The venture capital arm of the largest cryptocurrency exchange in the United States is strategically shifting its investment focus toward real-world asset trading, decentralized finance (DeFi), and advancements in artificial intelligence over the coming year. In a recent blog post, Coinbase Ventures expressed its commitment to supporting projects centered around asset tokenization, specialized exchanges, and trading terminal development as well as next-generation DeFi and innovations in agentic AI.
Coinbase Ventures elaborated on its perspective, stating, “These are the categories where we believe the next big breakout companies and protocols will emerge, and where we’re looking to actively invest.” Since its inception in 2018, Coinbase Ventures has made a substantial impact, with 618 investments that currently include a diverse portfolio of 422 startups, as per data from PitchBook. The firm’s latest investment involved a stake in 0xbow, a DeFi compliance platform, made on November 18. Additionally, it has invested in various payment infrastructure enterprises such as Zynk and ZAR, as well as the prediction markets platform Kalshi in the preceding month.
In a discussion on social media platform X, Coinbase Ventures investor Kinji Steimetz shared insights on the anticipated growth of new asset exposure through perpetual futures contracts. These contracts are designed to provide synthetic access to off-chain assets, a development he finds promising. He also pointed out the emergence of “prop-AMMs” or proprietary automated market makers, a novel exchange design aimed at safeguarding liquidity providers from exploitation by high-frequency traders and bots.
Another Coinbase Ventures investor, Jonathan King, indicated a trend toward the development of prediction market aggregators. He envisions these aggregators becoming the predominant interface for consolidating approximately $600 million in fragmented liquidity, offering a seamless view of real-time event odds across various venues. According to investor Ethan Oak, the integration of perpetual futures exchanges with other DeFi protocols, such as lending platforms, would allow traders to earn yields on collateral while engaging in leveraged positions, thereby enhancing capital efficiency.
Oak also noted a burgeoning interest in on-chain privacy-preserving tools, highlighting a noticeable increase in developer focus on privacy-oriented assets like Zcash (ZEC). Meanwhile, King anticipates a proliferation of DeFi protocols that incorporate on-chain reputation alongside off-chain data, paving the way for unsecured borrowing on a larger scale. He emphasized the vast market potential, citing that the U.S. market alone has $1.3 trillion in revolving unsecured credit lines ripe for disruption through the efficiency and accessibility that crypto offers.
The discussion also touched on the AI sector, where three key innovations are expected to flourish. Steimetz pointed out that there remains a significant gap in training robotic and embodied AI systems due to limited and fragmented datasets. He suggested that decentralized physical infrastructure networks (DePIN) could provide an effective method for aggregating high-quality physical interaction data needed for advancing robotics.
Additionally, anticipated growth in “proof of humanity” solutions could address the challenge of verifying human-generated content versus AI-generated outputs. Hoolie Tejwani, the head of Coinbase Ventures, highlighted this area as a promising frontier for development by 2026. Lastly, King noted the potential for AI agent tooling that could empower non-technical founders, enabling them to swiftly launch on-chain businesses. He forecasted that by 2026, these AI agents could revolutionize the landscape of on-chain building by streamlining processes like smart contract code generation, security audits, and ongoing monitoring.
