I'm sometimes asked, if you were to start another crypto company today, what would it be? The crypto space is in its infancy. In five years, many entrepreneurs will be looking back wishing they had started a crypto company in 2023. Bear markets are for building, so why not start today?
I decided to share my 10 top ideas with the hope that someone goes out and builds them. Ideas are cheap. It's the hard work and determination to go build them that will be challenging. Coinbase has the resources to build a lot in crypto, but we don't have time to build everything and want to help enable the ecosystem around us. We have invested in and are partnering with phenomenal teams working on some of these ideas. Others are largely unexplored. We need more people to come join us.
Coinbase Ventures will be hosting a Builder Summit in October, and we'd like to invite a small group of the top founders or projects working on/around these ideas, to come meet in person. More on this at the end – but for now, here are my top ideas, in no particular order.
*Note: Coinbase Ventures has and continues to invest in startups working across many of these themes, several of which are referenced below (non-exhaustive).
Bitcoin is the gold standard of the internet, and that's a great idea for a currency. But because it has so much upside, many are less willing to spend it as currency today. It still has some growing to do. Fiat-backed stablecoins are a great intermediary step, but they suffer from inflation and seizure – just like fiat money.
What would it look like to make a better form of money enabled by crypto? It would probably be totally decentralized (censorship resistant) and track consumer prices (e.g., CPI in the U.S.) to preserve purchasing power, or something close to it. It may need to be backed by a basket of assets to track CPI, or use an algorithmic approach. Services like Truflation even offer a way to potentially track inflation onchain today, to further decentralize it. The company or protocol that helps build a better form of money in crypto would have a huge impact.
Reference examples: Ampleforth/Spot, Nuon, Truflation
We have decentralized identity now with ENS, but how do we know who to trust? How do we know if a merchant is reputable? Or if we're sending to the real artist?
We can make a decentralized protocol which assigns a reputation score to each address or ENS name, based on the graph of onchain data. This is similar to how PageRank scores every website based on the graph of incoming links and associated metadata. This could be used for lending (a decentralized FICO score), ratings on merchants (Yelp), fraud prevention (Wallets could warn me before sending to a risky address), airdrops to VIPs, etc. It would need to be a decentralized protocol to prevent capture or abuse.
The best business model in Web 2 has been ads. It's a reasonable bet that some form of advertising will be big in Web 3. Developers and startups in Web 3 will increasingly be willing to pay for distribution, but can we do better than the traditional ad model? In Web 2, the big innovation was going from CPM (pay per thousand impressions) to CPC (only pay if someone clicks the ad). In Web 3, maybe we can go all the way to CPA (only pay when someone buys or takes an action onchain).
Imagine if any smart contract could expose some metadata about what it was willing to pay to send users to a function call. That function call could take in a referrer address, and pay out a set commission. Indexing all the smart contracts that support this ad standard would create ad inventory. Now Wallets and apps with lots of users, can choose which ad or referral links to route requests to, and share in the upside when they deliver users. A real time auction mechanic will help find optimal prices. There could be other variations of how ads emerge in Web 3, but the above is just one example.
Reference examples: Spindl, HypeLab
Onchain Capital Formation
The ICO craze had some major challenges – including scams and unregistered securities. But there was a frenzy there for a reason: capital formation globally is still way too high friction. It's also unevenly distributed. If you're an entrepreneur living in Budapest or Bangalore, your chances of having access to capital are lower than if you live in Silicon Valley or Cleveland. We'd have way more startups if it were easier to raise money. (Not just startups: real people raising money for an apartment complex, or anything.)
What would the next iteration of ICOs look like that was legitimate and trusted? Imagine some combination of Stripe Atlas and AngelList in Web 3, that not only helped you register your company or idea (in each country, by filing paperwork, or as a DAO, pseudonymously), but then also helped you raise money for your idea. Each idea could have a pitch deck or video, discussion and ratings, the reputation of participants, and a transparent flow of funds on chain. Democratizing fundraising could unlock tremendous latent entrepreneurial energy across the world.
