- Buy Crypto
- Markets
- Futures
- Spot
- Copy Trade
WE-Launch
7 years later, the $4.2 billion largest funding project in history announced its failure
Today, EOS has rebranded to Vaulta.
The ancient public blockchain that made a grand entrance seven years ago with a year-long extravagant fundraising, once hailed as an early "Ethereum killer," has finally abandoned its dream of achieving millions of TPS and announced a shift towards Web3 banking. The grandiosity of its $4.2 billion fundraising, the buzz of 21 super node elections, and the utopian declaration of a million TPS have now been pieced together as the most expensive idealistic experiment in blockchain history.
Seven years later, apart from long-time hodlers, no one mentions this "ancient public blockchain" that now ranks 97th by market capitalization. Going forward, EOS is no longer a high-performance public chain; it has undergone a transformation, attempting to pivot towards Web3 banking business—it has relinquished its once-proud dreams, even forsaking its name.
We use this article to document the most insane product of the ICO era, one that burned so much money, leaving behind a poignant story.
A Tower of Babel Built with Code and Dollars
In 2017, the blockchain industry was experiencing its wildest bull run. Bitcoin surpassed $1,000 in early January and skyrocketed to $20,000 by the year's end. Ethereum's smart contracts completely transformed the crypto world, and ICOs (Initial Coin Offerings) became the hottest fundraising method, with hundreds of projects flooding the market, all striving to build a "decentralized future."
Amidst this capital frenzy, EOS emerged with the banner of "Blockchain 3.0," raising the flag of "Ethereum Killer." Its whitepaper depicted an ideal world: a million TPS (transactions per second) to completely solve Bitcoin and Ethereum's scalability issues; zero transaction fees so that regular users wouldn't have to pay expensive gas fees, making on-chain transactions as smooth as cloud applications; ultra-fast block production, with 21 super nodes responsible for transaction processing, no longer hampered by miner competition; a blockchain supercomputer to make decentralized applications (DApps) a reality.
Founder BM (Dan Larimer) was EOS's biggest asset. For the tech-savvy, he was a genius—suggesting a change to the consensus mechanism to Satoshi Nakamoto just a year after Bitcoin's launch, arguing that PoW (Proof of Work) was not efficient. Later, he created BitShares and Steemit, becoming one of the most well-known engineers in the crypto world. But BM was not just a tech geek; he also had utopian idealism. He believed that blockchain could change everything, and EOS would be the ultimate solution for human societal structure.
With a brilliant CTO and a top-notch marketing team, the ambition of this story was already on the table. On June 26, 2017, EOS began its crowdfunding, planned to last for a year (in contrast, most ICO fundraising periods lasted only weeks to a few months).
Global investors flocked in and raised 185 million USD within 24 hours. In the end, EOS successfully raised 4.2 billion USD, becoming the largest fundraising in the history of the crypto world, far surpassing all projects at the time, including Ethereum's 18.5 million USD.
Top 10 ICO Projects of 2018
With 4 billion USD, EOS leaped to become a super capital entity in the crypto world.
In April 2018, EOS's price surged from 5 USD to 23 USD, a 360% monthly increase, propelling its market value into the global top five, second only to Bitcoin, Ethereum, Ripple, and Bitcoin Cash. Media hype escalated, with headlines such as "EOS Will Become the First Trillion-Dollar Cryptocurrency" and "BM Is the Next Satoshi Nakamoto" flooding the scene. Ethereum developers also began to feel anxious, fearing that EOS's rise would lead to Ethereum's decline.
During this year, before the EOS mainnet launch, it had already become the hottest star in the crypto world. Driven by the FOMO (fear of missing out) emotion, EOS was considered the "next-generation Ethereum," with some even predicting it would reach 1,000 USD.
The Super Node election became a global sensation, with key figures like Li Xiaolai, Lao Mao, and other "godfather-level" individuals making high-profile entries. Exchanges, mining pools, Wenzhou Capital, and even traditional funds flocked in — this election was dubbed the "Wall Street IPO of the blockchain." The three countries of China, the U.S., and South Korea engaged in a "crypto country war," with the Korean community chanting, "Not investing means not being Korean." Li Xiaolai's Coin Capital held four nodes, while the Wenzhou group entered with an eight-figure EOS spree.
With a 4 billion USD fundraising, a star-studded project, a dark horse public chain, garnering attention from all quarters, and BM being picked up in a luxury car by the project team at the Hong Kong airport, everything seemed so perfect. However, beneath the grandeur, everything was built on a tower of code and dollars.
EOS's Peak Was Only the Beginning
Amidst fervent enthusiasm, issues had already quietly emerged:
EOS's voting system was questioned for being easily controlled by whales, the decentralization of the Super Nodes was doubted; post mainnet launch, various technical issues arose, developers began to question EOS's stability; deep involvement of exchanges and capital giants made the Super Node election no longer fair, and the community began to have differing voices; after BM launched the mainnet, frequent changes to the governance mechanism caused community turmoil.
However, at that time, the market was still immersed in euphoria, and all doubts were overshadowed by the slogan "EOS is about to change the world." During that golden age, everyone believed that EOS would become the future overlord, even the ultimate form of the blockchain industry. However, reality is often crueler than dreams, and no one anticipated that this once highly anticipated project would fall from grace in just a few years.
Tech Disillusionment: From "Million TPS" to "Distributed Database"
At that time, the biggest problem facing blockchain was scalability, how to process more transactions per second. The Bitcoin network could handle 5 or 6 transactions per second, and Ethereum was a bit better, at roughly 20 transactions per second. However, these numbers were far from sufficient for blockchain's usage requirements.
In this context, EOS's million TPS capability drove everyone crazy. It's worth noting that during Alibaba's Double 11, the peak transaction volume was hundreds of thousands per second.
However, after the EOS mainnet had been live for 4 months, the highest TPS reached was only 3996, far from the promised million.
While EOS fell far short of expectations, on the other hand, Ethereum gradually improved its performance through Layer 2 scaling solutions, and competing chains like BNB and Solana quickly rose to prominence, completely erasing EOS's "performance advantage."
People discovered that the so-called "million TPS" was actually a carefully crafted word magic trick—BM quietly added a premise to this number: it must rely on an infinitely scalable sidechain ecosystem. In his vision, if one chain could handle 4000 transactions, 100 parallel sidechains could achieve 400,000 TPS. However, in reality, by 2023, the EOS ecosystem only had 3 sidechains live, with two becoming "ghost chains" due to developer exodus. BM's response to this was to pivot on Twitter, announcing that he was "studying anti-inflation algorithms," while at this point, EOS had fallen out of the top 20 by market cap.
Usability was the core issue with EOS.
Initially, EOS hit a user pain point with free transactions. Users quickly found out that while EOS transactions were feeless, they had to stake tokens to exchange for CPU resources. During network congestion, transferring 10 EOS required staking the equivalent of 5 EOS in CPU resources—essentially a form of freezing user funds. During a DApp traffic peak in 2020, 2000 EOS could only exchange for 1.3 seconds of CPU time; regular users needed to repeat the process more than ten times to complete a transaction.
