The long-awaited Coinbase (COIN 16.84%) NFT (non-fungible token) platform is here, at least for a select group of people who have access to the beta site. Founder and Chief Executive Officer Brian Armstrong has said that NFTs could be a bigger business than crypto trading eventually, and this is a step in that direction.
For now, the platform has a limited number of NFT collections, only includes the Ethereum blockchain, and has limited users. But this could be a major step in creating a bigger vision of being the central point of digital and financial identity in cryptocurrency for millions of users.
What we know about Coinbase NFT
Let's start with a few things we know about Coinbase NFT from the company's blog post.
- NFT transactions will be free for a short time and then "market rate," probably 2% to 2.5%.
- Users can create a profile with curated NFTs.
- There will be a social aspect that allows users to comment on NFTs (think commenting on an Instagram post) and follow creators and collectors.
- Browsing features and trending collections of NFTs.
None of these concepts are new, but Coinbase has put them together in a new platform that, for now, looks a little easier to use and brings in more social networking than OpenSea, the current dominant player in NFTs. But it's what the company is planning long term that could be more interesting.
The future vision for Coinbase NFT
In time, management hopes to build a more fully featured ecosystem, saying:
In the coming weeks and months, we'll add more features that will gradually bring our vision for a web3 social marketplace to life. We're planning to add drops, minting, token-gated communities, and the option to buy NFTs with your Coinbase account or a credit card. We'll also add support for NFTs on multiple chains. And over time, we intend to decentralize more features by moving them from Coinbase tech to decentralized solutions.
The key lines to point out here are token-gated communities, minting, Coinbase account integration, and multichain support. I think Coinbase is building the platform for NFT communities to be started and stay connected.
Add this functionality to the fact that Coinbase is integrating its trading platform and self-custody wallet in more ways and has a "Sign In With Coinbase" platform for developers to use, and this could be the central point of identity in the future.
Coinbase stock looks like a great buy
As positive as I think this news is for Coinbase, the market doesn't seem to agree. Shares are down nearly 60% from their high and are bouncing near an all-time low. The stock even trades for less than 10 times trailing earnings.
Short-term, results may be rocky because of the volatility in crypto trading, but the long-term vision for Coinbase is coming together. The company has a huge crypto trading platform, is moving into NFTs, and is pulling together complex blockchain systems in an easy-to-use platform for social connection and identity. This looks like a winning strategy to me, and with the stock trading at such a cheap earnings multiple, it looks like a great buy for investors.