strategies:
    • Pre-seed/seed: “Ecosystem investing”
    • Core seed/Series A: $1-5 million checks
    • Growth-stage and select liquid token investments

• Mandate:

  • Seeks to back “exceptional founders…really move the entire ecosystem and space forward” (05:16)

• Success Stories:

  • Early investments in major L2s (Optimism, Arbitrum, StarkNet), OpenSea (NFTs), Uniswap (DeFi), among others.

  “I think pretty much the major projects or categories for our space we’ve had exposure to.” – Huli (06:12)

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3. How Coinbase Ventures Invests

[11:16 – 12:38]

• Deal Structure:
  • Mix of equity, SAFEs (Simple Agreement for Future Equity), and direct token exposure.
  • “Project-specific” approach; not a hedge fund, focus is on 5-10 year horizons.
• Underwriting Approach:
  • Early-stage: Expect many zeros (failures), but aim for a “power law” where a handful produce 10 to 100x returns.
  • Later-stage: Focus shifts as companies have proven business models and revenue.

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4. Investment Philosophy for Investors

[13:55 – 15:56]

• Investing Mentality:
  • All about time horizon, not short-term trading.
  • “We as humans are so wired for kind of short-term measurement... But when you’ve gone through like 80% drawdowns and 80% upswings multiple times... you focus on where the secular trend is going over a multi-year period.” – Huli (14:28)
• Advice for Retail Investors:
  • Prioritize conviction and the long game, rather than constantly reacting to market swings.

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5. Sectors and Themes for 2025 & 2026

[16:22 – 23:03]

Areas of Major Focus:

• Stablecoins & Payments:

  • “The Genius Act really was a game changer... clear rules of the road” (16:38).
  • Anticipates 10-100x growth in global stablecoin adoption.

• DeFi:

  • Continues to be an area of innovation and active investment.

• Real World Assets & Regulatory Progress:

  • Expecting market structure bill to expand on-chain asset classes.
  • “We’re spending a lot of time with real world asset type use cases and different forms of exchanges...” (16:52)

• Prediction Markets:

  • “Clearly… have hit massive product market fit. They’ve gone mainstream.” (17:30)
  • Believes prediction markets and stablecoins are now the "killer apps" for crypto.

• Perpetual Futures (Perps) for Everything:

  • Early investments here; believes every asset type can be expressed as a perp on-chain.

• DeFi Credit Models:

  • “Under-collateralized credit…” and “on-chain credit score” (20:28).

• Privacy Solutions:

  • Importance is resurging; balancing privacy/cypherpunk ethos with regulatory compliance.

• AI & Crypto Synergy:

  • Blockchains are key for proof of humanity, incentivizing data, and AI model security.

  “Blockchains and crypto are going to play a very complementary role into that secular trend.” – Huli (21:52)

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6. The Investment Process & Deal Flow

[23:03 – 24:55]

• Deal Sourcing:

  • Leverages Coinbase’s broad network for inbound pitches.
  • Also does proactive “thesis-driven” outbound scouting for teams that align with researched trends.

• What They Look For:

  • Preference for “long-term, mission-oriented founders with the right technical DNA.”
  • Will bet on a great founder with a mediocre idea, expecting they’ll pivot to something great.

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7. Market Trends: Small Caps, Early-Stage Vs. Public Markets

[25:43 – 28:39]

• Small Cap Tokens:

  • Explosion of new tokens disperses liquidity and attention.
  • Some large outliers emerge, but bulk of small/micro-caps may underperform.

• Early-Stage Correlation:

  • No direct correlation between early-stage investment trends and small-cap token performance, but believes strong projects always stand out in the noise.

• Overall Outlook:

  • “We’re more bullish than we’ve ever been… regulatory climate is 180 degrees better than it was a few years ago.” (27:33)
  • Developer growth, user bases, and stablecoin volumes all trending up.

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8. Regulatory Changes: The Clarity Act & On-Chain Fundraising

[28:39 – 36:33]

• The Clarity Act:

  • Desire for clear rules on token classification (security/commodity), responsible agencies, compliant token holder value distribution, and registration frameworks.
  • “Just opens the design space for these smart contracts token instruments to not be artificially constrained…” (29:39)
  • On-chain capital formation (e.g., via Echo/Sonar) is flipping the venture model, democratizing access to new investments.

• Impact on Institutions and Startups:

  • Increased institutional participation need not edge out smaller participants; more capital formation and experimentation are ultimately positive.

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9. The Crypto IPO Boom and Coexistence with Tokens

[36:33 – 40:34]

• Crypto IPOs:

  • 2025 dubbed “the year of the crypto IPOs.”
  • More exit routes (equities and tokens) de-risk venture returns and expand possibilities.

• Equities vs. Tokens:

  • Both will coexist; public company equities (e.g., Circle, Coinbase) don’t replace the need or value proposition for tokens.
  • Each investor can find assets matching their risk, governance, and return preferences.

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10. On-Chain Fundraising Platforms: Echo vs. Sonar

[41:22 – 42:05]

• Echo:
  • For private sales and pre-token launch fundraising among accredited/KYC’d investors (“like an on-chain AngelList”).
• Sonar:
  • For public token sales and broader distribution.