Furthermore, BM also set a RAM supply limit, which led to RAM speculation in the market, causing RAM prices to skyrocket by 100 times. Developers had to spend a high cost to purchase storage resources. In 2018, some speculators started hoarding RAM, and within a few months, the RAM price surged from 0.01 EOS/KB to 0.9 EOS/KB, severely impacting DApp development, with many new projects directly giving up on EOS.
Ultimately, this resource management model made EOS's user experience even worse than Ethereum's: on Ethereum, users can directly pay Gas fees to complete transactions; but on EOS, users must first learn complex resource staking mechanisms, and even have to spend a hefty price to buy CPU and RAM, leading to a severe hindrance in DApp ecosystem development.
From today's perspective, it is actually difficult to understand how, despite such a poor user experience, EOS had a boom period in late 2018 and early 2019: DApps mainly focused on on-chain gambling were very popular on EOS.
On December 24, 2018, data showed that in the past week, comparing the overall DApp ecosystem of the top three public chains ETH, EOS, and TRON, the following were observed: Total number of users: EOS (75,346) > TRON (45,777) > ETH (33,495); Total number of transactions: EOS (23,878,369) > TRON (13,803,322) > ETH (413,019); Total transaction volume (USD): EOS ($345,489,773) > TRON ($135,201,171) > ETH ($44,272,856);
This indicates that at that time, the EOS community indeed had high expectations, and its ecosystem surpassed ETH and TRON. Perhaps it was this "daydream," which now makes veteran players in the crypto space nostalgic when recalling EOS.
Governance Failure: Vote Buying, Centralization, and Community Division
Of course, when we talk about governance now, it seems we can only smile wryly, but at that time, EOS's governance was highly anticipated. BM firmly believed that under his careful design, 21 nodes would make this network far superior to Ethereum.
He believed this network would have 2/3 good actors, everyone's behavior would be benevolent, and nodes behaving in bad faith would be voted out by the users. It was a perfect utopia. In reality, he was overly naive.
After 3 months since the EOS mainnet went live, node mutual voting has become an unwritten rule. In order to receive EOS block rewards, no one can stop the mutual voting between whales and nodes. What is even more outrageous is that the nodes themselves engage in misconduct.
EOS operates with a mechanism where 21 super nodes take turns producing blocks. At one point, a user had their funds stolen by a hacker. The solution was for the 21 nodes to blacklist the hacker's address to prevent further transfers. This was a normal and simple operation, but one of the nodes did not comply. As a result, the hacker was able to transfer the funds while that particular node was producing blocks, acting as if nothing had happened.
Brendan Blumer (BM) once attempted to regulate these behaviors through an EOS constitution but quickly found that the constitution had no teeth. Since the super nodes themselves benefit from bribery, they have no incentive to enforce the rules outlined in the constitution. The arbitration mechanism is completely ineffective and lacks any real enforceability.
In 2019, BM completely abandoned constitutional governance and announced that the EOS community should evolve freely without interfering with the election of super nodes. By 2020, EOS's super nodes had devolved into a battleground for exchanges, mining pools, and capital conglomerates, rendering the votes of ordinary token holders meaningless. Delegated Proof of Stake (DPoS) was supposed to be a model of decentralized governance but has turned into a version of oligarchic politics in the crypto sphere.
On the governance front, EOS faced a major issue: before the EOS mainnet went live, BM proposed an innovative "EOS Constitution" aiming to use code plus rules to constrain behavior on the network. However, within a few short months, the constitution underwent multiple revisions, leading to growing community discontent. In June 2018, EOS's original constitution allowed super nodes to arbitrate transactions, but due to power abuse, BM decided to amend the constitution weeks later, prohibiting nodes from intervening in transactions. In 2019, BM suddenly suggested abolishing the constitution and switching to "user contract governance," throwing the community into chaos as they were unsure how EOS's governance rules would evolve. This ever-changing governance model caused developers and investors to completely lose trust in EOS.
During this crisis, BM and Block.one (EOS's parent company) gradually shifted their focus from the EOS main chain to the EOSIO software. BM believed that "the future of blockchain lies in enterprise applications," thus starting to promote EOSIO for enabling enterprises to build their own private chains rather than focusing on optimizing the EOS public chain. Core updates to the EOS main chain almost came to a halt, with many crucial upgrades like cross-chain functionality and storage expansion being delayed.
As a result, EOS's developer ecosystem experienced a sharp decline: while the Ethereum community thrived with high activity and the emergence of applications like DeFi and NFTs, the number of DApp developers on EOS gradually decreased. By 2022, EOS was losing nearly 100 developers per month, and some EOS browser and wallet projects even shut down permanently.
External Strangulation: Miner Exodus, Bear Market, and Block.one's Silence
By the end of 2019, the price of EOS had dropped below $5, reaching a low of $1.8 the following year, plummeting over 90% from its all-time high of $23. As super nodes faced a survival crisis, developers fled, and market liquidity dried up, the EOS ecosystem was in desperate need of help from its parent company, Block.one.
As we all know, early on, Block.one raised $4 billion, becoming the largest funding event in crypto history. In theory, this funding could support the long-term development of EOS, support developers, drive technological innovation, and sustain ecosystem growth. When the EOS ecosystem developers begged for assistance, Block.one produced a $50,000 check—a sum of money that wouldn't even cover two months' salary for a Silicon Valley programmer.
"Where did the $4 billion go?" the community asked.
In an email sent on March 19, 2019, by BM to Block.one shareholders, part of the answer was revealed: as of February 2019, Block.one's total assets (including cash and invested funds) amounted to $3 billion.
Of this $3 billion, around $2.2 billion was invested in US government bonds, which in the email were also referred to as "liquid fiat assets."
Some information about the invested funds can be found in public records: game company Forte, NFT platform Immutable, and a vacation hotel in Puerto Rico, among others. In summary, the companies that were invested in all had one thing in common: they had little to do with EOS.
Even before Bullish became a core business, Block.one still held an ace—the social product Voice, deployed based on EOSIO smart contracts, which was the only product related to EOS. To build Voice, Block.one invested $150 million. Additionally, the largest expense was $30 million spent on acquiring a domain name, with the seller being MicroStrategy, the publicly traded company holding the most bitcoin, as mentioned earlier.
However, it seemed to be a curse of fate. The first launch event for Voice lasted half an hour, did not meet expectations, and received much disappointment, causing the price of EOS to drop consequently. Half a year later, on the day Voice's iOS version was launched on the Apple Store, various malfunctions and Bdangsug occurred. The Voice website displayed "Error 1020" and stated the site was "using a security service to protect itself from online attacks." EOS holders were utterly disappointed, and Voice finally announced in September 2023 that it would gradually shut down.
Project Launched by Block.one
The thunder is loud but the rain is sparse, which seems to be Block.one's consistent style when it comes to investment in projects. Since then, Block.one has not made any major investment moves and has fully embraced a low-key approach. Today, Block.one holds 164,000 bitcoins, indicating that its net worth has grown from $3 billion in 2019 to the current $16 billion, a fivefold increase, making it a liquidity management master.
Without any concrete DeFi, NFT, or DApp ecosystem support plans, in stark contrast, the Ethereum Foundation and Solana Foundation have been continuously subsidizing developers to drive technological innovation, while Block.one has done almost nothing.
