https://blog.coinbase.com/adding-erc20-support-to-coinbase-fe9cba6782b
March 26, 2018 We’re excited to announce our intention to support the Ethereum ERC20 technical standard for Coinbase in the coming months.
This leaves many to speculate which ERC-20 token will be listed first.
https://coinsavage.com/content/2018/03/which-erc20-tokens-will-coinbase-list/
We then filtered those 46 tokens by 30 day trading volume over $1 billion, in order to gauge “Asset Velocity”. The nine tokens below remained:
- EOS
- TRON
- VeChain
- Binance Coin
- ICON
- OmiseGo
- DigixDAO
- Status
- Storm
Now, I've never heard of Storm or Status, but as you can see, even three months later, this article is extremely outdated. EOS and Tron already have mainnets. I believe VeChain has its own mainnet as well. ICON and Binance are likely making a migration. Why would Coinbase list an ERC-20 token that has no plans to stay an ERC-20 token?
If Coinbase had to pick just one ERC20 token at this point in time, we believe it would be OmiseGO (OMG).
Hm, okay... so the first coin Coinbase will list is a competing exchange? That tracks... lol.
If that's the logic I have to compete with, I'd also like to make some outrageous claims. The first three ERC-20 tokens Coinbase will list are Dai, Maker, and Augur.
Most ERC-20 tokens are in development and don't even have a working beta. Maker has been working for a while now and Augur just came online.
There is also a regulation compliance issue because if ERC-20 tokens are deemed securities in a traditional sense then they literally can't come into compliance. The law was built for more traditional investments. Coinbase will not list tokens that held an ICO without the Securities Exchange Commission clarifying the regulation requirements. Lucky for Maker, they held no ICO; all the initial investments were acquired privately. This puts Maker and Dai in a good spot to be listed on Coinbase.
Maker and Dai
These are two coins I can't seem to shut up about. They are the only reason why I actually want to hold Ethereum. In short, the MakerDAO platform rewards Ether holders by allowing them to take out loans with their Ether as collateral. These loans are granted in Dai, a stable-coin pegged to the dollar.
If Coinbase is worried about liquidity (they are) then Dai is the perfect coin to list. Dai is a stable-coin with infinite liquidity. Listing this coin first would generate hype for Maker, the governance coin of Dai. Maker is already #35 on the market cap. Pushing it up further would give it the liquidity needed to be directly listed on Coinbase.
Coinbase loves Bitcoin and Ethereum
Everything Coinbase does seems to revolve around supporting Bitcoin and Ethereum. They added Litecoin, a Bitcoin fork. They added Bitcoin Cash, another Bitcoin fork. And now, they are adding Ethereum Classic, the fork that occurred because of the DAO hack. It's clear that they aim to support Bitcoin and Ethereum and this is yet another reason why Dai coin will be listed on Coinbase.
Demand for Dai as a stable-coin drives the price up, while demand for Dai to engage in margin trading drives the price down. If Coinbase lists the Dai, it will only be used there from a stable-coin perspective. The only way to create Dai is to use the smart contracts at https://dai.makerdao.com/ to lock up Ethereum in a CDP and draw Dai from the CDP. Therefore, everyone on Coinbase purchasing Dai would be doing so for its properties as a stable coin.
The MakerDAO platform often over collaterallizes their loans by 300%. This means that for every Dai that gets bought on Coinbase $3 worth of Ether would get locked into smart contract Collateralized Debt Positions (CDP). This is a big reason why I think the Dai could get listed; because Coinbase seems to heavily support the Bitcoin and Ethereum platforms. Not only would listing Dai pump the value of Maker and get it ready to be listed, it would also pump the value of Ethereum.
But, Coinbase already has a stable asset USD
Listing Dai would probably be the most boring and redundant move Coinbase could decide to play. Why buy a stable coin when you can just turn your assets back into USD to protect them? However, I would argue that Coinbase can't transfer USD anywhere but your bank account. You can't move USD into an Ethereum wallet or to any other exchange without first turning it into crypto. Dai would provide this functionality. It would also provide the functionality of transferring these proxy-dollars to vendors as fast as the Ethereum network can confirm them. Considering Coinbase's generous stance on zero fee transfers they could easily turn out to be the front-runners in mainstream adoption.
Stable-coins are key to vendor adoption
Businesses will not accept the high volatility of crypto because it could bankrupt them. The obvious solution is stable-coins. Dai is the only decentralized stable coin that I know of. It's backed by Ethereum and doesn't require any money to be stored in a bank. This makes it superior to coins like Tether and TrueUSD.
Coinbase knows that the key to mass adoption of crypto lies in stable coins. Listing the Dai would encourage other exchanges to list it and it would encourage small businesses to start accepting it as payment. Coinbase would make it extremely easy to turn Dai directly into dollars. Also, a Dai/USD trading pair would decrease the little volatility that Dai does have by a huge factor (currently about +/- 2%).
What if?
Currently, the process of creating Dai is a little complicated with many steps. What if Coinbase reduced those steps to a single click with no gas fees? They could accomplish this by doing all the heavy lifting themselves and pass on simplicity to their customers.
By listing Dai, Coinbase could allow users holding Ethereum on Coinbase to lock up their Ethereum and pull out a Dai loan with a single click (and vice versa). Compared to turning ETH into WETH, turning WETH into PETH, locking PETH into a CDP and drawing Dai from the CDP this seems like a very convenient option for Coinbase users. This is especially true when you consider the time/money it takes to get those four transactions confirmed on Ethereum's overburdened platform.
And look at that! All of a sudden Coinbase's boring stable coin listing would also turn into an avenue to take out loans and engage in margin trading, allowing users to double down on their risk taking. Exciting!
Not only that, Coinbase could undercut the 13% margin call trade of the MakerDAO. Coinbase already has a super efficient way of liquidating Ether quickly if they need to eliminate collateralized debt. For example, assume Coinbase takes $3,000,000 worth of Ether and locks it into a CDP. They draw 1,000,000 Dai out of it. This costs them 2 dollars, no biggie. Now Coinbase uses that 1,000,000 Dai as a proxy for their users.
Say I have $2000 worth of Ethereum on Coinbase and I want to lock it up for 1000 in Dai. In one click, Coinbase could grant me 1000 Dai from their reserves of 1,000,000. The advantage? Besides no fees and occurring instantly? If the value of Ethereum crashes they can set their own margin call percent and their own penalty fee.
On the MakerDAO platform the margin call is conservatively set to 150% with a 13% liquidation penalty. In the above example, if my $2000 worth of Ethereum fell to $1500 a margin call would occur and my debt would be auctioned off for 13% less than it's worth. Coinbase could use its proxy to pick any percentages it wanted to, as long as they are willing to accept the risk of lowering the percentage. There is so much liquidity on Coinbase I bet they could get away with 110%-120% with a 0-5% fee.
The best part about this whole dream scenario is that Coinbase hardly had to do anything to make it happen. MakerDAO has already done all the heavy lifting. This is the power of a cooperative economy.
Other Predictions
https://www.investinblockchain.com/coinbase-support-erc20-tokens/
Of course, BAT isn’t the only ERC-20 token hoping to get added by Coinbase. Many of the other top Ethereum tokens can make strong cases, including OmiseGo, Augur, and Waltonchain to name just a few.
I'm almost surprised that no one is making a case for Dai. Perhaps I'll hop on Augur and make a long-shot bet on it.
Return from ERC-20 Tokens On Coinbase to edicted's Web3 Blog
