Coinbase Ventures – Advancing crypto and web3

The Coinbase Ventures blog

What we’re watching around the cryptoeconomy.

July 16, 2024

ELI5 – L3s

While L2s’ lower gas fees / increased throughput have enabled them to become the hub of onchain activity & account for a sizable portion of the ETH-based economy, they may be constrained by pressure to maintain decentralization & alignment with ETH L1. Builders that want to [1] experiment and customize their apps, and [2] align with an L2 for distribution, are now opting to build L3s – which are application-chains that settle to an underlying L2. This document is focused on building a shared understanding of L3s.

May 14, 2024

Understanding the EigenLayer AVS Landscape

EigenLayer* is a protocol built on Ethereum that introduces restaking, a new primitive in crypto-economic security that has emerged as a leading narrative within the Ethereum community. Restaking via EigenLayer enables developers to leverage Ethereum's existing economic security infrastructure (i.e., validator set and staked ETH) to bootstrap new Actively Validated Services (AVS). Compared to how traditional cloud platforms and SaaS solutions were transformative to web2 development, we believe the emergence of EigenLayer and its burgeoning ecosystem of AVSs unlocks a "verifiable cloud" paradigm for web3. As restaking and shared security models evolve, their impact on blockchain ecosystems will become increasingly evident, driven by growing demand from stakers and developers seeking to unlock new opportunities onchain.

March 5, 2024

State of Wallets - Part 2: Smart Accounts

"Smart Accounts" (or “Smart Wallets”) – which we define as smart contract wallets (SCW) with “Account Abstraction” features – have become a top-of-mind conversation among crypto developers. Account Abstraction (“AA”) launched in the EVM ecosystem in Q1-2023 and is beginning to see an uptick in adoption. This document explains the value proposition, adoption inflection, and implications for the broader ecosystem.

February 26, 2024

State of Wallets - Part 1: Wallet Technologies

The two most important technologies created in crypto/web3 are the concept of blockspace and cryptographic keys/wallets. Wallet technologies have now expanded beyond self-custodial wallets, and we believe within the next 5 years wallets will change dramatically – marking crypto’s “iPhone” moment. In this part, we will cover the various wallet technologies. In the future parts, we will cover related trends like how data and identifiers will be attached to wallets.

January 29, 2024

State of Bridging

Bridges have emerged as core infrastructure for protocols, service providers, and users in accessing crypto use-cases. This report is meant to capture the current state of the bridging landscape, the future trends in bridging, and the implications for the broader crypto ecosystem.