Coinbase CEO Brian Armstrong has publicly drawn a line under the era of content coins on the Base layer-2 network. In a recent statement, he directly acknowledged that the experiment failed and that the team radically changed its development direction at the beginning of the year. This is a rare case where the leader of the largest US crypto exchange openly discusses strategic miscalculations.
Base, launched by Coinbase in 2023 as an Ethereum-based L2 solution, spent most of last year trying to ride the on-chain content trend. The platform actively promoted applications that allowed turning social media posts into tokens and trading them. Although this attracted a wave of new users, for many participants such activities resulted in serious financial losses. Analysts highlight four key areas that led to disappointment.
Four Failed Bets of Base
First — the Zora platform, where publications were tokenized. The surge in activity was short-lived, and the project never formed a sustainable audience. Second — Creator coins, tokens tied to specific content creators. The idea of financing creators through indices failed: when prices collapsed, retail investors were left in the red. Third — Team-backed tokens, coins associated with former Coinbase CTO Balaji Srinivasan and Base creator Jesse Pollak. The initial hype gave way to a sharp crash, and the same people who promoted these assets systematically lost money. Fourth — the Base social application, which was positioned as a universal hub but was packed with features absolutely unnecessary for the community. Later, Armstrong reformatted the product into a trading application with self-custodial storage.
Armstrong directly responded to the criticism, stating: "I agree with the opinion on content coins. The experiment did not justify itself; we changed course at the beginning of the year. We were wrong, time to move on."
The abandonment of the previous concept coincided with a sharp decline in network activity. The total value locked (TVL) on Base fell from approximately $5.3 billion in January to $3.9 billion by mid-February. The $1.4 billion decline occurred precisely during the period of disagreements over the new strategy. At the time of publication, the network's TVL had partially recovered to $4.37 billion.
Currently, the team's main resources are directed towards developing trading. Payments and the artificial intelligence sector are taking a back seat. Armstrong denies that Base is trying to carve out a niche for AI agents. However, this focus did not protect Coinbase's core business from a downturn: the exchange's revenue fell by 31% in the last quarter to $1.41 billion, due to a 37% decline in spot trading.
My expert opinion: Admitting mistakes is a strong step, but regaining the trust of users affected by these experiments will require time and concrete results. Whether the new bet on trading will be successful — only the next cycle will tell. Armstrong has already offered to personally listen to all dissatisfied parties, hinting at an attempt to maintain community loyalty, but the market will judge actions, not words.