Compiled by TechFlow
Guests: Brandon Millman, Phantom CEO; Luca Netz, Pudgy Penguins CEO
Moderator: Laura Shin
Podcast source: Unchaind
Original title: Companies Are Racing to Bring People Onchain. Who Is Best Positioned?
Air Date: August 21, 2025
Summary of key points
Cryptocurrency is entering a critical phase in the fight for mass user adoption.
On this episode of Unchained, Phantom CEO Brandon Millman and Pudgy Penguins CEO Luca Netz discuss who will win the hearts and minds of the next 100 million cryptocurrency users.
Will product-driven startups be the first to break through? Will Web2 giants like X and Meta seize the market? Or will crypto-native applications like Phantom emerge from behind? From competition in the payments sector to the war between trading platforms to the grand vision of the "universal app," the two panelists analyzed where the real value will accumulate and explained why the era of "easy money" for entrepreneurs is over.
Summary of highlights
Coinbase should focus on becoming the “JP Morgan” of crypto.
The form and purpose of trading are changing significantly, becoming more and more like an entertainment or thrill-seeking activity.
The real winners will be those companies that can not only attract the next generation of users but also effectively respond to changes in the on-chain environment.
Whoever can seize the latest trends in on-chain finance and innovate in a "chain-first" manner, while perfectly integrating with the new generation of attention economy, may become the biggest winner in this field.
In the crypto industry, the barrier to entry is very low, yet the potential for creating a billion-dollar company is incredibly high. The future will be one where top entrepreneurs continue to dominate, with the few best entrepreneurs widening the gap with the rest. Competition in the industry will intensify, forcing everyone to discover who truly stands out.
The era of relying on speculative expectations is over. The focus now is on leveraging hyper-financialization and global payment networks, combined with global liquidity and composability, to truly build disruptive technologies that can change the world, rather than simply promoting a story or narrative about world change without actual action. The future will be an era of results-driven success, not one driven by speculation.
As cryptocurrency momentum returns, I hope Pudgy Penguins becomes the most familiar and credible IP that resonates emotionally with users.
Over the past few years, Phantom's user base has far surpassed MetaMask, and more people are connecting to the crypto ecosystem through Phantom. This proves our theory that user experience is the bottleneck for industry development.
As an entrepreneur, you must choose your battles and understand your strengths and weaknesses. Facing your true self, successful entrepreneurs focus on one area. Trying to do everything at once is nearly impossible and doomed to failure.
What stage is cryptocurrency currently in?
Brandon still believes now is a good time to build crypto
Laura:
We are at a critical stage in the development of cryptocurrencies, with the current focus seemingly on user adoption. Many large fintech companies, banks, and even multinational corporations are actively investing in the crypto space, or at least exploring how to enter this market. At the same time, we are also seeing cryptocurrency companies partnering with these traditional businesses or gradually entering traditional financial sectors, such as payments.
Let's first review the overall history of cryptocurrency. How would you characterize the current phase? How does the task facing entrepreneurs differ from previous cycles or earlier stages? We'll first ask Brandon to share his thoughts.
Brandon :
I'm excited to have the opportunity to talk about Phantom and the latest developments in the crypto space. As a founder and entrepreneur of a crypto company, I think it's a very exciting time right now.
User adoption of cryptocurrencies has surged recently, with almost daily news reports about fintech companies or traditional financial institutions (such as banks) entering the crypto space in some way. This phenomenon is the culmination of significant efforts over the past several phases of development. Over the past few years, the industry has focused on infrastructure development. From a technical perspective, this has included continuously optimizing blockchain speed and cost-efficiency; from a developer perspective, we have advanced tool development; and from a regulatory perspective, we have gradually established a more robust framework. These efforts have further matured the cryptocurrency technology and application ecosystem. It can be said that over the past few cycles, the primary focus for entrepreneurs has been to cultivate infrastructure.
Today, these efforts are converging and generating explosive growth. The powerful network effects and compounding value of an open, permissionless ecosystem are accelerating the adoption of cryptocurrencies. I believe we are gradually seeing the emergence of this "rapid growth effect." This is my overall view of the current stage.
