Galaxy Digital: Giving up creator tokens; Base’s course adjustment is not too late

Author: Lucas Tcheyan, Deputy Head of Research at Galaxy Digital; Compiled by Shaw, Jinse Finance

Last Wednesday, Base project lead Jesse Pollak announced that he would no longer oversee the Base client application business under Coinbase and would instead focus on building the public chain’s underlying infrastructure; the application will be taken over by Jordan Fish (better known in the industry by his nickname Cobie), while Base has also re-established three core development directions: trading, payments, and AI intelligent agents.

On X, Pollak published a lengthy, candid post in which he described Q1 2026 as a “wake-up slap,” and admitted that of 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 mass adoption in crypto. The developer track has indeed delivered results—stablecoins, prediction markets, and perpetual futures contracts have all flourished; but the social track completely fell short of expectations. In his own words, Farcaster, Zora, on-chain mini programs, and creator tokens, “all collapsed across the board.” By shifting the focus toward the social business earlier, Base fell behind in the core tracks. Its own native perpetual futures app Avantis and prediction market project Limitless are both behind competitors in scale; meanwhile, in the asset tokenization and payments tooling track that enterprises truly need, Base is also lagging in progress.

Two days before Pollak’s post, Coinbase CEO Brian Armstrong was the first to respond. Last Monday, Armstrong took to X to reply to critics, admitting that the creator token business “doesn’t work” and it’s time to move on; but he also pushed back against the view that “AI intelligent agents are just another round of hype.” He said that Base’s long-standing priority order has always been trading, payments, and intelligent agents, and that the vast majority of R&D resources have gone to 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 essentially returns the client application business to the Coinbase group, and that he will devote himself fully to it, building Base as a public chain “serving global finance.”

Our view

It’s hard to say whether the timing of this announcement is purely coincidental—only two weeks after Robinhood Chain went live. Even if Robinhood Chain’s current frenzy is driven only by Meme coin trading volume, this buzz has intensified market criticism of Base. Coinbase now faces a direct competitor with a massive 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 the first-mover advantage.

Social trading itself is not a dead end. We hold the opposite view: social trading is one of the fastest-growing sub-segments in the entire crypto industry—evidence is that social trading app FOMO’s recent valuation reached $550 million. The real failure lies in a narrow, reality-detached logic: the belief that the content itself can be an asset, and that users posting content can mint their own dedicated tokens. This model spreads capital and attention across thousands of tokens with no tangible value backing; most can only sustain frantic speculation for a few minutes, after which the market turns instantly and countless ordinary investors who blindly entered suffer losses. Jesse Pollak himself previously issued a personal creator token, $JESSE, in November 2025; it listed with a market cap of $6.5 million, and later its biggest decline reached as much as 94%.

Beyond harming ordinary users, this business experiment also diverted team resources and market attention, while competitors continued rolling out in core growth tracks. At present, Base’s total open interest in perpetual futures across the entire network accounts for less than 0.1% of the combined size of all public chains, and it also has no prediction market project with truly active usage. Objectively speaking, Robinhood Chain is still not yet formed in these two areas as well—but it has only just launched. **The key tracks that are driving growth in crypto right now—perpetual futures, prediction markets, and asset tokenization—are also the most intensely competitive tracks, with every public chain pushing hard.**Base missed the first-mover benefit, and now only has its own traffic channels left as an advantage.

Even in the field of tokenized stocks, Base also faces compliance risks: under the currently advancing CLARITY Act, Base will likely be unable to obtain relevant exemption provisions. If the chain cannot further increase decentralization, Article 301 of the act could classify it as a non-decentralized financial trading protocol. Once such classification takes hold, Base would struggle to capture incremental business related to U.S. compliant tokenized securities; otherwise it would violate regulatory requirements related to securities registration.

But that does not mean Base has failed across the board. Coinbase’s integration of Morpho to build a lending business has achieved real success, with cumulative lending volume nearing $3 billion; even though the scale is small, its on-chain AI ecosystem is continuously expanding and ranks in the first tier within the industry. Projects like Venice have increased on-chain activity through private inference and new inference compute tokenization. The team directly confronted past strategic missteps—this is the first step toward adjusting course and incubating more high-quality business.

For exchange-backed public chains, the long-standing unanswered core question has been how to generate performance growth for the parent company. BSC is the most successful case in this area, but it has first-mover advantages, a platform-native token (whether Coinbase will issue its own token remains a huge unknown), and it operates under a completely different regulatory environment. In our view, the optimal path for teams of this kind of public chain is to cultivate an ecosystem by leveraging the centralized exchange’s built-in traffic from the parent company, rather than relying purely on short-term incentives to attract profit-seeking capital—once incentives fade, such capital will leave immediately.

At present, the mainstream market logic is DeFi’s “mixed business model.” When users use the products, they cannot perceive the on-chain infrastructure behind them (the front end is Coinbase’s compliant retail business, while the back end is a decentralized finance ecosystem). Once users become deeply bound to the ecosystem, the large user base naturally attracts developers to build new products on an unpermissioned public chain, driving the next round of growth. Of course, the creator token track may still see a turnaround in the future, but there’s no need to hold overly high expectations.

In any case, at least now, Cobie fully takes charge of Base’s client application business.