An early EOS investor expressed anger on Reddit, questioning, "When we invested in EOS, it was because it promised to disrupt the blockchain, not to let Block.one use this money to speculate on Bitcoin!"
Although Block.one currently holds the second-largest amount of Bitcoin after MicroStrategy, with a total of 160,000 BTC worth $16 billion, EOS, which has received no support from these massive funds, continues on a downward trajectory.
The governance chaos at Block.one is even more astonishing. Block.one is increasingly resembling a "family business" centered around CEO BB, with BM not part of this family.
Sister as CMO: CEO Brendan Blumer's sister, Abby, was parachuted in as Chief Marketing Officer, and her only visible "achievement" was to change the EOS brand color from tech blue to a "softer Pantone Cool Gray."
Mother in Venture Capital: Blumer's mother, Nancy, runs the EOSVC venture capital fund, and the social app Voice, which she led, has been online for a year with less than 10,000 users, despite burning through $150 million.
BM's Puppet Show: Founder BM confessed on Twitter that he has "no decision-making power" and can only watch as the team pours resources into the enterprise-grade toolkit EOSIO — a project tailored for giants like Walmart, completely unrelated to the EOS mainnet.
In 2021, the community initiated the "Forking Rebellion" to try to sever Block.one's control. The EOS Foundation, as a community representative, stepped forward to negotiate with Block.one. However, after a month of discussions where various solutions were explored but not agreed upon, the EOS Foundation, in conjunction with 17 nodes, revoked Block.one's power and removed them from the EOS leadership. Without its parent company, EOS started to resemble more and more a DAO.
Following the split between EOS and Block.one, the EOS community engaged in a years-long legal battle over the ownership of the funds raised initially. As of now, Block.one still retains ownership and control over the funds.
Even more ridiculously, since 2024, BM's Twitter content has almost completely veered away from blockchain topics, with the only technical discussion being sporadic mentions of database optimization. Instead, his focus has shifted entirely to theological evangelism, with content heavily concentrated on interpreting the Bible, world-ending prophecies of geopolitical conflicts, and criticisms of mainstream Christianity...
BM's Twitter content
Looking back at this seven-year-long crypto epic, EOS's collapse serves as a stark warning: no matter how high the TPS, how sophisticated the resource model, or how complex the user experience to the point of deterring the average person, it will all be meaningless. The once self-proclaimed "Ethereum Killer" ultimately perished in the quagmire of its own economic model, governance chaos, and technological stagnation.
Seven years ago, EOS raised a whopping $4 billion in crowdfunding, once hailed as the most glorious financing miracle in blockchain history; seven years later, its story has become one of the biggest "jokes" in the crypto world.
In the end, EOS did not kill Ethereum; it killed itself first.
You may also like
$COIN Joins S&P 500, but Coinbase Isn't Celebrating
On May 13, S&P Dow Jones Indices announced that Coinbase would officially replace Discover Financial Services in the S&P 500 on May 19. While other companies like Block and MicroStrategy, closely tied to Bitcoin, were already part of the S&P 500, Coinbase became the first cryptocurrency exchange whose primary business is in the index. This also signifies that cryptocurrency is gradually moving from the fringes to the mainstream in the U.S.
On the day of the announcement, Coinbase's stock price surged by 23%, surpassing the $250 mark. However, just 3 days later, Coinbase was hit by two consecutive events: a hack where employees were bribed to steal customer data and a demand for a $20 million ransom, and an investigation by the U.S. Securities and Exchange Commission (SEC) into the authenticity of its claim of having over 100 million "verified users" in its securities filings and marketing materials. These two events acted as mini-bombs, and at the time of writing, Coinbase's stock had already dropped by over 7.3%.
Coincidentally, Discover Financial Services, being replaced by Coinbase, can also be considered the "Coinbase" of the previous payment era. Discover is a U.S.-based digital banking and payment services company headquartered in Illinois, founded in 1960. Its payment network, Discover Network, is the fourth largest payment network apart from Visa, Mastercard, and American Express.
In April, after the approval of the acquisition of Discover by the sixth-largest U.S. bank, Capital One, this well-established digital banking company of over 60 years smoothly handed over its S&P 500 "seat" to this emerging cryptocurrency "bank." This unexpected coincidence also portrayed the handover between the new and old eras in Coinbase's entry into the S&P 500, resembling a relay race scene. However, this relay baton also brought Coinbase's accumulated "external troubles and internal strife" to a tipping point.
Over the past decade, cryptocurrency exchanges have been the most stable "profit machines." They play a role in providing liquidity to the entire industry and rely on trading fees to sustain their operations. However, with the comprehensive rollout of ETF products in the U.S. market, this profit model is facing unprecedented challenges. As the leader in the "American stack," with over 80% of its business coming from the U.S., Coinbase is most affected by this.
Starting from the approval of Bitcoin and Ethereum spot ETFs, traditional financial capital has significantly onboarded users and funds that originally belonged to exchanges in a more cost-effective, compliant, and transparent manner. The transaction fee revenue of cryptocurrency exchanges has started to decline, and this trend may further intensify in the coming months.
According to Coinbase's 2024 Q4 financial report, the platform's total trading revenue was $417 million, a 45% year-on-year decrease. The contribution of BTC and ETH's trading revenue dropped from 65% in the same period last year to less than 50%.
This decline is not a result of a decrease in market enthusiasm. In fact, since the approval of the Bitcoin ETF in January 2024, the inflow of BTC into the U.S. market has continued to reach new highs, with asset management giants like BlackRock and Fidelity rapidly expanding their management scale. Data shows that BlackRock's iShares Bitcoin ETF (IBIT) alone has surpassed $17 billion in assets under management. As of mid-May 2025, the cumulative net inflow of 11 major institutional Bitcoin spot ETFs on the market has exceeded $41.5 billion, with a total net asset value of $1214.69 billion, accounting for approximately 5.91% of the total Bitcoin market capitalization.
Institutional investors and some retail investors are shifting towards ETF products, partly due to compliance and tax considerations. On one hand, ETFs have much lower trading costs compared to cryptocurrency exchanges. While Coinbase's spot trading fee rate varies annually in a tiered manner but averages around 1.49%, for example, the management fee for IBIT ETF is only 0.25%, and the majority of ETF institution fees fluctuate around 0.15% to 0.25%.
In other words, the more rational users are, the more likely they are to move from exchanges to ETF products, especially for investors aiming for long-term holdings.
According to multiple sources, several institutions, including VanEck and Grayscale, have submitted applications to the SEC for a Solana (SOL) ETF, with some institutions also planning to submit an XRP ETF proposal. Once approved, this may trigger a new round of fund migration. According to a report submitted by Coinbase to the SEC, as of April, the platform's trading revenue from XRP and Solana accounted for 18% and 10%, nearly one-third of the platform's fee revenue.
However, the Bitcoin and Ethereum ETFs passed in 2024 also reduced the fees for these two tokens on Coinbase from 30% and 15% to 26% and 10%, respectively. If the SOL and XRP ETFs are approved, it will further undermine the core fee revenue of exchanges like Coinbase.