Luca sees the current moment as a “turning point” for the industry
Luca:
I see the current phase in the crypto industry as a "turning point," a critical paradigm shift. When we were evaluating the acquisition of Pudgy Penguins, my co-founders and I discussed this. I told them, "In crypto, the barrier to entry is very low, and the probability of creating a billion-dollar company is very high." This phenomenon used to rely primarily on storytelling and expectations of future potential. But now, that paradigm is shifting. More and more talented entrepreneurs are entering the space, and I believe the future will be one where the top entrepreneurs continue to dominate. We'll see the effects of a "power law" unfold, with the few best entrepreneurs widening the gap with the rest. Competition in the industry will intensify, forcing everyone to identify the true leaders.
At the same time, I believe the era of relying on speculative expectations is over . The future entrepreneurial environment will be even more challenging. The past model of easily accumulating value by building new asset classes and technologies no longer applies. The era of non-professional entrepreneurs easily creating billion-dollar companies is over, and I think this is a good thing. The focus now is on how to leverage hyper-financialization and global payment networks, combined with global liquidity and composability, to truly build disruptive technologies that can change the world, rather than simply promoting a story or narrative that changes the world without actual action. I believe the future will be an era of results-driven success, not one driven by speculation. This is good for the industry.
Now that the crypto world is open, these opportunities have always existed, but not everyone has seen them. Frankly, I hadn't noticed the missing piece in the consumer cryptocurrency funnel. But if crypto is to truly achieve the massive breakthrough we've been waiting for, there are still some issues that need to be addressed, one of which is optimizing the consumer journey and driving widespread adoption of stablecoins. I believe stablecoins will become a popular medium of exchange, enabling ordinary users to easily transact through on-chain applications. One of the biggest hurdles in the cryptocurrency user growth curve is completing the "0 to 1" transition. Saran, if you're listening, I think Phantom may have the best "0 to 1" transition in the crypto space, especially in the Solana ecosystem. It's a significant paradigm shift: stablecoins allow users to access on-chain USD assets to support their spending in applications.
Cryptocurrency dominates the hyper-financialized landscape, and in a world coexisting with AI, this "power law" of growth will only intensify. Top entrepreneurs will become even stronger, while more in the middle will seek new opportunities. And nowhere is this opportunity better than within cryptocurrency's on-chain payment networks. Furthermore, I'm observing that top entrepreneurs from other industries are entering the crypto space and competing, further raising the bar for the industry as a whole.
The two's personal experiences, challenges and opportunities in starting a business in Web3
Laura:
Before we delve into the different market participants in the crypto space, I'd like to ask you two about your respective roles. You've both achieved significant success in expanding the reach of cryptocurrency and attracting more users. I'm curious if you could share some personal experiences on how you achieved this, and how your thinking has evolved as the industry has evolved.
Brandon:
I began my career in technology working on Twitter's early teams from 2013 to 2017. There, I learned how to build large-scale internet applications for tens to hundreds of millions of users. Later, during the 2017 ICO white paper craze, I entered the crypto space and joined 0x, an early DeFi startup. There, I gained a deep understanding of the concept of DeFi and helped define the decentralized exchanges widely used today. During this process, I realized the importance of user experience in driving crypto adoption and discovered that one of the industry's major bottlenecks was wallet design. Wallets are a key entry point for users into crypto, determining whether they will register and complete transactions. Recognizing the crucial role of wallets in driving industry development , we began conceiving Phantom, initially aiming to provide a better user experience as a competitor to MetaMask.
Fast forward a few years, and our user base has far surpassed MetaMask, with more people entering the crypto ecosystem through Phantom. This proves our theory that user experience is the bottleneck to industry development. If we apply the lessons learned from Web 2.0 to crypto, we can uncover numerous opportunities for improvement. Looking ahead, I believe the infrastructure phase is complete; users and capital are now in place. Next, we need to focus on providing users with the best experience, earning their trust and business, and helping them manage their funds securely. This will be the next phase for crypto.
Luca:
I'd like to add that, from an external perspective, Phantom's success story truly embodies the principle that "the best product wins." You built the best wallet, and users naturally flocked to it, leading to breakout growth. When your product is vastly superior to the competition, especially in key aspects of the crypto experience, you achieve tremendous success. I'm a devoted Phantom user, and thank you for developing such an excellent product!
At Pudgy Penguins, our product is a penguin character and IP, which is different from a functional product. I realized that a problem in the crypto space is that cryptocurrency is taboo and intimidating to many people. So what can break this taboo? The answer is adorable penguins. Therefore, our strategy is to attract users through emotional connection rather than direct conversion. I try to fill the emotional gaps of consumers and build a deep connection with them. When we create many touchpoints with consumers and build trust, they will either actively explore the crypto space or we will guide them into it.