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11. The "Coinbase Mafia" & Founder Qualities

[42:05 – 44:36]

• “Coinbase Mafia”:

  • Over 100 startups founded by Coinbase alumni; Coinbase Ventures has backed nearly half.
  • “Talent density” and a culture of entrepreneurial DNA drive this trend.
  • Coinbase encourages employees to build, and acts as a springboard for new founders.

• Traits of Top Founders:

  • “Intrinsic motivation… the whole missionaries vs. mercenaries thing, are you oriented towards building something substantive and long-term?” (44:36)
  • Strong co-founding teams, at least one technical founder, and clear communication (“explain like I’m five” is a superpower).

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12. Hard-Won Lessons from 500+ Investments

[46:08 – 47:56]

• “It’s easy to be contrarian. It’s hard to be contrarian and right.”
• “Don’t index on social proof”—what matters is what the team has built and shipped.
• Talent comes everywhere; don’t overweight degrees/pedigree.
• “Maximalism isn’t the route… always check your priors and be willing to update as new information arrives.”

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Notable Quotes & Memorable Moments

• On Market Timing:

  • “If you zoom out, it puts a lot of things in perspective. …There will certainly be things that have 10 to 100x future outcomes and it’s just all about having conviction and having a first principles view.” – Huli (48:23)

• On Power Law Returns:

  • “It’s really that power law, where a handful are these 10 to 100x return outcomes.” – Huli (12:38)

• Advice for Founders:

  • “Clear communication is a direct indicator of clear thinking. …That’s a superpower I think, especially in our space.” – Huli (45:54)

• On the State of Crypto in 2025:

  • “From a fundamentals perspective, it’s as bright as ever. …We’re as bullish as ever deploying. It really is all about time horizon. Don’t get caught up in the weeklies, the hourlies, the five minute chart.” – Huli (48:23)

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Timestamps for Key Segments

• 01:44: Huli on time horizon over price charts
• 03:12 – 07:20: Coinbase Ventures’ origins, growth, and current structure
• 11:16 – 12:38: How Coinbase Ventures structures investments
• 14:28: The importance of long-term investing in crypto
• 16:22 – 23:03: 2025 sector review and 2026 themes
• 25:43 – 28:39: Small-cap performance and early-stage perspectives
• 28:39 – 36:33: Regulatory clarity and its impact
• 36:33 – 40:34: Crypto IPOs and the investable universe
• 41:22 – 42:05: Echo vs. Sonar explained
• 42:05 – 44:36: The Coinbase Mafia & key founder traits
• 46:08 – 47:56: Hard-won VC lessons
• 48:23 – 49:23: Final advice, optimism for 2026, and contact info

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Final Words & Resources

• Future Outlook:

  • The future is fundamentally bright despite 2025’s tough market. Regulatory clarity, infrastructure, and user/developer growth all bode well for the coming years.
  • “If you’re interested in working in any of those areas that we shared in the blog post, we’d love to hear from you.” – Huli (49:01)

• Where to Follow:

  • X (Twitter): @HulieG
  • Coinbase Ventures Blog: Coinbase Ventures Blog

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This episode is a must-listen for retail investors, builders, and founders seeking to understand how world-class VCs approach conviction, timing, and thesis-driven investing in the rapidly evolving crypto industry.

Transcript

[Podcast Host]

Welcome to the Crypto 101 podcast presented by Gemini, your bridge to the future of money.

[Bryce]

All right, everybody, welcome back to another episode of the Crypto 101 podcast. I'm your co host, Bryce. Super jazzed for today. We've got a great guest. Brendan, how are you doing?

[Brendan]

I'm, I'm doing good too, man. It's, we're hanging in there through this last little season of the crypto market. A little colder than expected, but we're all good.

[Bryce]

It's like a freaking winter both, you know, in, in the seasons, but also in the market. I don't know, I'm starting to get, you know, behind this idea that we've been in a bare market this whole year. You know, Bitcoin, you know, Ethereum, things are negative on the year. I was looking at some of these small cap crypto indexes that are down 60, 70% on the year. And so definitely not a bull market. Although there have been pockets of optimism, there's been a lot of good fundamentals that have developed, but prices haven't caught up. So. Yeah, so a lot of questions in our mind and our audience mind. And while we won't be focusing so much on prices in this episode, we're going to be talking about what the builders are excited about and what the long term venture investors are doing and what they think. Really, this whole, this whole long term view of crypto really is give us a little bit of optimism amidst some of the, the pessimism in the price charts. But with that little preamble out of the way, we are so excited to welcome the head of Coinbase Ventures, Huli Tejwani. Thank you for joining us. How are you doing?

[Huli Tejwani]

Doing great. Uh, thanks, Bryce Brennan. And uh, don't worry about the price charts. It's all about time horizon.

[Bryce]

Yeah, no, it's, it's, it's hard. You know, crypto's trading 247 and so, you know, you get off work and it's like, oh, well, might as well check the prices. Oh, bad price. Why did I do that? But we want to zoom out a little bit, get acquainted with who you are, hooly, talk a little bit about your background. Just so our audience kind of is, is caught up to speed on, on who you are and what you're working on today.