The expansion of ETF products is gradually weakening the financial intermediary status of cryptocurrency exchanges. From their original roles as matchmakers and clearers to now gradually becoming mere "on-ramps and off-ramps" for funds, exchanges are seeing their marginal value squeezed by ETFs.
On May 12, 2025, SEC Chairman Paul S. Atkins gave a keynote speech at the Tokenization and Cryptocurrency Working Group roundtable. The theme of his speech revolved around "It is a new day at the SEC," where he indicated that the SEC would not approach enforcement and regulation the same way as before but would instead pave the way for cryptocurrency assets in the U.S. market.
With signs of cryptocurrency compliance such as the SEC's "NEW DAY" declaration, an increasing number of traditional brokerages are attempting to enter the cryptocurrency industry. One of the most representative cases is the well-known U.S. brokerage Robinhood, which began expanding its crypto business in 2018. By the time of its IPO in 2021, Robinhood's crypto business revenue accounted for over 50% of the company, with a significant boost from the Dogecoin "moonshot" promoted by Musk.
In Q1 2025 earnings report, Robinhood showcased strong growth, especially in revenue from cryptocurrency and options trading. Fueled by Trump's Memecoin, cryptocurrency-related revenue reached $250 million, nearly doubling year-over-year. Consequently, Robinhood Gold subscription users reached 3.5 million, a 90% increase from the previous year, with the rapid growth of Robinhood Gold providing the company with a stable source of income.
Meanwhile, RobinHood is actively pursuing acquisitions in the cryptocurrency space. In 2024, it announced a $2 billion acquisition of the long-standing European cryptocurrency exchange Bitstamp. Additionally, Canada's largest cryptocurrency CEX, WonderFi, which recently went public on the Toronto Stock Exchange, also announced its integration with RobinHood Crypto. After obtaining virtual asset licenses in the UK, Canada, Singapore, and other markets, RobinHood has taken a proactive approach in the compliant cryptocurrency trading market.
Furthermore, an increasing number of brokerage firms are exploring the same path. Futu Securities, Tiger Brokers, and others are also dipping their toes into cryptocurrency trading, with some having applied for or obtained the VA license from the Hong Kong SFC. Although their user bases are currently small, traditional brokerages have a natural advantage in user trust, regulatory licenses, and low fee structures. This could pose a threat to native cryptocurrency platforms in the future.
In April 2025, security researchers discovered that some Coinbase user data was leaked on the dark web. While the platform initially responded by attributing it to a "technical misinformation," it still raised concerns among users regarding its security and privacy protection. Just two days before Dow Jones Indexes announced Coinbase's addition to the S&P 500 Index, on May 11, 2025, Coinbase received an email from an unknown threat actor claiming to have obtained customer account information and internal documents, demanding a $20 million ransom to keep the data private. Subsequent investigations confirmed the data breach.
Cybercriminals obtained the data by bribing overseas customer service agents and support staff, mainly in "non-U.S. regions such as India." These agents abused their access to Coinbase's internal customer support system and stole customer data. As early as February this year, blockchain detective ZachXBT revealed on X platform that between December 2024 and January 2025, Coinbase users lost over $65 million to social engineering scams, with the actual amount potentially higher.
Among the victims was a well-known figure, 67-year-old Ed Suman, an established artist in the art world for nearly two decades, having been involved in the creation of artworks such as Jeff Koons' "Balloon Dog" sculpture. Earlier this year, he fell victim to an impersonation scam involving fake Coinbase customer support, resulting in a loss of over $2 million in cryptocurrency. ZachXBT critiqued Coinbase for its inadequate handling of such scams, noting that other major exchanges have not faced similar issues and recommending Coinbase to enhance its security measures.
Amidst a series of ongoing social engineering incidents, although there has not been any impact on user assets at the technical level so far, it has raised concerns among many retail and institutional investors. Especially institutions holding massive assets on Coinbase. Just considering the U.S. BTC ETF institutions, as of mid-May 2025, they collectively hold nearly 840,000 BTC, and 75% of these are custodied by Coinbase. If we price BTC at $100,000, this amount reaches a staggering $63 billion, which is equivalent to the nominal GDP of two Iceland in the year 2024.
In addition, Coinbase Custody also serves over 300 institutional clients, including hedge funds, family offices, pension funds, and endowments. As of the Q1 2025 financial report, Coinbase's total assets under management (including institutional and retail clients) reached $404 billion. The specific amount of institutional custodied assets was not explicitly disclosed in the latest report, but it should still be over 50% based on the Q4 2024 report.
Once this security barrier is breached, not only could the rate of user attrition far exceed expectations, but more importantly, institutional trust in it would undermine the foundation of its business. Therefore, after a hacking event, Coinbase's stock price plummeted significantly.
Facing a decline in spot trading fee revenue, Coinbase is also accelerating its transformation, attempting to find growth opportunities in derivatives and emerging assets. Coinbase acquired a stake in the options platform Deribit at the end of 2024 and announced the official launch of perpetual contract products in 2025. This acquisition fills in Coinbase's gap in options trading and its relatively small global market share.
Deribit has a strong presence in non-U.S. markets, especially in Asia and Europe. The acquisition has enabled Coinbase to gain a dominant position in bitcoin and ethereum options trading on Deribit, accounting for approximately 80% of the global options trading volume, with daily trading volume remaining above $2 billion.
Meanwhile, 80-90% of Deribit's customer base consists of institutional investors, with their professionalism and liquidity in the Bitcoin and Ethereum options market highly favored by institutions. Coinbase's compliance advantage, coupled with its already robust institutional ecosystem, makes it even more suitable. By using institutions as an entry point, it can face the squeeze from giants like Binance and OKX in the derivatives market.
Facing a similar dilemma is Kraken, which is attempting to replicate Binance Futures' model in non-U.S. markets. Since the derivatives market relies more on professional users, fee rates are relatively higher and stickiness is stronger, making it a significant source of revenue for exchanges. In the first half of 2025, Kraken completed the acquisition of TradeStation Crypto and a futures exchange, aiming to build a complete derivatives trading ecosystem to hedge the risk of declining spot transaction fee income.
With the surge of Memecoin in 2024, Binance, OKX, and various CEX platforms began massively listing small-market-cap, highly volatile tokens to activate active trading users. Due to the wealth effect and trading activity of Memecoins, Coinbase was also forced to join the battle, successively listing popular tokens from the Solana ecosystem such as BOOK OF MEME and Dogwifhat. Although these coins are controversial, they are frequently traded, with fee rates several times higher than mainstream coins, serving as a "blood-boosting" method for spot trading.
However, due to its status as a publicly traded company, this practice is a riskier endeavor for Coinbase. Even in the current crypto-friendly environment, the SEC is still investigating whether tokens like SOL, ADA, and SAND constitute securities.
In addition to the forced transformation strategies carried out by the aforementioned CEXs, they are also starting to lay out RWAs and the most talked-about stablecoin payment fields, such as the PYUSD launched through a collaboration between Coinbase and Paypal, Coinbase's support for the Euro stablecoin EURC by Circle that complies with EU MiCA regulatory requirements, or the USD1 launched through a collaboration between Binance and WIFL. In the increasingly crowded trading field, many CEXs have shifted their focus from just the trading market to the application field.