Therefore, our conversion process is more about reaching consumers multiple times and building trust and credibility. As cryptocurrency regains momentum, I want Pudgy Penguins to become the most familiar and credible IP, resonating emotionally with users. Our marketing strategy is primarily based on touchpoints. Many people view our toys at Walmart as a revenue stream, and while that's certainly true, what really excites me is the marketing impact of these products as touchpoints. Even when users are off their computers or phones, we can still connect with them through these products. I believe Pudgy Penguins can hold a significant cultural position in the crypto industry. This is where we've found our niche. From this perspective, our strategy involves both messaging and storytelling. Pudgy Penguins is the face of crypto, its mascot, and its comeback story.
Our goal is to connect with users where they are. Whether it's Google, Instagram, X, or other social networks, you can see penguins everywhere. We wanted to create something with universal appeal, which was actually a byproduct of the intellectual property I inherited or purchased. I think a key goal for us is how to get the whole family involved. If cryptocurrency is to truly achieve mass adoption, how can every member of the family be able to participate and enjoy the cryptocurrency ecosystem? From our perspective, intellectual property plays a critical role in this space. Pudgy Penguins is particularly good at bringing together people from different backgrounds and psychographics. I believe that the combination of these strategies has enabled us to achieve the growth we've achieved over the past few years, which is a product of these principles.
Who will lead the next wave of users into the crypto space?
Laura:
Obviously, cryptocurrency isn't a single sector. There are many ways to enter the crypto ecosystem. I believe the following players may play a significant role or have the potential to become dominant players in this space: First, Coinbase , as it's incredibly large, but its audience is primarily existing crypto users; there's also Robinhood, and of course, Stripe. X also clearly wants to be the "everything app" and has partnered with Polymarket, explicitly stating this as their goal. This clearly competes with Base, as this is their direction. Furthermore, stablecoins are clearly a crucial component of the next phase, with companies like Tether and Circle , as well as newer players like Ethena and other new stablecoins like Stable Plasma.
When you look at the landscape, are there any particular players that have an advantage over others? Or how do you think the space will evolve? I know this is a broad question, and we can get more specific about different parts of the market later. But overall, how do you see the landscape?
Brandon:
Overall, the crypto space is currently a positive-sum environment. Every new entrant injects more vitality into the ecosystem and drives the development of tools that make crypto easier to enter, which is a positive for the industry as a whole. Personally, I believe now is the best time to enter the crypto space. As Luca mentioned, we are at a critical inflection point.
Looking at specific players, I think Stripe is a player worth watching. Payments have long been considered one of the most promising application scenarios for crypto technology, offering benefits such as cross-border fund transfers, low-fee transactions, and instant deposits. However, this sector is underdeveloped in the US market. While areas like DeFi and NFTs have garnered more attention in recent years, I believe Stripe has the potential to achieve breakthroughs in payments and potentially bring significant innovation to the entire crypto industry. Furthermore, X (formerly Twitter) is another player worth keeping an eye on due to its massive user base. This includes not only active crypto users but also many casual users who may have never touched cryptocurrencies. I believe X has the potential to become a key entry point, bringing new users to the entire crypto ecosystem. These are two players I'm currently very interested in, and we can discuss their specific strategies further, but this is my initial assessment.
Luca:
I think there are three players worth paying special attention to, two of which you've already mentioned, and one that's perhaps lesser-known. First and foremost is USDC . If stablecoins go mainstream, USDC will undoubtedly play a significant role. Its brand positioning, trustworthiness, and name recognition are all very strong. If a winner emerges in the stablecoin space, USDC will likely be the leader.
Next up is Robinhood, which I believe is a true dark horse. While Coinbase's product hasn't quite lived up to expectations yet, and I say this as a devoted Coinbase user and supporter, Robinhood's product team is exceptional, arguably one of the strongest in fintech. Their product design is exceptional and deeply rooted in people's minds. As a heavy Robinhood user, I can say it's become a complete part of my daily financial life. If they can successfully enter the on-chain space and launch a high-quality product, I believe they will become a significant player in the crypto space.
