Originally published on: November 13, 2024
Coinbase made a strategic move by acquiring Utopia Labs to enhance its on-chain payments infrastructure, the cryptocurrency exchange announced on Nov. 13.
The team from Utopia Labs is set to join Coinbase’s Base, the layer 2 scaling network, to fast-track the development of on-chain payments within Coinbase Wallet, according to a blog post by Coinbase.
The synergy between Base and developers creating on-chain apps, which attract users on-chain, complemented by Wallet’s user onboarding efforts, forms a natural cycle that incentivizes more developers to build on-chain, explained Coinbase.
Base, launched in 2023, has now become the leading Ethereum layer 2 (L2) platform in terms of total value locked (TVL), surpassing Arbitrum. With approximately $3.15 billion in TVL, Base has gained prominence in the DeFi space.
Coinbase also introduced its own Bitcoin wrapper, cbBTC, on the Base network, which has quickly gained traction as one of the top BTC wrappers in the market, boasting over $1.3 billion in TVL, as per CoinMarketCap data.
Utopia Labs was known for its platform that facilitated crypto payments, especially with stablecoins. This acquisition aligns with the growing trend of buyouts in the Web3 ecosystem, with payments platforms becoming prime acquisition targets.
In a similar move, payment giant Stripe recently acquired stablecoin platform Bridge in a significant $1.1 billion deal to enhance its support for stablecoin payments.
The market response to Coinbase’s strategic moves has been positive, with the company’s stock surpassing $300 for the first time since 2021 following massive gains in the U.S. crypto stocks post-Donald Trump’s presidential election win.
Analysts anticipate a more favorable regulatory environment for the cryptocurrency industry under the new administration, which could benefit Coinbase’s staking business and drive cryptocurrency prices higher.
Coinbase’s stock currently trades around $290 per share, signaling a bullish sentiment among investors.
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