[Huli Tejwani]

Sure, happy to. So my name's Julie. I've been here at Coinbase coming up on seven years. I, before this, I've done a whole bunch of different things. I was at an early stage, it was at Bain & Co. And their private equity group. But I first got exposed to crypto and bitcoin at grad school at mit. The digital asset kind of research group was spinning up there and they did an airdrop to MIT students with bitcoin. I was one of the not smart people who didn't claim it and then got very jealous when my classmates were funding expensive vacations to the Hamptons. That's what kind of started me down the crypto journey. And I've worn a bunch of different hats at Coinbase. I've worked closely with the Clio who you guys had on recently on the Corp Dev and M and A side in the beginning part of my tenure, but about three years ago shifted to focus to focus fully on Coinbase Ventures and our early stage investing.

[Bryce]

Programs. Yeah, no, Coin. It's funny, Coinbase has so many different branches in divisions and so tell us a little bit about what Coinbase Ventures does and how it's different from like, you know, we log on to coinbase.com, we start making trades and stuff like that. You know, give us the lay of the land.

[Huli Tejwani]

Here. Yeah, totally. And it's probably helpful if I just like zoom out and go through the origin story for. For Coinbase.

[Bryce]

Ventures. Yeah, that'd be super.

[Huli Tejwani]

Helpful. It really started just as a blog post and a credit to Brian and Emily and Balaji who was here at the time and the culture they have of just, they've instilled, just try things. Action creates information. So blog post went out said, coinbase Ventures open for business. We're writing small checks off the balance sheet and really the mandate was very simple. We wanted to help seed this ecosystem around Coinbase as a broader platform and just back great founders who are advancing the crypto economy forward. There really wasn't a plan. There wasn't really a fixed budget or dedicated team, but things just kind of evolved very organically. We had really strong Coinbase employees who are leaving to start their own things, who we wanted to support. We had different projects that we were associated with across the ecosystem. Our own investors and Coinbase bringing us into rounds and fast forward to where we are today. We've made over 500 investments. We're one of the most active, if not the most active investor in the crypto space. We invest off Coinbase's balance sheet. We are a dedicated team within Coinbase and we're operating very much like a traditional venture capital firm with multiple strategies. So we have pre seed seed investing, which we call ecosystem investing. So we do Things specifically around base, but we're completely ecosystem agnostic. We've made many Solana investments and other ecosystem investments where we spend a lot of our time and energy is in kind of a core seed series, a 1 to $5 million check range and then we also do larger strategic investments, growth stage investments and select do liquid token investing typically where there isn't like a traditional private VC round is where we'll activate there. So yeah, highly, a lot of flexibility, continue to deploy capital. What hasn't changed is the overall mandate which is really we're looking for exceptional founders who are going to really move the entire ecosystem and space forward, working on big ideas and return capital over, over a long term horizon, you.

[Brendan]

Know. All right, you might not be allowed to say this but because it's kind of like picking a favorite in a sense. But what would you say has been the most successful or the biggest one so.

[Huli Tejwani]

Far? Yeah, hard. It's nailed it. It's like picking, picking your, your favorite favorite child. But I think what's been really cool about our model and we, I should clarify like we sit completely separate from the exchange and listings process. There's a, there' very firm kind of like Chinese wall arms length relationship. So when we invest we're not investing with any intention or implication around getting listed on the Coinbase Exchange. It's like a completely different process. But if I look back, we've been doing this now coming up on, we'll be coming up on eight years. I think pretty much the major projects or categories for our space we've had exposure to. So like before base was a twinkle in anyone's eyes. We had gotten invested in all the major L2s, optimism, arbitrum, stark, et cetera. When before NFTs were a big thing, we had invested in OpenSea and kind of major NFT projects. We invested in Uniswap before Dexs had kind of proven out and I could come up with dozens of examples like that. I think what's important to us is that we're finding those projects that are like really going to move the space for. And I think we've had a pretty, pretty successful track record doing.

[Bryce]

That. Hey, speaking of which, if you want to see how a top pro makes winning altcoin and crypto trades, Brendan Veeman is doing a live over the shoulder trading session this week. All right. He's going to reveal both the coins that he's watching closely right now and he's going to walk us through his trade ideas, ones that investors could potentially execute on right away. It's like getting what I would call a masterclass in real time, trading for absolutely free. Plus, you're going to walk away with some altcoin picks that might be poised for their next big moves. So here's what all you got to do. Head to www.cryptorevolution.commasterclass to save your spot.

[Podcast Host]

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[Brendan]

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[Bryce]

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[Huli Tejwani]

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[Bryce]

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[Huli Tejwani]

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[Bryce]

Details. And does it, does it like come down to a split between tokens and equity or how are you, you know, how is Coinbase Ventures kind of getting.

[Huli Tejwani]

Compensated? Just like a traditional. It's a good question. Just like traditional venture capital funds. So we'll invest in equity only investments. We'll invest in SAFs that have equity in the future kind of optionality for a token. We can also do direct liquid token investing. So it's really project specific. We hold on the same kind of long term vesting lockups in terms as your kind of tier one financial VCs and kind of operate the same way. It's overall we're not a hedge fund, we're not an active trading shop. When we're underwriting investment we're thinking like five to ten year time horizon. So we're not in the business of kind of doing quick.

[Bryce]

Flips. Yeah, no, that makes a lot of sense. And you know that word underwriting is super key, you know, like and it's a lot different like than underwriting. Like Brendan for instance has a lot of real estate investments and you know, you, you know, there's real estate funds that could, you know, kind of underwrite us, you know, 6 to 8% return Ann or whatever like that. What's the underwriting process really look like at a high level for, for what you guys are.

