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From RWA to RWAfi, will Plume be the Alpha Key to capturing the trillion-dollar epic narrative?

By: blockbeats|2025/01/16 09:15:02
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Source: Plume Network

From a data perspective, the RWA narrative is definitely the clearest Alpha direction for the next 10 years in the "Blockchain+" space.

According to the RWA research platform rwa.xyz, the current total market size of RWA exceeds $15 billion. Fidelity predicts this number will double to $30 billion by 2025, while BlackRock's outlook is even more optimistic, estimating that the market value of tokenized assets will reach $100 trillion by the 2030s.

In other words, in the next 7 years, the potential growth space of the RWA narrative could be as high as 700 times or more! However, behind this lies a core question: who will truly capture the incremental value of this epic narrative?

From RWA to RWAfi, will Plume be the Alpha Key to capturing the trillion-dollar epic narrative?

Source: rwa.xyz

This should also be the billion-dollar question for the entire RWA track going forward, and the answer may be hidden in the infrastructure surrounding the RWAfi public chain.

RWAfi, the Historic Shuttle of RWA

Essentially, moving real-world assets (RWA) to the blockchain has only completed the first step of tokenization, far from enough to unleash its true potential—to further realize on-chain value, more efficient technological infrastructure, open infrastructure toolsets, and a complete ecosystem synergy are needed.

In simple terms, the on-chainization of RWAs not only requires technological breakthroughs but also needs a full set of service frameworks around the entire life cycle of RWA assets, especially to securely and inclusively introduce RWA assets into diverse on-chain DeFi scenarios, transforming the stock dividend of traditional assets into on-chain incremental value.

This is also the essence of RWAfi. Under the tokenization framework, RWA not only significantly enhances its own liquidity but can also earn DeFi returns through operations such as borrowing and staking, bringing real-yield asset support to DeFi and strengthening the foundation of the Crypto market's value.

Vitalik Buterin once proposed an interesting analogy, stating that each blockchain network has a unique "soul." For example, some networks deeply focus on a specific DeFi scenario, some concentrate on the NFT and DAO ecosystem, while others are dedicated to incubating ZK applications, and so on.

However, when we turn our attention to the RWA ecosystem, we find a fascinating reality: despite the popularity of RWAs, there are very few RWAfi public blockchains specifically designed to handle real-world asset management and on-chain circulation—even Ethereum, Avalanche, and other platforms with a strong RWA focus were not originally designed to support the trillions of dollars in real-world assets.

The reason is simple: RWAfi's core mission is to enable real-world assets to freely circulate on the blockchain. Therefore, compared to DeFi and other on-chain applications, it not only has to deal with the complexity of traditional on-chain applications but faces a more significant challenge of making RWAs truly "active" on-chain:

· On one hand, bringing real-world asset ownership "on-chain" involves a complex asset tokenization process and multi-party collaboration, requiring solutions for security compliance, liquidity, cross-chain interoperability, and a developer-friendly technical environment to achieve efficient on-chain asset liquidity and transparency;

· On the other hand, mere tokenization is not sufficient after being "on-chain"; there is still a need for "empowerment," meaning that the true value of RWA lies in how to build a transparent, efficient, and liquid on-chain financial market through blockchain technology, which requires subsequent deep integration with DeFi protocols, revenue distribution, risk management, providing RWA with liquidity, composability, and interoperability similar to crypto assets;

Using real estate as an example, once tokenized and on-chain, it ceases to be a "static" asset in the traditional sense and can participate in various DeFi scenarios. For instance, it can transparently distribute rental income through smart contracts or be used as collateral for on-chain financing. This "empowerment" brings higher technical and ecological requirements, breaking the inherent limitations of RWAs as real-world assets and injecting them with a higher level of composability and application potential.

Therefore, perhaps many people have not realized that RWAfi is not just a technical solution; fundamentally, it has also created a new asset class with native real-world revenue attributes—by introducing real-world assets, capital, and cash flow, it injects the blockchain ecosystem with native "real revenue attributes."

In this context, although many blockchain networks have begun to explore the RWA field, most of them have only scratched the surface, lacking end-to-end technical support and ecosystem layout. After all, RWAfi's success lies not only in its completion of asset tokenization, but also in its ability to provide a full range of solutions from development to operation:

Developers and users alike need a more user-friendly development environment, a more efficient and scalable infrastructure, and a more secure and compliant underlying environment. Therefore, the core requirement for the future multi-billion or even multi-trillion dollar RWA incremental market is obvious—a dedicated RWA public chain.

