Decentralized Startup Financing: Is Coinbase Poised to Transform Entrepreneurship for Good?
Brian Armstrong, CEO of Coinbase, seeks to simplify the entire startup trajectory, encompassing everything from establishment through funding to public trading, all facilitated by distributed database technology.
During a recent session on the TBPN podcast, Armstrong detailed a vision where entrepreneurs can create their ventures entirely onchain.
He mentioned that startups could register online, acquire funds via smart contracts, and distribute tokenized shares without reliance on traditional banks or legal firms.
He stated that the existing financing model is “quite burdensome,” contending that distributed ledger could render capital acquisition “more streamlined, fairer, and more transparent.”
Rather than enduring prolonged waits for fund clearance, entrepreneurs can obtain immediate capital in USDC, initiate operations, and begin accepting crypto asset payments right away.
Over time, they can also trade their company shares publicly in a tokenized manner, all within a cohesive ecosystem.
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What’s Causing the 10,000% Surge in Transactions for Coinbase’s x402 Network?
Armstrong’s remarks resonate with Coinbase’s increasing emphasis on decentralized financial instruments. The company has recently integrated Echo, a fundraising network based on distributed ledger technology that it acquired earlier this year.
Echo has assisted over 200 startups in raising upwards of $200 million so far, illustrating what an onchain economy for startups could resemble.
With Coinbase already operating Base, its layer-2 platform that facilitates decentralized applications, this move into startup funding reflects a larger goal: to transform entrepreneurship into a seamless and transparent process akin to the blockchain itself.
Echo has enabled more than 200 startups to secure over $200 million. For the time being, it will function independently, but Armstrong noted that Coinbase intends to integrate it into its overarching framework gradually. This strategy would provide founders with direct access to Coinbase’s custody assets valued at $500 billion and its extensive crypto holder network.
Armstrong also mentioned that Coinbase is engaging with U.S. regulators to revise fundraising regulations that restrict non-accredited investors from participating in early investment rounds.
By broadening this access, he argued, startup ownership could become more inclusive, aligning with Coinbase’s open finance vision.
Analysts have suggested that the company is intensifying its focus on Base, its layer-2 distributed ledger, to attract additional onchain activity.
They also remarked that if a Base coin is released, it could lead to a market valuation of $12–$34 billion, with Coinbase’s proportional share estimated at $4-$12 billion.
According to Dune Analytics, the transaction volume on x402, an internet payments platform introduced by Coinbase in May, has surged by over 10,000% in the last month.
This network revives the historic HTTP 402 “Payment Required” status code, repurposing it into a mechanism for direct web payments using stablecoins, eliminating the necessity for credit cards or banks.
This is how it functions: when a user or AI agent requests a service that requires payment on the web, x402 generates a 402 response that solicits a stablecoin payment.
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What’s Driving the 10,000% Surge in Coinbase’s Onchain Payment Activity?
The transaction is signed, dispatched, and validated onchain in mere seconds. Coinbase’s team asserts that this concept rectifies what they term “the internet’s initial oversight,” the lack of an integrated payment system at the web’s inception.
From October 14 to 20, the network executed nearly 500,000 transactions, reflecting a 10,780% jump from the preceding month.
On Friday alone, it handled 239,505 transactions, while Thursday’s transaction volume hit $332,000, according to Dune data.
This uptick indicates a rising demand for seamless, onchain transactions that could revolutionize the flow of money across the web.
The increase coincides with an expanding interest in autonomous AI systems designed to execute blockchain transactions independently of human input.
CoinGecko has since introduced a tracker for the x402 ecosystem, which has quickly scaled into a $180 million trading market, surging 266% within the last 24 hours.
In August, Coinbase developers Kevin Leffew and Lincoln Murr indicated that these autonomous systems could manage tasks like API calls, data storage, and computation without human intervention.
They envisioned a future in which self-driving cars could pay for fuel using stablecoins, and programs could autonomously purchase decentralized storage through onchain funds.
Developers are currently exploring Coinbase’s x402 protocol, utilizing it to launch new tokens and memecoin initiatives. KuCoin Ventures noted that this “x402-powered” movement is catalyzing a fresh wave of coin issuances.
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The article Decentralized Startup Funding: Is Coinbase Set to Revolutionize Entrepreneurship Forever? was first published on 99Bitcoins.