[Huli Tejwani]

Doing? Yeah, so it's very much stage, stage specific, but pretty similar to how most early stage venture funds would construct the portfolio we're looking for. We use the baseline assumption. The vast majority of these, they're high risk zero to one projects. A lot of them are going to end up being zeros. Some are going to maybe return, if you're lucky, the capital in. But it's really that power law where a handful are these 10 to 100x return outcomes. And that's how we're approaching it. So we're looking at it very much like you have to be able to convince yourself in the, what you have to believe that yes, you know, it's super risky, the most likely outcome is that it's going to fail. But is there that like 10 to 100x upside scenario and are these founders that are in it for the long run that are going to build towards that and that's how we think about it versus at a later stage growth stage type investment, it'll be different thinking. The business model is proven out, there's revenue, the company or project may already be cash flow breakeven. And then you're thinking, okay, there's a lower expected return threshold you have to underwrite to, but also lower kind of downside protection. What the, what the outcome for the business should.

[Brendan]

Be. Do you think more people should look at the crypto market like that? Because we opened up this episode kind of saying, oh, don't look at the price day to day, it'll freak you out. And you know, we don't really care what happens. But I saw you and the team going even a step further and saying, hey, you don't really care about like monthly or even quarterly when it comes to these funding numbers, maybe even price action. You guys are looking like farther out than months or quarters at a time. You know, do you think more investors should kind of look for that when it comes to all crypto investments? Maybe just not just.

[Huli Tejwani]

Early. Yeah, and I'll caveat. I'm saying nothing, I'm, yeah, nothing. I'm saying financial advice or anything like that, but the mantra I repeat over and over and I've been in the space now for a while and have been through multiple cycles, it really, it's all about time Horizon. And we as humans are so, we're so just wired for kind of short term measurement, short term goaling. But look, if you zoom out, if someone's been just small dollar cost averaging into Bitcoin for 10 years, they've done quite well, right? If you bring in the aperture into a quarterly window, if you pick a particular slice, they may look like total idiots, depending on what slice you choose to pick. But that's what I like about our role. Our approach and not being kind of on short term trading side is, you know, it's kind of. Brian has this quote of like if you've been stress, if you're an elastic band and you've been stretched and shrunk a whole bunch of times, the elastic just wears out. And then you can just be super zen and so about it, like super zen really don't, really don't like rotate. Obviously like we're paying attention to market trends and momentum and where things are, but when you've gone through like 80% drawdowns and 80% upswings multiple times and you just kind of focus on kind of like where the secular trend is going over a multi year.

[Bryce]

Period. Yeah, yeah, no, I, I couldn't agree more. And kind of speaking of that, like where do you see the most excitement? What segment of the market? I know there's lots of new, you know, what they call super apps. There's AI agents, there's prediction markets. I mean, where are you guys? I mean maybe even like quantitatively like where you, you know, what's your investment breakdown kind of look like or where are you most excited.

[Huli Tejwani]

About? Yeah, totally. And maybe best way to do is I'll kind of recap where we, what we did in 2025 and then what we're thinking about for next.

[Bryce]

Year. That's.

[Huli Tejwani]

Perfect. And it's a good, it's a good segue on kind of thinking about price charts. Because if I step back, I think this year was one of the most significant in terms of fundamental progress. Like if you look at fundamental indicators across everything for crypto and a lot of that was driven by the increasing regulatory clarity and just like constructive tone in dc. So a lot of this year we were spending in stablecoin, stablecoin related infrastructure, stablecoin powered apps and use cases. And the genius act really was a game changer there where we have clear rules of the road and we saw a ton of exceptional founding talent come into the space leading into that and are continuing to do that. So we've done a lot of Work and a bunch of investing around stablecoins. DeFi continues to be this perennial kind of area for us. There's always some type of new advancement and we made a bunch of defi investments over the past few years that are all bearing out. The other big thing that's happening on the regulatory front is hopefully we have a market structure bill that lands and passes sometime in this administration administration and that's opening up all types of assets that come on chain that have been in this fuzzy kind of gray area. So we're spending a lot of time with real world asset type use cases and different forms of exchanges, dexes, different ways to trade all those things. The other thing I'd be remiss out saying is just prediction markets clearly like have hit massive product market fit. They've gone mainstream depending when this post I know Shane from Polymart was on 60 Minutes last night. I wouldn't put that in my bingo card last year when we were working on the investment there. But like zooming out, crypto has like there's. There's two really killer use cases that are proving out and are showing and showing through from a fundamental adoption perspective. One is like stablecoin, stablecoin related payments. There's just tremendous demand for US dollars denominated assets globally and the benefits are very clear. And I think there's like 10 to 100x penetration potential that we're going to go through around stablecoin adoption. And then on the other side is crypto Superpower is like you can create markets for anything 24, 7 globally. And so prediction markets are a good example of that where you're actually harnessing the speculative properties but creating useful utility, useful information out of that. So that's kind of all over the place but just a hodgepodge of where we were focused and what we were doing in 2025. I can dive into a couple specific things that we're thinking about for 2026 and we just put out a blog post we're trying to get in the habit of doing kind of a little more building in public. We were all at an off site and just kind of whiteboarding different ideas and things, themes that we're excited about. We want to find the right teams to back. So one broad topic we're thinking about is per perps and purification for everything. So I'm not sure how familiar the audience is with perpetual futures, but this is really like one of those interesting accidents of crypto's market formation that has turned out to be it's really killer Instrument with killer product market fit like traders love perps, market makers, institutions like it's a killer instrument. And now we're seeing a world where we think everything can be purpe. So every type of asset that you would normally trade could be brought onto perps on chain. So we're excited about that. A couple investments there. One top of mind I can't announce just yet, but it'll probably be out when this gets posted. Second, continue on that prediction market trend. The next level of this, of where the prediction market world is going is advanced trading terminals. So you have multiple prediction market interfaces but it's still really kludgy for I won't say an advanced trader, but just a little more beyond the casual speculator to interface across all of them and find different opportunities. So we're excited about kind of sharp tools if you will for, for prediction markets that aggregate liquidity across all these different venues. In Defi. One big area we're excited about is under, under collateralized credit. So like the defi lending model to, to date has been the over collateralized model and it's, it's worked well, it's great. But now we're at a place where can we actually bring in and like form some type of like on chain credit score and open up how credit is done in defi and that can be massive. Two more I'll hit is privacy. That's a big theme for us. We've gotten to this phase where there's institutional adoption, bitcoin. It's crazy for me, I was driving into the office and first thing on Bloomberg they're talking about bitcoin price and a few years ago like how is this in the top of the mainstream kind of press media? So we're at a place where it's become mainstream but now folks are catching on the privacy components and attributes of how this all originally started. And kind of the cypherpunk ethos matters and figuring out privacy while also balancing compliance matters. And so there's a whole bunch of different approaches and solutions that we're looking at there. And then last would be remiss without saying AI and robotics AI absorbing everything, changing everything. We think blockchains and crypto are going to play a very complementary role into that secular trend. Whether that's from things like proof of humanity. How do I cryptographically prove that the three of us are actually real humans having this conversation right now versus it being my AI avatar? How can you use crypto and blockchain networks to incentivize Data collection and things like robotic model build outs and then all the types of on chain development, security things you can do with AI. So it's a big category, but those are kind of flavors of where we're looking to find the right.