It can meet the diverse needs of institutional users and crypto-native users alike. In this vision, the RWAfi public chain is not only empowering RWA assets but is more likely to become the core capturer of incremental value in the RWA ecosystem. By becoming a hub for liquidity and value settlement, all DeFi operations revolving around RWA tokenized assets (such as farming and collateral interaction) can aggregate value through the RWAfi public chain, further driving the incremental expansion of the RWA track.

In short, a dedicated L1 public chain for RWA is just a means, not an end—the players who can truly capture the incremental value of the RWA track will most likely be solution providers that can seamlessly and efficiently run the end-to-end RWA process from on-chain infrastructure to ecosystem empowerment.

Therefore, from this perspective, the golden age of RWA-specific chains has already arrived.

An Analysis of the "All-in-One RWA Dedicated Chain" from Plume

For RWAfi, there is another natural advantage:

No matter which track or product ultimately emerges under the RWA narrative, as long as the overall market size continues to grow, a RWAfi public chain platform that directly provides the most foundational support in infrastructure form can tap into a future market worth hundreds of billions or even trillions of dollars and capture the incremental value behind it.

After all, RWA has gradually become a key driver of on-chain digital asset increment, allowing Web3 to effectively tap into the massive asset pools of traditional markets—such as the global bond market ($133 trillion) and the gold market ($13.5 trillion).

It is worth noting that since Compound sparked the DeFi summer in 2020, the total on-chain digital asset volume has seen significant growth. Despite a substantial pullback from the $180 billion in November 2021, as of January 13, 2025, the on-chain TVL still stands at a staggering $113.5 billion.

Source: DeFiLlama

However, compared to the trillions of dollars in tokenizable RWAs (bonds, gold, stocks, real estate, etc.), this volume is still relatively insignificant. Therefore, RWA tokenization will undoubtedly bring a new incremental force to the on-chain world, opening up unprecedented market space for expansion.

However, there are very few Layer 1 blockchains positioned around RWAfi. Recently, Plume, which just completed a $20 million financing round, is almost the sole strictly defined RWAfi blockchain, making it a benchmark event in the RWAfi field so far.

Plume's notable feature lies in its modular design. Through an all-in-one solution, it systematically addresses RWA tokenization, compliance, liquidity, and interoperability issues, providing developers and institutions with a comprehensive solution covering the entire lifecycle of RWA tokenization.

This systematic approach is worth paying attention to. After all, for a blockchain, how "high-tech" the technology is is not as important as whether it can attract developers and users to choose and stay, which is the core competitive advantage. This is especially true for products like RWA, which involve high complexity both on-chain and off-chain. If a blockchain only provides fragmented services in one link, developers and institutional users will not be interested.

Plume's advantage lies in its integration of multiple modular key tools, providing developers with a complete on-chain solution for RWA asset tokenization. This toolset not only lowers the technical barriers but also directly incorporates compliance vendors into the platform's upstream supply chain through a "compliance-as-a-service" model, ensuring that tokenized assets meet regulatory requirements from the source:

· Arc - Tokenization Engine: Arc simplifies the tokenization process by integrating compliance workflows and reducing barriers for asset issuers, providing an effective path to bring RWAs onto the blockchain;

· Passport - Smart Wallet: Passport allows users to store contract code directly in their externally owned account (EOA), enabling RWAfi composability, yield farming, and advanced account abstraction features;

· Nexus - Data Highway: Nexus securely integrates real-world data into the blockchain using cutting-edge technologies such as zkTLS, enhancing on-chain asset security and transparency while unlocking new opportunity scenarios;

Through these modular tools, Plume not only empowers developers but also significantly lowers the barrier for traditional financial institutions to enter Web3. Developers can reduce technical barriers through modular tools to rapidly deploy complex RWA solutions; the "Compliance-as-a-Service" model can also help traditional institutions address compliance pain points while providing efficient technical support.

This means that giants from Web2 such as UBS and Blackstone looking to enter Web3 can directly embed RWA tokenization services provided by Plume into existing products through a one-stop RWA asset tokenization service, enabling rapid product iteration and market expansion.

This not only allows institutions to easily tokenize assets and introduce them to the blockchain ecosystem but also retains the seamless user experience of Web2, empowering users with asset ownership and Web3 attributes.

Taking a more macro perspective, in the previous Web2 world where private traffic was king, whoever could enclose and aggregate enough private traffic could maximize their profits. This led to the situation in Web2 where fat applications and thin protocols were formed, with super apps like WeChat, Alipay, and Meituan becoming increasingly massive, locking in users through closed ecosystems.