The final player worth watching is World Liberty Financial. They employ a similar thesis to Anchor, but without relying on high yields and the risks associated with Luna. Their product-market fit is very real and effective. I believe they have great potential in the crypto space, particularly within the EVM ecosystem.
The importance of distribution, and why Luca was so eager to invest in Phantom
Luca:
Furthermore, Brandon, I believe Phantom should also be included. If anyone is willing to sell Phantom shares on the secondary market, I would be very interested, as I believe middle-layer businesses have tremendous value capture potential. The middle layer refers to the service layer connecting consumers to the blockchain, effectively capturing value while preventing value leakage. Phantom has proven itself, and its advantage lies in its control over user behavior, which gives them the flexibility to launch any new, potentially profitable business. For example, if Phantom launched a token transmitter, I believe they have the potential to become a significant player in the market, perhaps even dominate it. This model is critical to controlling the user interface, as ultimately value is concentrated in the hands of the team that directly serves users.
From a broader perspective, blockchain itself lacks profitability, and the middle-layer business is the true core profit source. By optimizing its user interface, Phantom can provide users with a convenient, bank-like experience while also capturing the potential value in areas like stablecoin payments. I'm particularly excited about Phantom's exploration of stablecoins. Laura, if you feel we've strayed from the topic, feel free to redirect the discussion. However, I firmly believe that the middle layer will be the most important and profitable business layer in the crypto space. Phantom's product has demonstrated exceptional capabilities and is one of the best in the industry. If they decide to go public in the future and seek to increase revenue, I believe they can create significant profit opportunities.
I'm also curious to see if Phantom is profitable through perpetual contract trading. I think they are, and it's a very clever model. Controlling the middle layer will be the most successful business model in crypto and the primary source of profit. That's why I'm always willing to provide secondary market investment to Phantom or its team.
Brandon:
I believe that controlling the end user is the most important and strategic position in the crypto industry. This applies not only to crypto but also to the core principles of internet development. Perhaps you, or some in the audience, are familiar with Ben Thompson's Aggregation Theory. Before the internet, the structure of the value chain was very different. Back then, value was primarily concentrated in the hands of suppliers, such as retailers, newspapers, television stations, and record companies, while distributors played a relatively minor role.
I believe that controlling the end user is the most important and strategic position in the crypto industry. This applies not only to crypto but also to the core phenomenon of the internet's development. Perhaps you, or some in the audience, are familiar with Ben Thompson's Aggregation Theory. Before the internet, the structure of the value chain was very different. Back then, value was primarily concentrated in the hands of suppliers, such as retailers, newspapers, television stations, and record companies, rather than distributors.
The advent of the internet changed this landscape, redefining the distribution of value through an open, permissionless communication layer. Distribution became easier, and the supply infrastructure was already in place. What truly matters is controlling the points of distribution and becoming the aggregator of the user experience. Phantom's structure is similar. Cryptocurrency blockchains provide an open, permissionless way to create, store, and transfer internet value. This open structure enables developers around the world to deploy new projects and experiment with innovation. The points of distribution are wallets and other user-facing applications, which help users discover and use these services securely and easily, and gradually earn their trust.
This approach also allows us to launch diverse business lines, such as perpetual contract trading, which has recently become very important to us. Furthermore, as Luca mentioned, we are also considering other potential business lines, such as stablecoin payments. These explorations will further strengthen our advantages in the middleware business.
Who is likely to win the competition in the payments sector, and what are their advantages?
Laura:
Currently, the main competitors in the payments space include the partnership between Coinbase and Shopify, Stripe's Tempo, and several stablecoin chains like Plasma and Staple. In my opinion, these are the major players in this space. Of course, there are others, such as PayPal, which launched its own stablecoin, but it hasn't really taken off yet. So, I'd like to ask you how you think the competition will unfold, which players may have a stronger advantage, and what factors may determine victory or defeat?
Brandon:
I believe another significant competitor is USDT . It plays a crucial role in payments, particularly in non-US markets. The payments landscape can be divided into two main types: peer-to-peer payments, which involve direct transfers between individuals; and consumer-to-merchant payments, where users pay merchants for goods or services. These two payment methods present distinct needs and challenges.
The biggest barrier to consumer-to-merchant payments is merchant willingness to accept cryptocurrency. Many merchants are currently unfamiliar with cryptocurrency and prefer to receive payments directly in US dollars. This presents a major challenge to further development in the payments sector. I believe Stripe has a significant advantage in addressing this challenge due to its extensive merchant distribution network. Beyond physical points of sale, Stripe also holds a significant market share in the e-commerce sector, giving it a unique competitive advantage on the merchant side.