[Bryce]

Teams. Man, that's no small task. And I imagine you guys are quite busy there kind of. I mean I. Are you guys like, I'm just trying to think of the investment process. Like are you guys going out and hitting all these conferences and collecting business cards and like learn, you know, doing a lot of outreach or do people just come to you and say, hey, here's my. And you got to have the selection of like, okay, I'm filing through this. And you really get that, you know, that Panopticon sort of view of the entire market because everybody's sending you their pitch.

[Huli Tejwani]

Deck. Yeah, good question. It's, it's definitely a combination of both. We're fortunate with kind of the broader Coinbase employee base, our network, kind of our investor relationships that we do get a lot of interesting stuff sent to us. But there's always a fight for quality and like the highest, you know, deals are the highest quality deals are always super competitive. So there's a lot of outbound hunting that we do as well. I think we try to be very thesis driven. So we will pick a category, really try to drill it down to like first principles, try to understand what would we want to see built in this and what would we get excited about in investing behind. And then we go out with prepared minds and then it's all about the interception of. You can have a great idea, but if you don't have the right founding team, it's not a, it's not a fit. You can have a killer founding team. I would always bet on the killer founding team with like a B idea that they'll figure it out and get to the AI idea. So that's the limiting reagent is finding like long term mission oriented founders who have the right technical DNA, the right team formation DNA. And so it's land, sea and air. We're looking, we're scouting, we're reviewing and trying to find those folks wherever they.

[Brendan]

Are. Yeah, I mean clearly a lot going on and I think it's hard to bet against infrastructure. That kind of seems to be like what we're getting at is that there's all these areas of growth and there's all these different things that can happen and I mean there's still so much to do as well. I think that that is What I hope is one of the main takeaways from this episode is that people are listening in. I mean, and you just gave like four absolutely honed in ideas that I think people should be writing down. And if you missed it, go back re watch it and come back to where we're at right now and fast back forward. But one of the things that we noticed is that small caps have kind of lagged behind the large caps in the crypto market this year. And that's been one of the standouts that I think threw a lot of people for a spin. Have you seen any correlation between that and early stage.

[Huli Tejwani]

Investing? Yeah, it's a good question and good observation. I wouldn't say there's necessarily a correlation with early stage investing. We're coming in at, you know, really like the idea early, early formation stage. The observation you, you're making, which I do agree with, is like, look, five years ago there were what, like 200, 300 tradable tokens. Now there's literally like a million being generated every day. So there is this like dispersion of liquidity and eyeballs. And I think we're in a world where there's going to be infinite amount of tokens to trade. So it just comes back to that power law thing, right? So within that, if you treat small caps as like a broad basket, it may be down year on year, but I would wager that if we unpack that down, we could find, you know, handfuls of there's massive returners within that. Within that.

[Brendan]

Group. Yeah, 100%. Because you look at a lot of the projects that, that have blown up and there's still been so many of them that have gone from, from not being a token at all to being an idea or a platform, to then launching and becoming these multi hundred million, if not billion dollar projects. I mean, look at Pump Fun, Hyper Liquid, the list goes on, right? And all these projects do this. And you know, I asked that because the early stage and what you guys do is like two steps before a small cap, right? Because you have large caps, you have mid caps, you have small caps, you have micro caps, and then you have the early stage, which is before something can even like really be a micro cap or a small cap, it has to go through you. And so I didn't know if there's any kind of correlation over there, but I mean it seems to be that you all are not discouraged, but quite the opposite. I mean, quite excited going into.