In Web3, there has been a clear reversal in product logic — underlying components or middleware-form products are becoming increasingly popular. They can be inserted as "building blocks" or used as fundamental infrastructure to maximize aggregated profits. Plume's modular infrastructure perfectly fits this Web3 product logic. It provides traditional financial institutions and Web2 giants with lightweight RWA integration tools, enabling them to quickly achieve Web3 transformation.

The attractiveness of Plume lies in this aspect. For the RWAfi track, the future competition is not just a showdown of technical abilities, but whether it can design an efficient and user-friendly ecosystem support system around developers and users. This model of connecting on-chain innovation with off-chain assets will become the true watershed for the development of the RWA track.

The RWAfi Roadmap: The Bi-Directional Link Between Institutions and DeFi "Circle"

For Web3, "incrementality" is an eternal theme—whether it is the injection of incremental funds or the expansion of incremental users.

The core charm of RWAfi lies precisely in its innate "bi-directional connection" attribute: on one hand, linking Web3 newcomers and veterans, and on the other hand, connecting with the massive traditional financial asset base. This not only provides new asset categories and revenue opportunities for crypto-native users but also opens up a path for traditional financial giants to deeply integrate with the on-chain DeFi world, thereby achieving a synergistic effect of "1+1>2."

Using Plume as an example, it has currently built a "two-pronged" ecosystem network with institutional partners at its core and DeFi partners for extension:

· Institutional Partners: Responsible for providing compliance, trust foundations, and high-quality assets, they are the trusted core of its RWAfi ecosystem;

· DeFi Partners: Provide flexible, high-yield asset participation for on-chain users, further enhancing RWA's liquidity and composability;

Upon closer inspection, you will find that Plume's institutional circle mainly focuses on traditional asset tokenization, compliance, and asset management. Through Plume's on-chain infrastructure, RWA gains higher liquidity and transparency, paving the way for deep integration between traditional financial giants and RWAfi. For example:

· Anchorage Digital Bank: Provides compliant custody services for Plume's on-chain assets, allowing institutional clients direct access to on-chain RWA returns;

· DeFiMaseer: An institutional partner focusing on carbon market tokenization, bringing $200 million in carbon emissions quotas onto the chain, optimizing regulatory market efficiency and accessibility;

· DigiFT + UBS: Collaborated to launch uMint, driving the tokenization process of on-chain financial assets;

· Dinari Global + Blackstone Group: Bringing Blackstone's ETF onto the blockchain to provide higher liquidity for institutional assets;

· Elixir + Blackstone Group: Supporting Elixir in building more asset circulation infrastructure on the blockchain;

· NestCredit + MountainUSDM + m0 Foundation + Anemoy Capital/Centrifuge: Building a multi-stakeholder network to drive the sustainable development of diversified on-chain assets;

· Pistachiofi: Introducing on-chain Real Yield services to the Latin America (LATAM) and Asia-Pacific (APAC) regions to expand regional market coverage;

· Busha: Providing on-chain Real Yield for the African market to broaden the global financial services boundaries;

· Cultured RWA: Exploring the on-chain potential of the RWA speculative ecosystem;

· Google Cloud: Utilizing AI to provide RWA pricing services, making on-chain asset pricing more intelligent and efficient;

DeFi protocols that have deep integration or partnerships with Plume mainly transform the stock dividends of traditional assets into on-chain incremental value, such as providing diversified participation opportunities for on-chain users through liquidity support, yield optimization, and new scenario exploration:

· Ondo finance: The flagship protocol for tokenizing US Treasury bonds (USDY), injecting trusted asset liquidity into Plume's RWA ecosystem;

· Anzen finance: Supporting on-chain stable asset innovation for USDz, optimizing the tokenization experience of USD-denominated assets;

· Royco (Berachain): Providing a transparent income liquidity market designed for DApp development and expanding into the RWAfi ecosystem through collaboration with Plume;

· Bouncebit: As a partner of the CeDeFi portal, it helps users access trusted institutional-grade yield products through its platform, strengthening RWAfi's influence in the CeDeFi field;

· Midas: Focused on high-yield, institutional-grade assets in DeFi projects, providing Plume users with more on-chain yield options;

· PinLink: A DeFi infrastructure provider, collaborating with Plume to introduce fragmented DePIN assets and yield opportunities, enhancing ecosystem liquidity;

· Avalon finance: Plume's BTCfi liquidity layer partner, focusing on BTC lending and circulation in the RWAfi environment, further expanding the use cases of on-chain assets;

Objectively speaking, the Plume team has a background that inherently combines "technology + market" genes — members include both DeFi players from Web3 giants like Coinbase, BNB Chain, Galaxy Digital, and seasoned professionals from traditional finance and tech industries like Robinhood, J.P. Morgan, Google. This enables them to effectively address the complex needs of the traditional financial market, leveraging the unique advantages of blockchain technology to build modular, compliance-friendly infrastructure.