The golden age of transaction fees has quietly ended, and the second half of the crypto exchange platform game has silently begun.
Arthur Hayes: Why I'm Betting on ETH While the Market Is Obsessed with SOL
Key Market Insights for May 16th, how much did you miss out on?
CryptoPunks Changes Hands Twice, Did the Originator of NFTs Finally Find Its "Forever Home" This Time?
May 16 Key Market Information Gap, A Must-Read! | Alpha Morning Report
Key Market Intelligence on May 14th, how much did you miss out on?
1.Binance Alpha Launches HIPPO, BLUE, and Other Tokens
2.Believe Ecosystem Tokens See General Rise, LAUNCHCOIN Surges Over 250% in 24 Hours
3.Tiger Securities Introduces Cryptocurrency Deposit and Withdrawal Service, Supports Mainstream Cryptocurrencies such as BTC and ETH
4.Current Bitcoin Rally Possibly Driven by Institutions, Retail Traders Yet to Join
5.Binance Wallet's New TGE Privasea AI Participation Requires a 198 Point Threshold, with a Point Consumption of 15
Source: Overheard on CT (tg: @overheardonct), Kaito
PUMP: Today's discussions about PUMP focus on its new creator revenue-sharing model: the platform will allocate 50% of PumpSwap revenue to token creators, sparking varied reactions from users. Some criticize the move as insufficient or even misleading, while others view it as a positive step the platform is taking to reward creators. Meanwhile, PUMP faces market pressure from emerging competitors like LetsBONKfun and Raydium, which are rapidly gaining market share. Users also express concerns about PUMP's sustainability and potential regulatory risks in the U.S., with discussions extending to the platform's impact on the entire memecoin ecosystem.
COINBASE: Today, Coinbase became the first crypto company to join the S&P 500 Index, replacing Discover Financial Services, sparking widespread industry attention. The entire crypto community views this milestone as a significant development, signaling that crypto assets are further integrating into the mainstream financial system. The news has sparked lively discussions on Twitter, with many users pointing out that this may attract more institutional investors to enter the Bitcoin and other cryptocurrency markets.
XRP: XRP became the focal point of today's crypto discussion, with its significant market movements and strategic advances drawing attention. XRP has surpassed USDT to become the third-largest cryptocurrency by market capitalization, sparking market excitement and discussions about its future potential. The surge in market capitalization and price is believed to be related to increasing institutional interest, deepening strategic partnerships, and its role in the crypto ecosystem. Additionally, XRP's integration into multiple financial systems and its potential as a macro asset class are also seen as key factors driving the current market sentiment.
DYDX: Today's discussions about DYDX mainly focused on the dYdX Yapper Leaderboard launched by KaitoAI. The leaderboard aims to identify the most active community participants, with a total of $150,000 in rewards to be distributed over the first three seasons. This initiative has sparked broad community participation, with many users discussing the potential rewards and the incentive effect on the DYDX ecosystem. Meanwhile, progress on the ethDYDX to dYdX native chain migration and historical airdrop events have also been topics of discussion.
1. "What Is 'ICM'? Holding Up the $4 Billion Market Cap Solana's New Narrative"
Overnight, the hottest narrative in the crypto space has become "Internet Capital Markets," with a host of crypto projects and founders, led by the Solana ecosystem's new Launchpad platform Believe, releasing this phrase. Together with "Believe in something," it has become the new slogan heralding the onset of a bull market. What exactly is the so-called "Internet Capital Market," will it become a short-lived hype phrase like the Base ecosystem's previous Content Coin, and what related targets are available for selection?2.《LaunchCoin Surges 20x in One Day, How Did Believe Create a $200M Market Cap Shiba Inu After Going to Zero?｜100x Retrospective》
LAUNCHCOIN broke through a $200 million market cap today, with the long-lost liquidity and such a high market cap "Memecoin" almost bringing half of the on-chain crypto community CT into the fray. The community is crazily discussing this token, with half of it being FOMO and the other half being FUD. This token, originally issued by Believe founder Ben Pasternak under his personal identity, transformed into a new platform token after a renaming. From once going to zero to a $200 million market cap, what happened in between?May 14 On-chain Fund Flow
Deconstructing Binance Alpha2.0's New "Asia-Led Liquidity Mining" Model
After Surging 40%, Has Ethereum Price Peaked Upon Exiting the Craze?
Whether you are an insider or an outsider, these days you must be familiar with the news about Ethereum. The reason is simple, causing Ethereum enthusiasts to sigh with emotion and almost throwing off-guard those who defend Ethereum, Ethereum, with a "3-day surge of 40%," climbed to the top of the Douyin Hot List.
As we all know, Ethereum launched the Pectra upgrade on May 7th. This most significant network upgrade since early 2024 integrates the Prague execution layer hard fork and the Electra consensus layer upgrade, significantly improving Ethereum's performance through 11 improvement proposals. The account abstraction feature (EIP-7702) allows users to flexibly manage wallets through social media accounts or multi-signature schemes, reducing the user threshold, attracting more users and developers. The staking mechanism optimization increases the validator ETH cap from 32ETH to 2048ETH and introduces a flexible withdrawal method, making it easier for institutions and individuals to participate in network security, enhancing the market's confidence in Ethereum's long-term value.
At the same time, Pectra optimized the interaction efficiency of Layer 2 networks such as Arbitrum and Optimism, making transactions faster and cheaper, leading to a surge in on-chain activity. As a crucial step for Ethereum's transition from "2G" to "5G," the Pectra upgrade not only enhances network vitality but also "recharges confidence" in the market, directly driving the price increase.
Related Reading: "Ethereum Skyrockets 22% in One Day, E Enthusiasts Rejoice"
It's not just Ethereum itself, as Wall Street also brought important bullish news.
The world's largest asset management company, BlackRock, proposed to the SEC allowing Ethereum ETFs for staking. This proposal is expected to elevate Ethereum ETFs from a mere investment tool to a bond-like "interest-bearing asset," bringing investors both capital appreciation and passive income, igniting market optimism about Ethereum's future potential.
Specifically, BlackRock has proposed to amend its S-1 filing to allow investors to create and redeem ETF shares directly with Ethereum instead of the U.S. dollar (i.e., in-kind redemption). This move, combined with its $2.9 billion BUIDL Fund launched in March 2024, aims to deepen the integration of traditional finance with blockchain. The BUIDL Fund is a tokenized fund operating on the Ethereum network, investing in traditional assets such as U.S. Treasury bonds. This setup is highly attractive to institutional investors, as they can not only benefit from Ethereum's price appreciation but also earn stable cash flow through staking.
Robert Mitchnick, BlackRock's Head of Digital Assets, stated in a CNBC interview in March 2025 that the addition of staking functionality will significantly enhance the appeal of the Ethereum ETF. He admitted that when the Ethereum spot ETF was launched in July 2024 without staking functionality, the market demand was lackluster, and staking could be the key to reversing this trend.
Meanwhile, the SEC's shifting stance on cryptocurrency regulation has also fueled this upward trend. During the tenure of the previous SEC chairman, the regulatory approach was tough, and staking was strictly viewed through the Howey test as a potential unregistered security. Therefore, when approving the Ethereum spot ETF in May 2024, staking functionality was explicitly prohibited.
