Coinbase

Liquid AI

Coinbase

Coinbase makes money from transaction fees. Every time someone buys or sells crypto on the platform, Coinbase takes a cut — typically around 1.5% for regular users, lower for high-volume traders on its advanced trading tier.

For a company that processes billions in daily volume, that adds up fast. In the 2021 bull run, Coinbase generated $7.8 billion in revenue.

Beyond trading fees, Coinbase earns revenue from staking (users earn yield on their crypto, Coinbase takes a commission), USDC interest (Coinbase co-created the USDC stablecoin with Circle and earns interest on the reserves), custodial services for institutions, and its cloud platform for developers building on-chain apps.

Liquid AI

Liquid AI builds foundation models, the big general-purpose brains that power chatbots and other AI tools. The difference is efficiency.

Their models, called Liquid Foundation Models, are designed to do more with far less memory and computing power. Companies pay to use them, either through a cloud API or by running the models on their own machines.

That second option matters. A bank or a hospital often cannot send private data to someone else's server.

Liquid AI lets them keep the model in-house. The pitch to a customer is basically this.

You get strong AI without renting a mountain of expensive chips.

Coinbase

Brian Armstrong was working as a software engineer at Airbnb in 2010 when he read Satoshi Nakamoto's Bitcoin white paper. He became obsessed.

At the time, buying Bitcoin meant navigating sketchy exchanges, wiring money to anonymous accounts, and hoping your coins didn't get stolen. Armstrong thought: this is never going mainstream unless someone makes it dead simple.

In 2012, Armstrong got into Y Combinator and co-founded Coinbase with Fred Ehrsam, a former Goldman Sachs trader. Their pitch was straightforward — be the easiest, safest, most regulated way to buy and sell Bitcoin.

While other crypto exchanges were operating in legal gray areas, Coinbase went out of its way to get money transmitter licenses in every US state. It was slow and expensive, but it meant Coinbase was the one exchange your bank wouldn't block.

The first version was bare-bones. You linked your bank account, bought Bitcoin, and Coinbase held it for you.

That custody model — Coinbase holding your crypto — was controversial with crypto purists who preached "not your keys, not your coins." But for normal people who didn't want to manage private keys, it was exactly what they needed.

Liquid AI

Liquid AI is a spinout from MIT's Computer Science and Artificial Intelligence Laboratory, better known as CSAIL. The core science came from Ramin Hasani, who spent his PhD studying the nervous system of a tiny worm called C.

elegans. That worm has just 302 neurons and still manages to move, hunt, and react to its world.

Hasani and his collaborators asked a simple question. What if you built an AI that worked more like those neurons and less like a giant static network?

The answer was the liquid neural network, a model whose internal wiring keeps adjusting even after training is done. The team incorporated the company in 2023.

Daniela Rus, who runs CSAIL and is one of the most respected robotics researchers alive, came on as a co-founder. So did Mathias Lechner and Alexander Amini, both longtime research partners of Hasani.

Coinbase

Coinbase grew with the Bitcoin price cycle. Every bull run brought a wave of new users who heard about crypto from the news or their friends and Googled "how to buy Bitcoin." Coinbase was almost always the first result.

The company spent heavily on brand advertising including a legendary Super Bowl ad in 2022 that was just a bouncing QR code — it crashed the app from the traffic surge.

The regulatory strategy was the long game. While Binance and FTX grew faster by ignoring regulations, Coinbase spent years and millions getting licensed.

When the regulatory crackdown came, Coinbase was the last exchange standing. Being "the regulated one" went from a competitive disadvantage to the only thing that mattered.

The direct listing in April 2021 was a landmark moment. Coinbase went public via direct listing at a $85 billion valuation — the largest direct listing in history at the time.

It legitimized crypto as an asset class in a way that no Bitcoin price chart ever could.

Liquid AI

The growth angle is size, or the lack of it. Most frontier models are so heavy they only run in data centers.

Liquid AI aims for models light enough to run on a phone, a car, or a factory robot. That opens doors the giants cannot easily reach.

The AMD partnership pushes the same idea. AMD makes chips, and it wants efficient models that show off its hardware.

So AMD led the Series A and became both an investor and a distribution partner. Liquid AI also releases open models to researchers, which builds a following before the sales team ever makes a call.

Coinbase

The crypto winter of 2022 nearly broke the company. After the collapse of FTX, Luna, and Three Arrows Capital, crypto trading volume fell off a cliff.

Coinbase's revenue dropped from $7.8 billion in 2021 to $3.1 billion in 2022. The stock went from $342 to $35, a 90% decline.

Armstrong laid off 18% of the company in June 2022 and another 20% in January 2023.

The SEC lawsuit was existential. In June 2023, the SEC sued Coinbase alleging that it operated as an unregistered securities exchange.

The lawsuit claimed that at least 13 crypto assets traded on Coinbase were securities. If the SEC won, it could have fundamentally broken Coinbase's business model.

The SEC dropped the case entirely in February 2025, dismissing it with no penalty and no admission that any token was a security.

Revenue concentration is a structural risk. Coinbase's revenue swings wildly with crypto prices and trading volume.

In bull markets, the company prints money. In bear markets, revenue evaporates.

This makes it nearly impossible to plan long-term or maintain consistent growth — Wall Street hates unpredictability.

Liquid AI

The honest problem is Goliath. OpenAI, Google, Anthropic, and Meta have raised tens of billions of dollars between them.

Liquid AI has raised under $300 million. The transformer architecture those giants use is battle-tested and improving fast.

Liquid AI has to prove its different approach not only works but keeps working as models get bigger. Betting against the most successful design in AI history is bold.

It is also the kind of bet that ends in either a great acquisition or a quiet shutdown, with not much room in between.

Coinbase

Coinbase is the consumer trading platform — buy, sell, and hold 250+ cryptocurrencies. Coinbase Advanced Trade (formerly Coinbase Pro) is the lower-fee, more sophisticated trading interface.

Coinbase Wallet is a self-custody wallet where users control their own keys. Coinbase Prime is the institutional platform for hedge funds, family offices, and corporations.

Base is Coinbase's own Layer 2 blockchain built on Ethereum, designed for cheap, fast transactions. USDC is the stablecoin Coinbase co-created with Circle — pegged 1:1 to the US dollar with over $30 billion in circulation.

Coinbase Commerce lets businesses accept crypto payments.

Liquid AI

The main products are the Liquid Foundation Models, a family that ships in several sizes so a customer can pick the smallest one that does the job. The second generation, LFM2, arrived in 2025, including LFM2-VL vision-language models built for phones, laptops, wearables and embedded chips.

The company has leaned hard into on-device AI rather than the cloud. The focus is always the same.

Match the quality of a much larger model while using a fraction of the memory and power.

Coinbase

Y Combinator, Andreessen Horowitz, Union Square Ventures, Tiger Global, Ribbit Capital, IVP

Liquid AI

It started with a $37.5 million two-stage seed in December 2023 at a $303 million valuation, from OSS Capital, PagsGroup, Automattic (the company behind WordPress), Samsung Next and others. Angels included GitHub co-founder Tom Preston-Werner, Shopify's Tobi Lütke and Red Hat co-founder Bob Young.

Then AMD Ventures led the $250 million Series A in December 2024, which is unusual because AMD is a chipmaker, not a typical venture fund. That backing gave Liquid AI both money and a hardware ally.

When a major chip company writes the lead check on an efficiency-focused model maker, it signals a bet that the future of AI is not just bigger, it is leaner.