Laura:
So, I want to ask more directly: Even if Coinbase has already reached a partnership with Shopify, once Tempo launches, is the competition over?
Brandon:
Absolutely not. I don't think Tempo has even officially launched yet, and we don't have a clear picture of its actual performance yet. I don't think the biggest winner in this space will emerge in the short term. Therefore, it won't be a single product that instantly wins the market upon launch. Currently, merchant acceptance remains the biggest challenge, and Stripe may be the player with the most potential to address this. Of course, there's still a lot of work to be done in terms of consumer experience. For example, Phantom, as Luca mentioned, could be a key entry point into the crypto space, especially in bringing stablecoins to users. So I think Phantom could become a significant player in this space in the coming years. Overall, however, this competition will take time to fully unfold.
In the US market, the demand for peer-to-peer payments is largely met. For example, ordinary users use Venmo and Square Cash, finding these payment methods convenient enough. However, in emerging markets, traditional payment infrastructure is often underdeveloped or even nonexistent. This is why USDT has been widely adopted in these markets, where its value proposition is clear. Therefore, I believe that consumer-to-merchant payments will likely take off first in the US market, as the value proposition is clear to merchants. Through crypto payments, merchants can save on high credit card network fees while also leveraging blockchain technology for more efficient fund flows. This combination has the potential to drive development in the payments sector.
Luca:
Laura, when you mentioned the success criteria for stablecoins, could you define them more clearly? I think this question can be answered from different perspectives. If we look at it from the perspective of new B2C users, the answer might be different; if we look at it from the perspective of monthly or annual stablecoin trading volume, the answer might be different again; and if we look at it from the perspective of peak revenue, the answer might be different again.
I think I was primarily thinking in terms of user growth and transaction volume. But I agree that there should be two distinct phases, as Brandon mentioned. Personally, I think it will probably start with Stripe getting stablecoins into users' hands and getting them used to using wallets and other things. But ultimately, I do think people will start using stablecoins for peer-to-peer payments. So this could be a two-phase adoption process. I'd be very interested if you could answer questions about each of these phases separately.
The answer depends on the specific circumstances. I believe Stripe would be hard to beat if it could automatically convert all transactions into stablecoins. This approach is technically feasible and would provide the revenue and other associated advantages. If Stripe can achieve this, it would be difficult to surpass in terms of transaction volume.
That's why I believe it's either a team like Phantom or a new startup that will achieve breakthroughs in this field. I believe Phantom's roadmap may already include similar initiatives. For example, consider the businesses of PayPal, Square, and Zelle. If these businesses could be migrated to blockchain payment rails, combined with wallet functionality and robust deposit and withdrawal solutions, this would represent a $100 billion business opportunity. Through blockchain technology, these applications will transcend national borders, expanding their market share from the United States to anywhere with an internet connection worldwide.
Does Solana's Seeker Phone Have a Chance to Break Through the Market?
Laura:
I know you mentioned earlier that you weren't particularly interested in the Stripe topic. But while listening to you speak, I suddenly thought of Solana's Seeker phone. It's a really interesting product; it's both a hardware device, a hardware wallet , and a phone, with integrated biometrics and other features. I'm curious if you see this as a completely different approach? A way to innovate into the market outside of traditional paths?
Luca:
I think so. However, whether it's a hardware product or something else, to succeed in the market, it has to be a better product, or at least look like a better product. It has to be close to existing excellent products. The problem is, as a mobile phone, it's hard to surpass existing giants like Apple and Android. Unless top talent joins, it's difficult to achieve a breakthrough. I think Solana Seeker may have broader significance than just the payments sector we've been discussing so far.
From a payments perspective, if the Seeker phone attempts to directly compete with the Phantom in the stablecoin payment space, I don't think it has much of a chance, as it adds additional complexity for users. However, in other scenarios, hardware does have its own unique value. I believe the Seeker phone can serve as an ecosystem product, supporting multiple functions beyond payments. For example, it could enable broader crypto applications through blockchain technology, an area where Brandon's Phantom is already a leader.