However, with Trump back in the White House and Paul Atkins taking over the SEC, there has been a noticeable relaxation in crypto regulation. Apart from BlackRock, ETF issuers such as Invesco Galaxy, VanEck, WisdomTree, and 21Shares have also submitted applications for similar staking and in-kind redemption.
Related reading: "New Chairman Takes Office, SEC Transforms into 'Crypto Daddy' Within 48 Hours"
If staking ETFs are approved, the benefits are likely to go beyond price appreciation. The introduction of staking functionality could redefine the role of crypto assets, making them more similar to traditional financial products that provide returns and value appreciation, thereby driving Ethereum closer to mainstream finance.
Currently, the SEC still needs to address several decisions related to crypto ETFs, including whether to approve ETFs for Solana, XRP, Litecoin, and even Dogecoin. With the calls for an "altcoin season" growing louder, Ethereum's strong performance may just be the beginning of a larger crypto market frenzy.
In addition, the Trump family-related DeFi project WLFI is also bullish on this wave of rise, with frequent on-chain activities. According to on-chain data analyst @ai_9684xtpa's monitoring, a WLFI-related address is currently borrowing coins to go long on ETH, borrowing 4 million U from Aave to buy 1590 ETH at an average price of $2515 per ETH.
For this epic surge of Ethereum after half a year of silence, the community has indeed gained more confidence and hope, which has also led to a revival of the entire altcoin market. However, amidst the joy, there are also voices of pessimism. Below is a summary conducted by BlockBeats based on community discussions.
The optimists point out that the current market structure is similar to the eve of the bull markets in 2016 and 2020, predicting a life-changing surge in the next 3-6 months, where some altcoins may even achieve astonishing single-day gains of up to 40%.
@liuwei16602825 stated that this surge signifies the return of the bull market as a sure thing. There is no need to worry about a pullback. The driving force behind the surge uses a high-cost isolated operation, fearing a drop more than any retail investor and will definitely do everything to support the price.
Related Reading: "Ethereum Leads the Surge Triggering the 'Altcoin Season' Speculation, How Do Traders View the Future Market?"
The bears mainly believe that this surge is different from the bull market of 2021, as the current market lacks the confidence of large-scale retail investors entering and holding positions for the long term, with funds rotating too quickly.
@market_beggar observed that a Bitfinex E/B whale has started to close positions and believes that if this whale maintains its high-speed position-closing operation for the next few days, it can be inferred that the whale no longer sees the upside potential of ETH, preparing to take profits and exit. The closing time will be a key focus going forward.
@FLS_OTC stated that there are still many uncertainties at the macro level, and the liquidity cannot support a major bull market. At this stage, it is a "last hurrah," not a complete reversal, and will continue to remain in a short position.
@off_thetarget believes that after ETH transitioned from POW to POS, it lost the "gold standard" of mining machine power cost support. The staking economic model led to a breakdown in value anchoring. Additionally, the L2 ecosystem (such as Starknet, zkSync, etc.) suffered from liquidity fragmentation, failing to establish an effective capital inflow mechanism, causing the collapse of the split disc pattern. Furthermore, the ETH community's excessive pursuit of technical narratives divorced from real-world needs resulted in a weak ecosystem growth. Therefore, he believes that ETH's intrinsic value system has crumbled, and the price is bound to plummet to the 800-1200 range, with a decisive short position at 1800.
@Airdrop_Guard, based on the core logic of the "High Probability Trading Strategy," where three sets of underlying logic different trading systems (such as volume depletion, price supply-demand, long/short position funding rate, etc.) simultaneously issue a short signal at the same point (2580), creating a high-probability trading opportunity. He emphasizes that these systems must be based on different algorithms and logics (rather than mere technical indicator overlays). The current ETH trend aligns with the short conditions in multiple independent dimensions of his trading system, hence the decision to short.
Overall, Bitcoin still maintains over 54% market dominance, and institutional funds' continued preference for it may limit the altcoin's upward potential. The market's future direction will depend on multiple factors, such as Bitcoin's price trend, global macroeconomic conditions, and whether funds can effectively rotate from Bitcoin to the altcoin sector.
Although Ethereum's recent leadership in the market has brought about optimistic sentiment, investors still need to remain rational as different sectors of altcoins are likely to show divergence in trends. Whether this round of Ethereum's rise will usher in a true altcoin frenzy may require more time and conducive conditions.
Binance Alpha Points Gameplay Overtakes on the Inside Track, Sweeping 90% of the Web3 Wallet Market
How to Get Rich in Crypto Without Relying on Luck? Financial Veteran Raoul Pal's Macro Insights and Investment Path
After CEX and Wallet, OKX enters the payment game
RWA Evergreen Product Crisis: Why is the GLP Model Doomed to Collapse Under RWA Evergreen?
Science Equity Movement: DeSci's Trillion-Dollar Knowledge Economy Reconstruction Revolution
Sentient In-Depth Research Report: Secures $85 Million in Funding to Build a Decentralized AGI New Paradigm
Week 16 On-Chain Data: Intensifying Structural Supply-Demand Imbalance, Data Reveals Solid Blueprint for Next Bull Run?
Sui Q1 Advanced Report: The Rise of BTCfi Infrastructure, the Boom of Lending Protocols, and the Future of Rollup-Based Scalability
Crypto Developer: The Trump Family's Coin Minting Real Estate Business
Gate.io MemeBox has officially integrated with the Solana ecosystem, providing lightning-fast on-chain asset trading.
$COIN Joins S&P 500, but Coinbase Isn't Celebrating
On May 13, S&P Dow Jones Indices announced that Coinbase would officially replace Discover Financial Services in the S&P 500 on May 19. While other companies like Block and MicroStrategy, closely tied to Bitcoin, were already part of the S&P 500, Coinbase became the first cryptocurrency exchange whose primary business is in the index. This also signifies that cryptocurrency is gradually moving from the fringes to the mainstream in the U.S.
On the day of the announcement, Coinbase's stock price surged by 23%, surpassing the $250 mark. However, just 3 days later, Coinbase was hit by two consecutive events: a hack where employees were bribed to steal customer data and a demand for a $20 million ransom, and an investigation by the U.S. Securities and Exchange Commission (SEC) into the authenticity of its claim of having over 100 million "verified users" in its securities filings and marketing materials. These two events acted as mini-bombs, and at the time of writing, Coinbase's stock had already dropped by over 7.3%.
Coincidentally, Discover Financial Services, being replaced by Coinbase, can also be considered the "Coinbase" of the previous payment era. Discover is a U.S.-based digital banking and payment services company headquartered in Illinois, founded in 1960. Its payment network, Discover Network, is the fourth largest payment network apart from Visa, Mastercard, and American Express.
In April, after the approval of the acquisition of Discover by the sixth-largest U.S. bank, Capital One, this well-established digital banking company of over 60 years smoothly handed over its S&P 500 "seat" to this emerging cryptocurrency "bank." This unexpected coincidence also portrayed the handover between the new and old eras in Coinbase's entry into the S&P 500, resembling a relay race scene. However, this relay baton also brought Coinbase's accumulated "external troubles and internal strife" to a tipping point.