Overall, Plume has now built a vast ecosystem that includes both Web3 newcomers and veterans (covering both on-chain and token domains) and traditional financial giants (covering off-chain and RWA categories), accumulating over 180 applications and protocols. The testnet has attracted over 3.75 million users and generated billions of transactions, showing remarkable results.

The collaborative network driven by a dual-wheel model has also formed an ecosystem layout jointly promoted by Web3 newcomers (on-chain, DeFi protocols) and traditional financial giants (off-chain, RWA), with Plume playing an indispensable role as infrastructure between the two. With the continuous development of the RWAfi ecosystem, Plume is expected to become an essential part of this demand.

This further strengthens Plume's unique positioning as a "dedicated RWAfi end-to-end infrastructure," directly capturing the core value generated by RWA assets in tokenization, liquidity integration, and on-chain operations — from asset minting to deep integration into the DeFi scene. It can provide complete technical and ecosystem support, truly achieving a seamless conversion of traditional asset value to on-chain increment.

From this perspective, this “full-lifecycle empowerment” is precisely the unique competitiveness of a Plume-like RWAfi dedicated chain. RWAfi public chains not only serve institutions and developers but also directly target all RWA users, capturing end-user participation value, thus sharing the dividend of the entire RWA ecosystem's scale growth and becoming the core engine driving the expansion of a trillion-dollar market.

Interestingly, as a track closely related to regulation, Plume actually has an easily overlooked potential policy advantage: Plume's investor Katie Haun, who has served as a former assistant U.S. attorney, digital asset coordinator, former a16z partner, and joined the Coinbase board, can be said to be one of the few with a profound understanding of the far-reaching impact of U.S. regulation on the blockchain industry.

This also means that her investment background makes Plume closer to the center of regulatory policy, an undoubtedly positive signal for Plume — as the U.S. regulatory framework gradually matures, especially after a series of crypto-friendly individuals from the Trump administration took office on January 20, Plume is expected to be the RWAfi project closest to the "core of U.S. regulation," thus directly benefiting from the greatest policy support and market dividend.

Conclusion

Great winds start from small ripples, and the logic of the market has always been subtle and indirect, with all narrative value discoveries having their inherent development logic.

It can be said that RWAfi is one of the few narrative directions that can bridge the gap between on-chain and off-chain realities. Its potential comes both from the innovativeness of Web3 and the stockpile dividend of traditional financial giants.

The value of RWAfi public chains goes without saying — as the infrastructure that can truly elevate RWA tokenization to the “RWA asset internet,” it has provided a viable answer for the billion-dollar growth of the RWA narrative.

As for top players like Plume, who have a dual focus on on-chain (DeFi) and off-chain (traditional financial institutions), whether they can excel in the future depends on their ability to continue to attract developers, build a solid ecosystem, and truly prosper the fusion of on-chain and off-chain RWA. After all, in an uncontested blue ocean, the opportunity is just beginning, and everything is an unknown.

This article is a contribution and does not represent the views of BlockBeats.

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$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.


Side Effects of ETFs


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.


Chart showing the trend of net outflows for Grayscale among the 11 institutions


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.


Robinhood Takes a Stand, Traditional Brokerages Join the Fray


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.



User Data Breach: Is Coinbase Still Secure?


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.


Visualization: ChatGPT, Source: Farside


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.


Visualization: ChatGPT


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.


CEXs are All in Self-Rescue Mode


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

"I personally have also allocated 20% to gold, expecting the price of gold to potentially rise to $10,000-20,000 by the end of this market cycle."

Key Market Insights for May 16th, how much did you miss out on?

1. On-chain Flows: $111.3M inflow to Ethereum this week; $237.6M outflow from Berachain 2. Largest Price Swings: $ETHFI, $NEIRO 3. Top News: Data: Solana Network's revenue reached $7.9M on the 13th, surpassing the sum of all other L1 and L2 chains

May 16 Key Market Information Gap, A Must-Read! | Alpha Morning Report

1. Top News: Coinbase Faces Double Blow with 'SEC Investigation' and 'User Data Breach,' Stock Price Drops by 7.2% 2. Token Unlocking: $ARB, $AVAX, $PRIME, $ASTR, $1INCH

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Revoke API Access for the "InfoFi" App to Reduce Platform Spam

BlockBeats News, January 15th, X Product Lead and Solana Ecosystem Advisor Nikita Bier stated, "We are revising our developer API policy: we will no longer allow those apps that reward users for posting on X (also known as 'InfoFi'). This mechanism has already caused a large amount of low-quality AI...
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