However, I believe the Seeker phone, as a crypto hardware device, is a very meaningful endeavor from the perspective of the blockchain ecosystem. Blockchain technology requires a better user interface, and hardware products are a field that few have explored. This is a bold and ambitious endeavor, and I support it. This product has many potential features that can improve the user experience in crypto. However, from the perspective of stablecoin payments alone, its impact may be limited.
Brandon:
Thank you, Luca. I generally agree with your points, especially regarding Phantom's market leadership. Regarding the Seeker phone, I think the market logic for hardware and software is completely different, especially when it comes to economies of scale. To me, it doesn't seem like a wise move for the Seeker phone to directly compete with the iPhone. I think the Seeker phone should aim for a completely new direction, and Solana has a real advantage in this regard. They're well-funded and able to push their vision and lead the industry. So I think the Seeker phone is a great showcase for the potential of crypto technology.
However, I personally think it's difficult for it to truly compete directly with Apple and Android. That being said, I do believe the crypto space needs a hardware wallet revolution. It's been a while since Ledger became the dominant hardware wallet, and we haven't seen a new breakthrough. I'm very excited to see what the Seeker phone can do in this regard.
Perhaps we can return to our earlier discussion a bit and talk about global peer-to-peer payment super apps that leverage stablecoins to enable global interactions and payments, an area where PayPal and other traditional companies have struggled.
As we've mentioned before, large, publicly traded companies often face constraints on innovation in the crypto space. They find it difficult to venture into cutting-edge areas for fear of damaging their existing core businesses. I believe this isn't a problem on their part, but rather a structural constraint. It's difficult for these companies to effectively advance the crypto space.
On the other hand, many companies have attempted to develop apps similar to Crypto Venmo or Crypto Square Cash, but the biggest challenge these apps face is the "cold start problem." Payments are social in nature, involving transfers from one user to another, and both parties must use the same app. This type of adoption is incredibly difficult to scale from scratch. For example, if a new app attempts to compete with Venmo, why would users choose it instead of continuing to use Venmo, which their friends and family already use? This is a very difficult challenge to solve.
Therefore, I believe the players who truly have an opportunity to enter this space are likely to be those with a large existing user base. These companies have already established connections with end consumers and a broad user base, and can then layer new businesses and applications on top of that. For example, our team currently occupies this market position, and companies like Robinhood and others have similar advantages. This dynamic creates a significant barrier for new players starting from scratch.
How Robinhood Uses Privy and Bridge to Dominate the Crypto Ecosystem
Laura:
I believe crypto has, to some extent, solved the "cold start problem." For example, as long as the blockchains are compatible, multiple wallet providers support USDC on Ethereum, or Tether on Tron, which does reduce the difficulty of adoption. However, regarding stablecoins, I'd like to hear your thoughts on Stripe's acquisitions of Privy and Bridge. How do you think these acquisitions will help Stripe? Or how will they promote the adoption of stablecoins?
Brandon:
I believe Bridge is a key acquisition for Stripe. For Stripe to enter the stablecoin space, it needed the ability to issue stablecoins, and Bridge's technology perfectly supports this. Bridge's core functionality encompasses two key areas: supporting stablecoin issuance and providing coordinated management of stablecoins. Without Bridge, Stripe would have had to develop these capabilities from scratch. However, the Bridge acquisition allowed them to rapidly advance their product roadmap, gaining access to an exceptionally talented and efficient team. This provided Stripe with robust technical support for stablecoin issuance, cross-chain transfers, and integration with bank accounts. This was undoubtedly a significant boost.
As for Privy, I think it's also a very interesting acquisition. While it's unclear how Privy's technology will fit into Stripe's overall architecture, one obvious use case is addressing the issue of merchants accepting cryptocurrency payments. Many merchants are reluctant to accept cryptocurrencies because they're unsure how to store and manage these assets. Privy's wallet technology could help Stripe streamline this process, making it easier for merchants to accept cryptocurrency payments. So, while I may have strayed from the original question, it's clear that these acquisitions are core infrastructure pieces for Stripe and will help it realize its plans more quickly. I'm very excited about their potential.
Luca:
Brandon has already answered your question very comprehensively. However, I have a strategic thought to share. As a Phantom fan, I believe, Brandon, that one of the hallmarks of your team's success is pre-installing the Phantom app on phones. This is a major strategic breakthrough, and one you should focus on full-time. Getting the Phantom app pre-installed on phones, especially those in emerging markets, is key.
