Thread 🧵: Why Coinbase is #NGMI

Here are five convincing reasons why Coinbase is NGMI

Coinbase has been experiencing a lot of backlash from the crypto community

Will Coinbase collapse or will it dominate the #Crypto market?

Here are five convincing reasons why Coinbase is NGMI:

🧵👇

tl;dr:

1. Unsustainable revenue model

2. User funds are not guaranteed in case of bankruptcy

3. Coinbase listing worthless tokens

4. Coinbase insider trading charges

5. Improper use of incentives

1/

Reason 1: Unsustainable Revenue Model

A report from @DeFiSurfer808 shows that @coinbase is an extremely profitable crypto retail brokerage

In 2021, 88% of Coinbase's revenue came from retail trading fees

7% from Subscription and service revenue

5% from institutional txs

2/

It charges a fee of 1.21% for users who buy #crypto through their application

The irony is that Coinbase's own website provides an option to buy #crypto for less than 1.21%

So why do people still use Coinbase despite high fees?

B/c they are not aware of any other options

3/

As the Crypto markets mature and competition rises, Coinbase will take a big hit on its revenue unless it finds some other revenue stream

But the problem is other revenue streams are unlikely to match their current retail trading revenue stream

4/

An extremely optimistic estimate from @DeFiSurfer808 shows, that their "other" revenue streams would equate to roughly $4 billion, which is already less than the current retail trading revenue stream at $6.5 billion

They are more likely to run out of revenue in the future

5/

Reason 2: User funds are not guaranteed in the event of bankruptcy

The 10-Q, filed with the SEC said "In the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings,

6/

and such customers could be treated as our general unsecured creditors"

With an unsustainable revenue model, it is highly likely that Coinbase will go bankrupt in the future

And general unsecured creditors are the last in line to claim their assets from Coinbase

7/

Reason 3: Coinbase listing worthless tokens on its platform

They seem to list a lot of tokens on their exchange that are either dead or have a negligible market cap

Coinbase has changed from a crypto-native company to being comprised of feds

Cobie @cobie

Coinbase listings team must be compromised by feds in some way. It's hard to imagine that the complete dogshit that they list on their exchange is anything other than an erosive attack to reduce quality and trust in industry. Universal pet income? The market cap is $34m. Jokers.

Coinbase Assets @CoinbaseAssets

Inbound transfers for Pawtocol (UPI) are now available on @Coinbase and @CoinbaseExch in the regions where trading is supported. Trading is not enabled at this time. Trading will begin on or after 9AM PT on Tuesday February 8, if liquidity conditions are met. https://t.co/qhnzYGwvFv

6/

Launching scam coins slowly erodes the exchange's reputation for quality and trust

People will begin to switch to exchanges that list tokens that have utility once they become aware that Coinbase is heavily flooded with shitcoins

Cobie @cobie

Polkamon, most well-known for being the subject of a Zachxbt thread when early backers dumped within the first week and it quickly dropped -95% or some shit. Coming soon to Coinbase!

7/

Reason 4: Insider trading allegation at Coinbase

@cobie has been exposing Coinbase wallets that frontrun the exchange listings for a long time

The ignorance of Coinbase to act on such information shows how much they care about credibility

Cobie @cobie

Found an ETH address that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published, rofl

8/

A former Coinbase Product Manager was recently charged by the SEC with insider trading

The fact that Coinbase was ignorant of the insider trading information from @cobie makes it likely that Coinbase themselves could be engaged in insider trading activities

So what?

JAIL!

9/

Reason 5: Improper use of incentives

Coinbase splurged $14 million for a Super Bowl Ad

On June 14, 2022, Coinbase lays off around 1,100 employees to reduce costs during the crypto winter

This demonstrates Coinbase's inability to effectively utilize its incentives

10/

To make things worse, Coinbase launches an NFT marketplace

Data shows that Coinbase's NFT marketplace has been a flop

All of this adds more fuel to the fire of the "Unsustainable Revenue Model"

There will be liquidity issues as a result of this foolish splurged spending

11/

All of the aforementioned reasons suggest that Coinbase is merely utilizing the network effect that has already been created

People will abandon the exchange and switch to the effective ones once they become aware of its flaws compared to others

Coinbase is probably NGMI!