Job/Task Marketplace for Crypto
There are a finite number of people in the world who have enough disposable income to invest in crypto. But almost everyone needs to earn a living and spend income on basic living needs. A major barrier to a more global job market is the difficulty in routing payments to individuals cross-border. Why not help create a more global and free marketplace for labor, by allowing jobs and tasks to be posted that pay in crypto, and helping employees and contractors find them?
Reference examples: Braintrust, Earn.com
Privacy for Layer 2
Layer 2 solutions have started to help crypto scale, which is great. But most transactions are still happening on public blockchains. There are many cases where transparency is a feature, but people do not want most transactions in the economy to be public. What is the right way to bring privacy to layer 2 solutions, and is there a business to be built here?
Reference examples: Aztec, Polygon, zkSync
P2P Exchange Fully Onchain
P2P exchanging of crypto offers an important on-ramp and off-ramp in emerging and less developed markets. But P2P exchanges are run by centralized entities that can be pressured to shut down, eroding personal freedoms. Is there a way to build a decentralized P2P exchange, run entirely onchain, with escrow, reputation, and mediation?
Reference examples: Onboard
I'm not an expert on building games, but it feels like we've just scratched the surface on how crypto can intersect with games. How can players actually own the items they collect and use in games? How can these items live on in persistent worlds (or dare I say metaverse), creating more complex interactions and economies? Early examples like Dark Forest were exciting.
Perhaps more games can be created with Loot. These don't have to be massive blockbuster games. Even simple games, like A Dark Room, could be adapted to use NFT in-game items that the player gets to own, in a persistent virtual world with other players.
Reference examples: Azra Games, Horizon Blockchain Games, Immutable, Plai Labs, Yuga Labs
Tokenizing real world assets
1:1-backed fiat stablecoins like USDC are among the first proven, scaled, onchain manifestations of “real world assets.” We believe over time many forms of assets can and will be manifested on open, permissionless blockchain networks, creating new financial primitives endowed with the superpowers of programmability, composability, 24/7 global liquidity, and trust-minimized settlement.
Many projects today (including several of our portfolio companies) are working on approaches in this area addressing debt instruments, T-bills, commodities, accounts receivables and even high end luxury goods.
Reference examples: Goldfinch, Centrifuge, MoHash, Naos, and Mountain Protocol
Software To Start and Manage Network States
The Network State, by Balaji Srinivasan has helped accelerate the movement toward startup cities and network states. More network states will be started and they need tools to manage voting, governance, fundraising, citizenship, collecting taxes, providing services, and more. Come to think of it, this software could be useful for many different types of startup cities and communities.
Web3 Professional Network
We can reimagine online professional networks with a “web3 version of LinkedIn”. Companies could issue soulbound NFTs or another form of non-transferable token standard to user wallets to verify employment status and history. Educational programs could also issue NFTs to confirm completion of a course or bootcamp. Additionally, standards could be developed to issue different types of onchain credentials by all types of professional organizations. Front end applications could be built on these open standards to search and view profiles, and you could even pay onchain to connect with or message users.
In this model, you (the user) would own and monetize your professional network graph vs. it being controlled by a centralized walled garden. You would have the ability to build an “onchain resume” through not only formal employment history but many types of contributions, achievements and the teams you have worked with. Employers and collaborators would have more confidence in an individual’s credentials and skills given that they are issued against transparent criteria and are verifiable onchain.
You may have a better idea than all the ones above. In fact, I hope you do! We still want to hear from you, if you have something you're excited about building in crypto.
Apply to attend the Coinbase Ventures Summit
Coinbase Ventures will be hosting a summit later this year, to bring together 20-30 of the top builders and aspiring builders in crypto.
Whether you already have a crypto startup you're working on, or simply have an idea, we invite you to apply. Attendees will be asked to give a brief presentation to the group on what they're working on, or excited about, in the crypto space. These lightning talks will be followed by deep dive sessions, focused around a few of the ideas discussed. There will also be some social time, and some surprise guests joining me in attendance.
Coinbase Ventures may make investments in some of the companies who attend, or are formed, as a result of the Summit. But more importantly, it's a great chance to meet with other top builders in the crypto space in an intimate setting. Who knows, you may meet your co-founder, or the next key member of your team.
Whether you attend the summit or not, I hope you keep building in the crypto space.
Please click here to apply to the Coinbase Ventures Summit 2023.