You don't need to jump directly into the mainstream Android market, as Android's market reach might be too broad. Just like YouTube's early strategic breakthroughs, you can start with smaller phone brands. This is especially true in developing countries, such as mobile phone companies in Africa. If Phantom could become a pre-installed app on these phones, it would be a huge opportunity. You'll need someone dedicated full-time to promoting this initiative. This way, you can expand your user base globally while simultaneously driving the development of the crypto ecosystem.
The impact of the new trading war on Robinhood, Coinbase, and Kraken
Laura:
While Phantom wasn't pre-installed on the Seeker phone, it was prominently featured when I opened it. I remember it being one of the first apps I downloaded, as the interface essentially directed me there. But let's talk about trading. I know you'll be interested because it involves Robinhood. This is clearly another important development in the crypto space and one of the key drivers of its long-term growth.
Currently, we see two major players—Robinhood and Coinbase—entering the perpetual swap space and beginning to expand into the derivatives market. Furthermore, there are numerous attempts at tokenizing stocks or equity. This makes me curious: as you look at these companies' various attempts in this space, which ones do you think have the strongest advantage? Which products are likely to succeed? Which products may struggle to break through due to structural issues or inadequate marketing strategies?
Brandon:
This topic is truly vast, with many angles to explore. Overall, I believe trading behavior is evolving with the times. In our parents' generation, trading was a serious financial activity, typically undertaken by professional institutions, rarely involving individuals, and certainly not just for fun.
However, now, especially among younger generations, we're seeing a deep convergence of financial activities with the entertainment and attention economies. This phenomenon, known as "hyper-financialization," means trading, along with other high-risk activities like sports betting, is becoming more accessible and mainstream. As a result, I believe the form and purpose of trading is changing significantly, becoming more and more like entertainment or thrill-seeking.
As for who is best positioned to capitalize on this trend, I believe the answer lies with companies that can earn the trust and affection of the younger generation, and become the places where they're willing to store and access their money . Clearly, Robinhood currently seems to be occupying this position in the US. However, we're also seeing another trend: the migration of all financial activity to blockchain. Therefore, I believe the true winners will be those companies that can not only attract the next generation of users but also effectively adapt to the changing blockchain landscape. Robinhood has been very proactive in this regard, launching products like its own blockchain and tokenized stocks. I'm excited to see their progress in this area.
Whoever can seize the latest trends in on-chain finance, innovate in a "chain-first" manner, and perfectly integrate with the new generation of attention economy will likely become the biggest winner in this field. Of course, there are many different sub-sectors within this field.
Does Coinbase lack a good product team?
Laura:
You mentioned earlier that you're a big fan of Robinhood. If you were Coinbase, what steps would you take to challenge Robinhood in the trading space?
Luca:
Robinhood and Coinbase have very different product positionings. In fact, Coinbase has never been a company focused on product development. For example, their recent attempts to launch an NFT marketplace and other projects have not yielded the desired results. Furthermore, Coinbase's product experience simply cannot compare to Robinhood's. I agree with Brandon that Coinbase should focus on becoming the "JP Morgan" of the crypto world. This positioning makes me even more optimistic about Coinbase's future, and they should pursue this direction with all their might. This is because product development is an organizational capability that requires long-term cultivation and cannot be simply achieved by bringing in an excellent team. Few companies can achieve this; this capability is typically shaped from top to bottom by corporate culture and leadership.
Coinbase's strength lies in trading. They have significant resources and are able to negotiate favorable deals. Furthermore, they excel in brand reputation and market leadership. Therefore, rather than attempting to transform into a product-centric company, Coinbase should focus on its strengths, much like JPMorgan did. I think this is a very wise positioning, and it gives me great confidence in Coinbase's future.
Laura:
So do you think they should abandon the vision that Brian Armstrong (Coinbase CEO) has been talking about, like getting more people on-chain? Do you think they should continue to stick with the centralized model instead of trying to push for decentralization?
Luca:
I believe they can drive innovation through M&A. If Coinbase wants to achieve its strategic goals, it should acquire teams developing products that align with its vision. As a Coinbase user since 2016, I haven't felt their product experience has improved. In contrast, companies like FTX have been able to gain market share by providing a powerful platform for US users, allowing them to conduct more complex transactions. Coinbase should have prevented FTX from gaining market share, but they failed to do so.
