Galaxy: Giving Up Creator Tokens—It’s Not Too Late for Base to Adjust Its Direction

Author: Lucas Tcheyan, Research Vice President at Galaxy Digital; Compiled by Shaw, Golden Finance

Last Wednesday, Base project lead Jesse Pollak announced that he would no longer be in charge of the Base client application business under Coinbase, and would instead focus on building the underlying infrastructure of the public chain. The application will be taken over by Jordan Fish (better known in the community by the nickname Cobie). At the same time, Base has redefined three main development priorities: trading, payments, and AI smart agents.

In a long, forthright post on X, Pollak described Q1 2026 as “a punch in the face,” and admitted that among the two tracks he had bet on over the past two years, half have already been declared failures. He had previously judged that the developer ecosystem and native on-chain social experience would lead the next wave of crypto adoption. The developer track has indeed produced results—stablecoins, prediction markets, and perpetual futures contracts have all been thriving; but the social track has completely fallen short of expectations. In his own words: Farcaster, Zora, on-chain mini-programs, and creator tokens “all crashed at once.” By shifting the focus toward social business earlier, Base fell behind in the core track. Its in-house native perpetuals application Avantis and prediction market project Limitless are both smaller in scale than competing products. Meanwhile, in the asset tokenization and payments tools track—where enterprises truly need them—Base has also fallen behind in progress.

Two days before Pollak’s post, Coinbase CEO Brian Armstrong spoke up first. Last Monday, Armstrong responded to skeptics on X, acknowledging that the creator token business “won’t work,” and that it was time to move on; but he also pushed back against the view that “AI smart agents are just another hype cycle.” He said that Base’s long-standing priority order has always been trading, payments, and smart agents, with the vast majority of R&D resources going toward the trading business.

Cobie (full name Crypto Cobain) joined the company last year after Coinbase acquired its fundraising platform Echo for about $375 million. Pollak said that this handover is effectively returning the client application business to the Coinbase Group, and that he will devote himself entirely to building Base as a “public chain serving global finance.”

Our View

It’s hard to say whether the timing of this announcement is coincidence—just two weeks after Robinhood Chain went live. Even if Robinhood Chain’s current hype is only driven by meme coin trading volume, that attention has also intensified market criticism of Base. Coinbase now faces direct competition with another company that has a huge retail user base and highly overlapping products. And Base previously poured a large amount of R&D resources into completely the wrong tracks—especially social and creator tokens—wasting its early-mover advantage.

Social trading is not a dead end. We hold the opposite view: social trading tracks are among the fastest-growing subsegments in the crypto industry, and social trading application FOMO’s recent valuation of $550 million is proof. The real failure was a narrow, unrealistic logic: that content itself can be treated as an asset, and that user posts can be used to mint dedicated tokens. This model splits capital and traffic across thousands of tokens with no tangible value backing; most can only support a frantic run for a few minutes, with the market hype fading instantly—leaving many ordinary investors who rushed in blindly to suffer losses. Jesse Pollak himself also issued a personal creator token, $JESSE, in November 2025. It launched with a market cap of $6.5 million, and later saw a maximum drop of up to 94%.

Beyond harming ordinary users, this business experiment also diverted team resources and market attention, while competitors continued to execute steadily in core growth tracks. At present, Base’s total open interest across the entire network in perpetual contracts is less than 0.1% of the combined total across all public chains. It also does not have any prediction market project with real active usage under its banner. Objectively speaking, Robinhood Chain also hasn’t taken shape yet in these two areas, but it has only just gone live. At the moment, the core tracks driving growth in the crypto industry—perpetual contracts, prediction markets, and asset tokenization—are also the most fiercely competitive tracks, and all public chains are going all in on them. Base missed the early-mover upside, and now only retains its own traffic channel as an advantage.

Even in the area of stock tokenization, Base has regulatory risk. In the CLARITY Act currently being advanced, Base will most likely not be able to obtain the relevant exemption provisions. If the public chain cannot further enhance decentralization, Article 301 of the bill may classify it as a non-decentralized finance trading protocol. Once that classification lands, Base would struggle to capture incremental business involving compliant tokenized securities in the U.S.; otherwise it would violate regulatory requirements related to securities registration.

But this doesn’t mean Base is an outright failure. Coinbase’s integration with Morpho to build a lending business achieved real success, with cumulative lending approaching $3 billion. Even though the scale is small, the on-chain AI ecosystem it is expanding continuously is in the first tier within the industry. Projects like Venice have increased on-chain activity through private inference and new forms of inference compute tokenization. Facing past strategic mistakes head-on, the team’s first step is to adjust course and incubate more high-quality businesses.

For exchange-backed public chains, the long-standing unresolved core question is: how to create performance growth for the parent company. BSC is the most successful example in this space, but it has early-mover advantages, has a platform-native token (whether Coinbase will issue its own token remains a huge unknown), and operates under a completely different regulatory environment. In our view, the best path for teams of this kind of public chain is to rely on the parent’s centralized exchange to cultivate the ecosystem with its built-in traffic, rather than simply attracting rent-seeking capital with short-term incentives—because once incentives fade, this capital will leave immediately.

At present, the market’s mainstream logic is DeFi “a hybrid business model.” When users use the product, they don’t perceive the underlying on-chain layer (the frontend is Coinbase’s compliant retail business, and the backend is a decentralized finance ecosystem). Once users become deeply bound to the ecosystem, the large user base naturally attracts developers to onboard, and new product development driven by permissionless public chains will propel the next round of growth. Of course, there may still be a turnaround in the creator token track in the future, but there’s no need to expect too much.

In any case, at least for now, Cobie is fully responsible for the Base client applications.