Over the past decade, cryptocurrency exchanges have been the most stable "profit machines." They play a role in providing liquidity to the entire industry and rely on trading fees to sustain their operations. However, with the comprehensive rollout of ETF products in the U.S. market, this profit model is facing unprecedented challenges. As the leader in the "American stack," with over 80% of its business coming from the U.S., Coinbase is most affected by this.
Starting from the approval of Bitcoin and Ethereum spot ETFs, traditional financial capital has significantly onboarded users and funds that originally belonged to exchanges in a more cost-effective, compliant, and transparent manner. The transaction fee revenue of cryptocurrency exchanges has started to decline, and this trend may further intensify in the coming months.
According to Coinbase's 2024 Q4 financial report, the platform's total trading revenue was $417 million, a 45% year-on-year decrease. The contribution of BTC and ETH's trading revenue dropped from 65% in the same period last year to less than 50%.
This decline is not a result of a decrease in market enthusiasm. In fact, since the approval of the Bitcoin ETF in January 2024, the inflow of BTC into the U.S. market has continued to reach new highs, with asset management giants like BlackRock and Fidelity rapidly expanding their management scale. Data shows that BlackRock's iShares Bitcoin ETF (IBIT) alone has surpassed $17 billion in assets under management. As of mid-May 2025, the cumulative net inflow of 11 major institutional Bitcoin spot ETFs on the market has exceeded $41.5 billion, with a total net asset value of $1214.69 billion, accounting for approximately 5.91% of the total Bitcoin market capitalization.
Institutional investors and some retail investors are shifting towards ETF products, partly due to compliance and tax considerations. On one hand, ETFs have much lower trading costs compared to cryptocurrency exchanges. While Coinbase's spot trading fee rate varies annually in a tiered manner but averages around 1.49%, for example, the management fee for IBIT ETF is only 0.25%, and the majority of ETF institution fees fluctuate around 0.15% to 0.25%.
In other words, the more rational users are, the more likely they are to move from exchanges to ETF products, especially for investors aiming for long-term holdings.
According to multiple sources, several institutions, including VanEck and Grayscale, have submitted applications to the SEC for a Solana (SOL) ETF, with some institutions also planning to submit an XRP ETF proposal. Once approved, this may trigger a new round of fund migration. According to a report submitted by Coinbase to the SEC, as of April, the platform's trading revenue from XRP and Solana accounted for 18% and 10%, nearly one-third of the platform's fee revenue.
However, the Bitcoin and Ethereum ETFs passed in 2024 also reduced the fees for these two tokens on Coinbase from 30% and 15% to 26% and 10%, respectively. If the SOL and XRP ETFs are approved, it will further undermine the core fee revenue of exchanges like Coinbase.
The expansion of ETF products is gradually weakening the financial intermediary status of cryptocurrency exchanges. From their original roles as matchmakers and clearers to now gradually becoming mere "on-ramps and off-ramps" for funds, exchanges are seeing their marginal value squeezed by ETFs.
On May 12, 2025, SEC Chairman Paul S. Atkins gave a keynote speech at the Tokenization and Cryptocurrency Working Group roundtable. The theme of his speech revolved around "It is a new day at the SEC," where he indicated that the SEC would not approach enforcement and regulation the same way as before but would instead pave the way for cryptocurrency assets in the U.S. market.
With signs of cryptocurrency compliance such as the SEC's "NEW DAY" declaration, an increasing number of traditional brokerages are attempting to enter the cryptocurrency industry. One of the most representative cases is the well-known U.S. brokerage Robinhood, which began expanding its crypto business in 2018. By the time of its IPO in 2021, Robinhood's crypto business revenue accounted for over 50% of the company, with a significant boost from the Dogecoin "moonshot" promoted by Musk.
In Q1 2025 earnings report, Robinhood showcased strong growth, especially in revenue from cryptocurrency and options trading. Fueled by Trump's Memecoin, cryptocurrency-related revenue reached $250 million, nearly doubling year-over-year. Consequently, Robinhood Gold subscription users reached 3.5 million, a 90% increase from the previous year, with the rapid growth of Robinhood Gold providing the company with a stable source of income.
Meanwhile, RobinHood is actively pursuing acquisitions in the cryptocurrency space. In 2024, it announced a $2 billion acquisition of the long-standing European cryptocurrency exchange Bitstamp. Additionally, Canada's largest cryptocurrency CEX, WonderFi, which recently went public on the Toronto Stock Exchange, also announced its integration with RobinHood Crypto. After obtaining virtual asset licenses in the UK, Canada, Singapore, and other markets, RobinHood has taken a proactive approach in the compliant cryptocurrency trading market.
Furthermore, an increasing number of brokerage firms are exploring the same path. Futu Securities, Tiger Brokers, and others are also dipping their toes into cryptocurrency trading, with some having applied for or obtained the VA license from the Hong Kong SFC. Although their user bases are currently small, traditional brokerages have a natural advantage in user trust, regulatory licenses, and low fee structures. This could pose a threat to native cryptocurrency platforms in the future.
In April 2025, security researchers discovered that some Coinbase user data was leaked on the dark web. While the platform initially responded by attributing it to a "technical misinformation," it still raised concerns among users regarding its security and privacy protection. Just two days before Dow Jones Indexes announced Coinbase's addition to the S&P 500 Index, on May 11, 2025, Coinbase received an email from an unknown threat actor claiming to have obtained customer account information and internal documents, demanding a $20 million ransom to keep the data private. Subsequent investigations confirmed the data breach.
Cybercriminals obtained the data by bribing overseas customer service agents and support staff, mainly in "non-U.S. regions such as India." These agents abused their access to Coinbase's internal customer support system and stole customer data. As early as February this year, blockchain detective ZachXBT revealed on X platform that between December 2024 and January 2025, Coinbase users lost over $65 million to social engineering scams, with the actual amount potentially higher.
Among the victims was a well-known figure, 67-year-old Ed Suman, an established artist in the art world for nearly two decades, having been involved in the creation of artworks such as Jeff Koons' "Balloon Dog" sculpture. Earlier this year, he fell victim to an impersonation scam involving fake Coinbase customer support, resulting in a loss of over $2 million in cryptocurrency. ZachXBT critiqued Coinbase for its inadequate handling of such scams, noting that other major exchanges have not faced similar issues and recommending Coinbase to enhance its security measures.
Amidst a series of ongoing social engineering incidents, although there has not been any impact on user assets at the technical level so far, it has raised concerns among many retail and institutional investors. Especially institutions holding massive assets on Coinbase. Just considering the U.S. BTC ETF institutions, as of mid-May 2025, they collectively hold nearly 840,000 BTC, and 75% of these are custodied by Coinbase. If we price BTC at $100,000, this amount reaches a staggering $63 billion, which is equivalent to the nominal GDP of two Iceland in the year 2024.
In addition, Coinbase Custody also serves over 300 institutional clients, including hedge funds, family offices, pension funds, and endowments. As of the Q1 2025 financial report, Coinbase's total assets under management (including institutional and retail clients) reached $404 billion. The specific amount of institutional custodied assets was not explicitly disclosed in the latest report, but it should still be over 50% based on the Q4 2024 report.