Ideally, I think Coinbase's strategic direction is correct, but their team might not be well-suited to it. From my observation, Coinbase doesn't seem like a company focused on product development. Product development is a long-term skill, requiring leaders with a product mindset. I'm not sure Brian Armstrong is that kind of leader. He's more of a strategic decision-maker who can drive trading and business partnerships. But if you look at Robinhood's product, it truly embodies a superior user experience.
For example, when performing certain functions on Coinbase, I often encounter cumbersome notification, verification, and approval processes. However, when performing the same function on Robinhood, since it opened cryptocurrency deposits last year, the entire process has been very smooth, including facial recognition and key verification, making the user experience more user-friendly.
I believe that successful entrepreneurs need to face their own reality and understand what they're good at and what they're not. If you're not a product development-focused person, you'll need to acquire teams that are building the products you need through mergers and acquisitions . Alternatively, you can embrace your position and focus on your strengths. For example, the USDC deal with Coinbase is a great example of their strengths in trading. Coinbase is one of the most reputable and credible institutions in the US crypto industry, and they've been able to leverage this strength to create value for shareholders.
Of course, building a great product doesn't just depend on one person; it also requires a strong team. I consider myself incredibly fortunate to have such a great team. I didn't realize this until years later, looking back. Sometimes you're just lucky to have the right people. But I don't believe one person can drive product development alone, especially when you're building Base (Coinbase's blockchain ecosystem). It's a complex ecosystem with multiple layers, not just one application. While applications are an important part of the ecosystem, it's unrealistic to think that a leader can focus solely on product development every day.
In contrast, Robinhood is clearly a company centered around product development. Their product team not only focuses on user experience but also responds quickly to market needs, which is the key to Robinhood's success in the crypto space.
Does a “universal app” really make sense?
Laura:
There's been a lot of discussion lately about attempts to create a "universal app." Base may be the first attempt at building such a platform, and X claims to be working in that direction as well. I'm curious about your thoughts on these efforts. Who do you think is most likely to succeed in this space? What are the key qualities that will determine a successful player?
Brandon:
I have reservations about the concept of the "app for everything," especially as a competitive strategy. To succeed in this space, you need to be a large company with a large user base and strong distribution capabilities. Companies like X or Facebook, with hundreds of millions or even billions of users, have the resources and influence to achieve this goal. But for companies starting from scratch, trying to be the "app for everything" that covers all areas simultaneously is generally not feasible. Unless you have top-tier resources, this strategy will only get you into trouble. Therefore, I believe that only companies with a large user base and the ability to drive global interaction can succeed in this space.
Laura:
So you don't think Base could be a start in that direction? They've gotten off the ground, but they can't compete with X or other existing social networks.
Brandon:
I don't think Base will become the next "universal app." This presents a significant challenge. As an entrepreneur, when you're a weak competitor, you must choose your battles and clearly understand your strengths and weaknesses. As Luca said, you need to face your reality and focus on your strengths. I don't think trying to compete in all areas simultaneously is feasible. This is why it's so difficult for a true "super app" to emerge in the West. I believe iOS and the App Store are probably the closest thing the West has to a "super app."
In fact, the iPhone's App Store and iOS as a whole are probably the closest thing we have to a "super app." What is the essence of an app? I believe it lies at its core in forging a close connection with the end user. And it's through these user relationships that Apple has gained significant pricing power, as reflected in the App Store and Apple Pay. In the East, the situation is different, with some state-backed companies providing them with an unfair distribution advantage. In the West, I believe only large players like Google or Facebook can succeed in this space.
Luca:
I've mentioned a similar point before when discussing blockchain, and I think it applies equally to the concept of the "one-size-fits-all app." Let's go back to the fundamentals of entrepreneurship: successful entrepreneurs focus on one area. Trying to do everything at once is nearly impossible and doomed to failure. Sure, sometimes you might get lucky and succeed, but this "one-size-fits-all" approach is generally a poor strategy. So, I don't believe in the concept of the "one-size-fits-all app." I prefer to focus on the functional platform within the chain rather than trying to cover all areas. For example, Phantom has excellent product design. I believe these platforms should focus on providing on-chain functionality rather than trying to cover social and hundreds of other functions simultaneously. This quickly becomes complex and unmanageable.
I believe that one should first find the core product-market fit ( PMF ) in a vertical field and then gradually expand the functions, rather than launching a "universal application" from the beginning without a core function that can really attract users.