[Huli Tejwani]

This coming year, we're more bullish than we've ever been. Again, from a fundamentals perspective, like regulatory climate is 180 degrees better than it was a few years ago. Number of wallets are growing, number of active users are growing. The, you know, the fundamentals for like the core L1 chains all look really positive. The number of developers are growing like it's stablecoin adoption. Like the volumes are just going through the roof. So it's, yeah, the like fundamental usage and adoption of the technology and assets is like progressing forward. And we've got a constructive regulatory climate. We've got the developer tooling and the infrastructure is at a place where you can create applications that get to Internet scale. That wasn't true four years ago. So again, if you zoom out onto a 5, 10 year horizon, this is definitely, we're super excited and we've always consistently deployed with a very, very high conviction on our deployment for the next couple.

[Bryce]

Years. Yeah, I love that. I was thinking kind of back to like the Clarity act. You had mentioned that and also kind of, you know, gave us some color on, you know, the regulatory climate increasingly, you know, getting better. And the Clarity act is something that I think a lot of people aren't super clear on. You know, ironically, just like a lot of like, you know, our listeners or that sort of thing. And so I was wondering if you could kind of like let us know a little bit about what the Clarity act should be doing for the market and why it's good. And then also if you could color it a little bit with just like this idea that like is the Clarity act, you know, if it allows these big institutions to start playing in the market, is it then going to edge out a lot of the current market participants, the small caps or these other people that are trying to build real defi projects is like, well, if the Clarity act pass and JP Morgan could have a dex or whatever, if that's what it means, does that mean uniswap dies or.

[Huli Tejwani]

Whatever? Great question. So I'll preface with saying we've got exceptional folks like Paul Girl at Coinbase who's way more wired into where things actually stand. And the bill's still being worked in workshop between both houses of Congress. But what ideally for me as a venture investor, the outcomes for Clarity would be is one, we just have clear rules of the road of which agency in the U.S. 1, how are we defining all these different tokens and crypto assets? What's security, what's a commodity, what's something in between? What's a net new definition. Who's actually the Responsible regulatory agency. Right. Because we had this just completely confusing set up for so many years where we don't even know who the cop. Right. Cop is and the cops can't even agree with themselves like who has jurisdiction or what. What will. A second piece that will be very powerful. And we're seeing. I'm seeing very positive trends around some of the kind of no action letters that have been coming out of the SEC is that. But for years we had this very ambiguous setup around tokens and how value can actually go back to token holders. And if you trip a certain definition from the 1930s, then you're out of bounds. If you don't, then you're in bounds. And so having just a very clear framework in place of like okay, how can you actually register something? When do you need to register something to be compliant? I think that brings. It just opens the design space for these smart contracts token instruments to just be not artificially constrained in what they do and how they can bring network revenue back to a token holder or do buybacks and burns as financial instruments. It becomes a lot clearer and something you can wrap your head around, underwrite. And then the last point we're investing a lot in this at Coinbase is the whole idea of on chain capital formation. So you probably saw recently acquired Echo, we recently did first retail presale for Monad on Coinbase. And I think that actually flips my world completely upside down. Where the normal venture model is, hey, I'm going to raise a bunch of cash, burn a bunch of cash and hopefully find product market fit. Now projects will be able to just be able to go and raise capital on chain for their project and tie the actual fundraising activity to activity on their network or platform and it kind of inverts my world totally upside down. I'm excited for that because I think it's just more experimentation, more projects getting funded, more interesting things happen. But a lot of VCs are going to have to rethink how to operate if we're in better version of ICO 2.0 World in the coming years. Does your child dread going to school every day? It's time to try Oregon Charter Academy. Our online school offers interactive learning in a safe environment with a dynamic and responsive curriculum. Providing your student with support to thrive will bring you relief knowing you found just what your child needs. Don't wait. Enroll [e-mail] and see the difference it makes for your child. Oregon Charter Academy what learning should.

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[Bryce]

Done. Yeah, no, I'm super hopeful that there's just more opportunity for the everyday person. And speaking of Monado, you know, did you guys view the launch as a success? You know, how did it go? And could you give our listeners a little bit of color on you know, how they might participate in the next one that is on echo or.

[Huli Tejwani]

Sonar? Yeah, so I'm, I'm not super close to. Wasn't super close to that launch and kind of have the same kind of perspective as any of your listeners probably. I'm sure there were like lessons learned, the things they would optimizer do differently. But overall I think it was definitely a success. The impetus and spirit there was to allow a more equitable and democratic distribution of the kind of token and I think that was achieved right by making it available to coinbase retail participants with specific rule sets and kind of discouraging the farm and flip behavior that has killed so many projects and really kind of distribute the holder base. Again all about time horizon. So I think it's viewed very much success. The amount of capital is raised for the project, the distribution of the Holder base and just being able to get out the gate and do this compliantly and legally in the United States. It was a big first. I'm sure there's a bunch of lessons that the team will be incorporating for future raises to participate. Sign up for coinbase coinbase.com account and I'm sure there will be more in the future. Do your own research, have your own perspective. All the information is out there and public and yeah, just Find there will definitely be more opportunities like a big. Our core mission at the broader companies. Increasing economic freedom and kind of democratizing how cap like these early stage capital formation events happen is a big part of that. Right. If so many people have been locked out of wealth creation in the United States because of what I think are like very outdated credit investor laws and companies stay private longer and, and all that stuff that. Yeah, at the end of the day that's we're trying to break down those barriers and just increase access for.