Once this security barrier is breached, not only could the rate of user attrition far exceed expectations, but more importantly, institutional trust in it would undermine the foundation of its business. Therefore, after a hacking event, Coinbase's stock price plummeted significantly.
Facing a decline in spot trading fee revenue, Coinbase is also accelerating its transformation, attempting to find growth opportunities in derivatives and emerging assets. Coinbase acquired a stake in the options platform Deribit at the end of 2024 and announced the official launch of perpetual contract products in 2025. This acquisition fills in Coinbase's gap in options trading and its relatively small global market share.
Deribit has a strong presence in non-U.S. markets, especially in Asia and Europe. The acquisition has enabled Coinbase to gain a dominant position in bitcoin and ethereum options trading on Deribit, accounting for approximately 80% of the global options trading volume, with daily trading volume remaining above $2 billion.
Meanwhile, 80-90% of Deribit's customer base consists of institutional investors, with their professionalism and liquidity in the Bitcoin and Ethereum options market highly favored by institutions. Coinbase's compliance advantage, coupled with its already robust institutional ecosystem, makes it even more suitable. By using institutions as an entry point, it can face the squeeze from giants like Binance and OKX in the derivatives market.
Facing a similar dilemma is Kraken, which is attempting to replicate Binance Futures' model in non-U.S. markets. Since the derivatives market relies more on professional users, fee rates are relatively higher and stickiness is stronger, making it a significant source of revenue for exchanges. In the first half of 2025, Kraken completed the acquisition of TradeStation Crypto and a futures exchange, aiming to build a complete derivatives trading ecosystem to hedge the risk of declining spot transaction fee income.
With the surge of Memecoin in 2024, Binance, OKX, and various CEX platforms began massively listing small-market-cap, highly volatile tokens to activate active trading users. Due to the wealth effect and trading activity of Memecoins, Coinbase was also forced to join the battle, successively listing popular tokens from the Solana ecosystem such as BOOK OF MEME and Dogwifhat. Although these coins are controversial, they are frequently traded, with fee rates several times higher than mainstream coins, serving as a "blood-boosting" method for spot trading.
However, due to its status as a publicly traded company, this practice is a riskier endeavor for Coinbase. Even in the current crypto-friendly environment, the SEC is still investigating whether tokens like SOL, ADA, and SAND constitute securities.
In addition to the forced transformation strategies carried out by the aforementioned CEXs, they are also starting to lay out RWAs and the most talked-about stablecoin payment fields, such as the PYUSD launched through a collaboration between Coinbase and Paypal, Coinbase's support for the Euro stablecoin EURC by Circle that complies with EU MiCA regulatory requirements, or the USD1 launched through a collaboration between Binance and WIFL. In the increasingly crowded trading field, many CEXs have shifted their focus from just the trading market to the application field.
The golden age of transaction fees has quietly ended, and the second half of the crypto exchange platform game has silently begun.
Arthur Hayes: Why I'm Betting on ETH While the Market Is Obsessed with SOL
Key Market Insights for May 16th, how much did you miss out on?
CryptoPunks Changes Hands Twice, Did the Originator of NFTs Finally Find Its "Forever Home" This Time?
May 16 Key Market Information Gap, A Must-Read! | Alpha Morning Report
Key Market Intelligence on May 14th, how much did you miss out on?
1.Binance Alpha Launches HIPPO, BLUE, and Other Tokens
2.Believe Ecosystem Tokens See General Rise, LAUNCHCOIN Surges Over 250% in 24 Hours
3.Tiger Securities Introduces Cryptocurrency Deposit and Withdrawal Service, Supports Mainstream Cryptocurrencies such as BTC and ETH
4.Current Bitcoin Rally Possibly Driven by Institutions, Retail Traders Yet to Join
5.Binance Wallet's New TGE Privasea AI Participation Requires a 198 Point Threshold, with a Point Consumption of 15
Source: Overheard on CT (tg: @overheardonct), Kaito
PUMP: Today's discussions about PUMP focus on its new creator revenue-sharing model: the platform will allocate 50% of PumpSwap revenue to token creators, sparking varied reactions from users. Some criticize the move as insufficient or even misleading, while others view it as a positive step the platform is taking to reward creators. Meanwhile, PUMP faces market pressure from emerging competitors like LetsBONKfun and Raydium, which are rapidly gaining market share. Users also express concerns about PUMP's sustainability and potential regulatory risks in the U.S., with discussions extending to the platform's impact on the entire memecoin ecosystem.
COINBASE: Today, Coinbase became the first crypto company to join the S&P 500 Index, replacing Discover Financial Services, sparking widespread industry attention. The entire crypto community views this milestone as a significant development, signaling that crypto assets are further integrating into the mainstream financial system. The news has sparked lively discussions on Twitter, with many users pointing out that this may attract more institutional investors to enter the Bitcoin and other cryptocurrency markets.
XRP: XRP became the focal point of today's crypto discussion, with its significant market movements and strategic advances drawing attention. XRP has surpassed USDT to become the third-largest cryptocurrency by market capitalization, sparking market excitement and discussions about its future potential. The surge in market capitalization and price is believed to be related to increasing institutional interest, deepening strategic partnerships, and its role in the crypto ecosystem. Additionally, XRP's integration into multiple financial systems and its potential as a macro asset class are also seen as key factors driving the current market sentiment.
DYDX: Today's discussions about DYDX mainly focused on the dYdX Yapper Leaderboard launched by KaitoAI. The leaderboard aims to identify the most active community participants, with a total of $150,000 in rewards to be distributed over the first three seasons. This initiative has sparked broad community participation, with many users discussing the potential rewards and the incentive effect on the DYDX ecosystem. Meanwhile, progress on the ethDYDX to dYdX native chain migration and historical airdrop events have also been topics of discussion.
1. "What Is 'ICM'? Holding Up the $4 Billion Market Cap Solana's New Narrative"
Overnight, the hottest narrative in the crypto space has become "Internet Capital Markets," with a host of crypto projects and founders, led by the Solana ecosystem's new Launchpad platform Believe, releasing this phrase. Together with "Believe in something," it has become the new slogan heralding the onset of a bull market. What exactly is the so-called "Internet Capital Market," will it become a short-lived hype phrase like the Base ecosystem's previous Content Coin, and what related targets are available for selection?2.《LaunchCoin Surges 20x in One Day, How Did Believe Create a $200M Market Cap Shiba Inu After Going to Zero?｜100x Retrospective》
LAUNCHCOIN broke through a $200 million market cap today, with the long-lost liquidity and such a high market cap "Memecoin" almost bringing half of the on-chain crypto community CT into the fray. The community is crazily discussing this token, with half of it being FOMO and the other half being FUD. This token, originally issued by Believe founder Ben Pasternak under his personal identity, transformed into a new platform token after a renaming. From once going to zero to a $200 million market cap, what happened in between?May 14 On-chain Fund Flow
Popular coins
Latest Crypto News
Customer Support：@weikecs
Business Cooperation：@weikecs
Quant Trading & MM：bd@weex.com
VIP Services：support@weex.com
App