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Coinbase Cloud, Alchemy, and MiddleWare all have their strengths

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Amazon "AWS" again downtime, a detailed count of Crypto field native cloud servers?

Narrative Tracking - 12.7 Crypto AWS

Original source: One-sided Crypto

Today we're talking about Coinbase Cloud and Alchemy, both of which are part of the Web3.0 infrastructure track. Today's content is probably not so much a discussion, but more of an overview of what the two companies want to do and what the vision is. The vision of the company at the cutting edge may be the future we see.

Conclusion first, Coinbase Cloud and Alchemy both want to be AWS for Crypto.

Coinbase Cloud

Brian Armstrong, founder of Coinbase, photographed for Forbes by Jamel Toppin in January 2020

The emergence of Coinbase Cloud may be largely due to pressure from investors after it went public. As the largest Crypto exchange in the United States, Coinbase, like all exchanges, derives almost all of its revenue from transaction fees. Of course, non-COMPLIANT exchanges also have fees to register in addition to fees.

When the price of bitcoin was relatively low, a second-tier exchange could charge 10-20 bitcoins two or three years ago, which was about $100,000 to $200,000 at that time. It is rumored that the fees of first-tier exchanges can reach more than $3 million.

Of course, these exchanges will announce that they do not charge any fees.

At the time of Coinbase's initial public offering, 97% of the company's profits at its peak came from transaction fees. As a result, when the price of bitcoin falls and the market slumps, trading volumes shrink and so does the exchange's fee income. The results have also been reflected in Coinbase's financial results this year, with a drop in trading volumes in the third quarter contributing to a 44% drop in revenue (according to Forbes).

To put that in perspective, Coinbase's stock price is closely related to bitcoin's price.

Google Finance (it's not even as good as Bitcoin, let alone Ethereum)

To address the issue, Coinbase has been ramping up its other businesses since the second quarter, with revenue from subscriptions and other services rising in its financial results, especially in the third quarter, when fee revenue fell.

In January, Coinbase acquired a company called Bison Trails. The company's business consists of four parts, which are:

- Node service is to provide services to people who have a lot of coins and help them make nodes to ensure the normal operation and maintenance of nodes

- Protocol layer service is to provide services for people who want to interact with the public chain. Because the company itself is already connected to many chains, it can encapsulate a lot of data and the interaction with the chain for developers to use

- Managed nodes, that is, Bison Trails does their own nodes, and other users with coins entrust their coins to them

- Data and API services, which need no further explanation

According to the introduction of the company, they currently support 20 or 30 public chains. Their most important job is to ensure the smooth operation of nodes, which requires them to often follow up the public chain, and require to go very close to the public chain, to ensure that the first time to know the development progress of the public chain, upgrade, etc.. The team also detailed their part of the work.

After Coinbase acquired Bison Trails, the two founders grew up to lead Coinbae Cloud, doing the same things but with more Coinbase support. Coinbase will certainly continue to build its own hosted, node services into the Coinbase Cloud over time.

After the acquisition, Bison Trails expanded and the team doubled in size. More docking and better monitoring. What's more, having Coinbase's endorsement would be even more helpful in terms of customer trust. For Coinbase, it is a big game. As the public chain grows, the node service itself will become more specialized, so it may be more appropriate to find a professional team to do it.

On the other hand, it can solve the dependence on transaction fees to a certain extent in terms of revenue. Third, Coinbase previously created its own application list for the NFT program, and over a million people filled it out, so it's likely that Coinbase is planning to create an NFT marketplace. Finally, as I said at the beginning, the bigger story of this story is Crypto cloud itself. Amazon's AWS went from a small product to a major source of revenue for the company. If Crypto/Web3 really reshapes the Internet to some extent in the future, then Crypto's cloud service imagination is no less than AWS.

Alchemy

Alchemy is currently the largest Crypto cloud service provider and was launched in August 2020. Currently, there are three rounds of public financing. The latest round, Series C, was held in October this year, with investors including A16Z, Lightspeed, Redpoing, Pantera and others. The latest round was valued at $3.5 billion, raising $250 million. Previous investors include Yahoo founder Jerry Yang, Stanford University, Coinbase, LinkedIn co-founder Reid Hoffman and others.

Alchemy is more focused on helping Web3 application development than Bison Trails, with less emphasis on node services (though there are some). Products highlighted on its website:

- Supercharged Blockchain API: a node to provide all services to help developers develop applications that support Ethereum, Ploygon, Arbitrum, Optimism, Flow, and more.

Powerful Suite of Developer Tools: Powerful Suite of Developer Tools, a Dashboard

According to & have spent As reported by Techcrunch, Alchemy's current clients include major NFT platforms: OpenSea, Nifty Gateway, SuperRare, CryptoPunks, Dapper Labs, Axie Infinity. There are traditional companies doing blockchain business: Adobe, etc. Also, a lot of DeFi apps use Alchemy's services.

Alchemy is also targeting AWS.

- the PC era

- CPU GPU RAM Windows & Apple Local computer software Word

- Internet era

- Various Internet protocols & NBSP; Cloud services AWS Internet software

- Blockchain era

-layer 1 male chain Alchemy / Coinbase Could Web3 application

At present, Alchemy is running very well. The money from financing has not been moved, and the company has been in a very good profit state. The goal, of course, is to try to drive adoption of Web3.

Although Coinbase Cloud and Alchemy are both infrastructure services, I prefer them to be in the middle tier, Middleware.

Developer - Application - User

Developer - Middleware - App - Middleware - User

In the early stages of development, we saw more direct user contact with apps, and developers directly reaching users through apps. However, with the development of the industry, the number of bottom Layer 1 / Layer 2 carrying the application is increasing, and the application itself is also increasing, which may be a big problem for both users and developers.

Imagine an Internet world without Github and Google. Google, as an entry point, can actually be understood as the middle layer of users and ultimately searched information, the largest middle layer. However, with the continuous development of the industry/ecosystem, the amount of information in the terminal is increasing, which requires more and more intermediate layers.

At the other end of the Crypto spectrum, a wallet is a very typical middle layer, helping users reach applications. It's just that in the early stages, wallets are really just reaching users and not doing much like filtering/recommending/sorting. In addition to the general middle layer such as wallet, there will be a focused middle layer, such as dedicated privacy protection services; A more detailed liquidity management tool; Asset management tools and other middle layer.

Of course these are superficial ideas, but Middleware can be very important in lowering barriers, reaching more users, and attracting more users.