[Brendan]

Everybody. You know, one of the interesting things that we have observed this year is we just had the bitwise guys on Ryan Rasmussen and Matt Hogan and one of the things they said is that this has been the year of the crypto IPOs and it got me thinking. Just the number or the quantity of how many crypto IPOs that have come out this year. Has that in any way affected the way that you look at venture capital or does that change your perspective? Perspective when it's like a really crazy year, like an all time high year like this one, or maybe if it was the opposite, would that be something that affects the way that you look at.

[Huli Tejwani]

Venture? It's a great question. So markets are cyclical. IPO windows open and close. We definitely are coming out of or are still in a very healthy IPO window. I think overall it's just been really healthy for the space for a long time. I had to respond to folks like what's the public market equity outcome story in crypto outside of Coinbase? And it was like, well, we're waiting now. There's a whole bunch of examples. Right. So from a venture investor perspective, it's more fuel on the fire of saying, okay, if you build a robust equity business, there is an IPO window for exit outcome. You could also be doing a token token business and have liquidity through a different format. But it just kind of de risks long term. Like how do you, how you think about like long term outcomes to have that healthy IPO activity for, for the crypto.

[Bryce]

Sector? Yeah, no, it's, it's a, it's a really interesting sort of contrast that, that I see is like, you know, obviously like a lot of these guys, you know, not to put circle on the spot, but that was certainly in my opinion the biggest one. Where these guys have been early builders, they, you know, created a really valuable idea of like, hey, let's have stable coins, let's make them super regulated in the U.S. we got, you know, USDC, let's get good liquidity all that kind of stuff. And so, you know, they played their cards right, they made a bunch of money. Right. And so now all of these, you know, investors out there that are looking at their options of like, hey, are we going to buy, you know, Bitcoin and Ethereum or any of these other, you know, coins out there, or are we just going to go buy, you know, Circle stock or are we just going to go buy Coinbase stock or any of these other equities? It's like, how do you kind of pair the two in your mind of like the investable universe? Does it like kind of shrink? Because now that there's like all these equities that are crypto related and crypto backed, does that kind of obviate or get rid of the need for all these tokens or do you think they're still going to.

[Huli Tejwani]

Coexist? I think they totally coexist. If anything it just expands the investable universe. Right. Like a Coinbase or Circle. Those are traditional enterprise value creation businesses like you get quarterly financials and cash flows and revenue. And the businesses are geared around the broader crypto markets and underlying assets and technology. But each one has its own kind of different strategies, performances, margin profiles, et cetera. That doesn't change the case for Bitcoin as a store of wealth hedge on inflation. It doesn't change the case for hyper liquid as a on chain perps Dex or Morpho as your kind of borrow lend defi protocol. So they're all somewhat correlated and interwound but it actually just grows the investable universe and different tax treatments for different types of assets, different institutional players can participate in certain types of things. Capital can match what it needs to match. But yeah, it definitely does not come at the cost of the token side of.

[Bryce]

Things. Yeah, no, that's interesting. Yeah, I mean the more options, the more well capitalized folks like Circle and Coinbase are, the more opportunity they're able to reinvest in the industry, build out new infrastructure like Brennan mentioned. So it's, it's incredible what's going on and you know, I'm hopeful that we continue to see more crypto IPOs and more ICOs as well. I mean, because that's what's interesting is like now that we have, you know, echo or so actually I also, I might ask you to help us delineate between Echo and Sonar because I've seen both of those words but you know, more capital formation across the board, both in equities and in tokens. So I think it's just going to, you know, keep expanding. But yeah, tell us a little bit about the difference between Echo and.

[Huli Tejwani]

Sonar. Sure. So related, related products. Echo is think of it for private sales pre token Genesis launch. We actually we stood up a basic ecosystem group on Echo last year and we were kind of dogfooding it and using it ourselves where think of it almost like an on chain angel list where participants are accredited, have gone through like particularly KYC process and then think of Sonar as an actual like token sale and distribution platform. So that's, that's a short shorthand way of it. But, but both kind of related and trying to solve for the same.

[Bryce]

Thing. I love it. No, that makes a ton of sense. You know, one of the things kind of as we, as we wrap up, you know, I've heard about the PayPal mafia, but now there's a new mafia in town. The Coinbase mafia is this, have you heard of this.

[Huli Tejwani]

Term? Have heard of this term. I'm still trying to figure out if like mafia is the right branding or if there's like another synonym out there that I've coinbased. Nefarious overtones. The alumni. Yeah, the alumni. No, it's a super powerful network and set of folks. So fun fact, we've. There's over 100 startups now that have been founded by Coinbase alums. Wow. We've invested in almost half of them. And I think you know, Coinbase has been this just talent density hub for, for folks for many years who are convicted on the space high technical bar or business acumen bar to be here and the founders of the company really instilled a very heavy like entrepreneurial startup up DNA culture. It's how we operate now and even as like a more scale platform and it seeps down into the employee base. And so I could list dozens of examples of Farcaster, Dan Romero, Jacob Horn, Zora, Zach Abrams at Bridge, who was acquired by Stripe. It's really cool and fulfilling for me to see that kind of full story where we have great folks here, go out, start their own thing and then have impact in the broader industry. So yeah, if you're, if you are, my plug would be if you're thinking about founding or starting something in crypto. Not exactly sure. And want to have like your MBA in crypto. Like Coinbase is a great place to spend a couple of years with great folks and then the data shows that it's a great kind of set of cohort of founders and outcomes coming out of.

[Bryce]

Here. Yeah, I mean you, you Just named off, you know, a list of some, some great Coinbase alum, you know, and you've got such a unique vantage point to speaking with a lot of these founders and other founders as well. And a lot of people who watch our show are trying to start up on their own, right. They're trying to, you know, break into the industry or, you know, get a new job or whatever. But I guess the question is like, what do you see as some of the common threads of these, you know, ultra successful founders and you know, what do you look for in founders when you are making these.

[Huli Tejwani]

Investments? Sure, I kind of hit on it earlier. But first and foremost is like intrinsic motivation. It's like you can't replace that and replace that and it's like it's that whole missionaries versus mercenary thing. Like you can, you can make a fast buck in pretty much any kind of space. You could also lose a lot of money in any space. Are you or are the founders oriented towards like building something substantive and have like a long term horizon that is like kind of baseline? Typically find a good co founder that get through the de risking of like co founder breakups and stuff early on. And typically, you know, when we're looking at co founding teams, we're looking for at least one to be technical. Like you need to have the ability to kind of code and ship and prototype your idea rapidly and that just accelerates velocity. And then the last attribute, it's a big part of Coinbase culture, it's actually like clear communication because clear communication is a direct indicator of clear thinking. And so can you articulate something very complex in a very short amount of time in a way that explain like I'm five, that's a superpower I think, especially in our space and it translates to how you're going to attract talent and hire folks and make your first sales and communicate and market your project. So that's another kind of key attribute we're looking for. Well.

[Brendan]

Holy. I mean You've made over 500 investments now with Coinbase Ventures. It's an impressive amount. I think it's 500 more than most people can say. But like what are some of the biggest lessons that you've learned going through all.

[Huli Tejwani]

This? Yeah, great, great.

[Brendan]

Question. Putting you on the.

[Huli Tejwani]

Spot. Yeah, some, some lessons. It's easy to be contrarian. It's hard to be contrarian and. Right. So you know, that's, there's a, there's a bias in early stage VC folks to just like always have the contrarian view. But contrarian Right. Is. Is different. Two lessons. Don't index on social proof. Like it doesn't matter who else is leading the round or what this person says about you. We you can have big outcomes or you know, bad outcomes either way. And yeah I'm trying to, I'm trying to think of a few more global like the talent in this space comes everywhere does can look anyway anywhere. It can have no pedigree, some pedigree like a like ton of pedigree but you know look at what people have built and shipped and kind of that's the proof in the pudding and yeah and last is just like the space moves fast. Don't like always check your priors. Maximalism isn't. Isn't the route you've got to always. It's like the Marc Andreessen line of strong opinions weekly held and constantly be re updating your assumptions or your posture based on the new information that's always coming at.

[Bryce]

You. I love.

[Brendan]

That.

[Bryce]

That's. Those are some great, great learnings for our audience and for ourselves for our own personal portfolios and man it's been a tough year But I think 2026 has a lot of brightness shining stars ahead, you know any, any last words before we let you go? What we should be looking forward to in 2026. Anything that we should be looking out for from your guys.

[Huli Tejwani]

Camp. Yeah, again I'll just, I'll recap with like it may feel like a tough year 2025 but from a fundamentals perspective it's as bright as ever. We're actively, we're excited and we're as bullish as ever deploying it really is all about time horizon. Don't get caught up in the weeklies, the hourlies, the five minute chart and just I encourage everyone to just like zoom out. If you zoom out it puts a lot of things in perspective. There will, there will certainly be things that you know, be greedy when others are fearful, be fearful when others are greedy. If we do go through some market turbulence, there will certainly be things that have like 10 to 100x future outcomes and it's just all about having conviction and having kind of a first principles view on how you approach this stuff. So yeah and if you are interested in working in any of those areas that we share in the blog post, we'd love to hear from you. We're actively looking for the right teams to back on those ideas and we'll keep sharing.

[Bryce]

Ideas. Man, that sounds great. I guess. Last question. Where can people follow along on your journey? Do you have a X account or are you posting personal writings.

[Huli Tejwani]

Anywhere? Yeah, I need to get better about the personal writings, but I'm at Hooley. G H O L I E G on X and you can always look for the Coinbase blog. And that's where Coinbase Ventures blog and we'll be. We'll be more active sharing some stuff out there next.

[Bryce]

Year. Beautiful. All right. Well, Julie, we greatly appreciate you spending the hour with us, everybody at home watching. We also greatly appreciate you tuning in on your way to work or doing whatever. Whatever you're doing. So come back same time, same place next week because I promise we're going to have some more incredible guests for you. Enjoy this holiday season. However you're celebrating, we wish you the best. And same goes for you.

[Huli Tejwani]

Julie.

[Bryce]

We. We hope you have a good one with your.

[Huli Tejwani]

Family. Appreciate.

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