Author: Thejaswini M A
Compiled by: Saoirse, Foresight News
In Goodfellas, Ray Liotta has a line: 'Fuck you, pay me.' This line shreds the romanticized filter of mafia honor found in works like The Godfather, starkly revealing the cold, parasitic, and purely profit-driven essence of organized crime. Following a similar logic, let's talk about big tech companies.
You control value by controlling profits. To achieve this, you don't even need to build a public blockchain protocol or a project. It's a profit grab with no rules. But we can't blame Coinbase, Stripe, or Kraken for making such choices.
From the most fundamental business logic, their maneuvers are akin to a shrewd real estate play: be the first to secure the traffic distribution channels. Now holding the power of these channels, they look down and ask: 'Who exactly holds the bargaining power?'
Coinbase built its own blockchain; Stripe spent $1.1 billion acquiring infrastructure it could have rented; Kraken spent $1.5 billion acquiring a derivatives trading platform; Apple built the App Store. The logic of this playbook is: let others develop the market and bear the early risks, then acquire the underlying infrastructure when the profit potential in the sector becomes sufficiently attractive. The core question this article explores: Where will the industry head when traffic distribution channels are no longer the core value?
Coinbase has 110 million verified users. For years, its lending products for users were built on top of the open-source protocol Morpho, with all protocol fees going to Morpho. Later, Coinbase launched its own L2 blockchain, Base. Morpho chose to deploy on Base because Coinbase's massive user base could bring transaction volume. Now, the sequencer fee generated by every transaction on Base flows entirely into Coinbase's pockets, not Morpho's.
Base generated $76 million in net sequencer fee revenue in 2024 and $74 million in 2025. Until February 2026, per the licensing agreement, Coinbase had to share a portion of the revenue with Optimism. But eventually, Coinbase severed the partnership, switched to a self-developed underlying architecture, and now keeps the entire $64 million revenue. Meanwhile, Morpho remains rooted on Base, developing robustly with a Total Value Locked (TVL) of $2.5 billion. However, every transaction processed by Morpho now has to share profits with Coinbase.
Base Monthly Sequencer Fee Revenue, source: DeFiLlama
Coinbase launched a $300 million Bitcoin-collateralized lending product, relying on Morpho's underlying architecture. Its wrapped Bitcoin, cbBTC, is the largest collateral asset within Morpho, accounting for 38% of the protocol's total TVL. This creates a mutually restraining dynamic: Morpho holds the core underlying capability for Coinbase's credit product, while Coinbase can extract a revenue share from all of Morpho's business, making it difficult for either to easily sever the partnership.
Look at Stripe's case: In early 2025, it spent $1.1 billion to acquire Bridge. Before this, Stripe's stablecoin business relied on Circle's infrastructure. Circle held the stablecoin issuance rights and earned the floating interest generated by the reserve collateral assets. At that time, all revenue from Stripe's trillion-level stablecoin transactions flowed to Circle. Acquiring Bridge completely reversed this situation. Bridge issues its own stablecoin, USDB, collateralized by a BlackRock money market fund. After switching to USDB, the massive interest income from these reserves stays entirely within the Stripe ecosystem. With annual payment processing volume of $1.4 trillion, Stripe was losing hundreds of millions in profit annually by long-term renting its competitor's profit-generating infrastructure.
Patrick Collison once called stablecoins 'the room-temperature superconductors of finance.' Spending $1.1 billion to own this underlying tool outright is far more economical than continuously paying tolls to a competitor.
A pure spot exchange has a natural growth ceiling, with users trading only hundreds of tokens. But Kraken wanted to attract institutional investors and professional retail traders, groups that primarily engage in trading via futures and clearing derivatives. Operating a derivatives business requires registration with the CFTC, NFA membership, and broker-dealer licenses—a compliance system that takes years to build. Even if built from scratch, regulators could reject the application for various uncontrollable reasons.
This is why Kraken set its sights on NinjaTrader. The $1.5 billion acquisition in January 2025 brought not just 1.7 million funded trading accounts, but more crucially, the full suite of broker-dealer licenses that Kraken would have found difficult to quickly develop and obtain on its own.
By acquiring ready-made compliant qualifications, Kraken completely shed its dependence on external partners. It now wholly owns the entire technology stack and licenses, needing neither to rely on others nor spend years waiting for regulatory approval.
Some might say: Large enterprises swallowing small protocols, isn't that just business as usual? What's new here?
Morpho's total TVL is $6.4 billion, with $3.308 billion deployed on Ethereum and $2.488 billion on Base. If Coinbase decided to delist Morpho and switch to a self-developed lending protocol, Morpho would immediately lose 39% of its TVL. However, it would still retain 52% on Ethereum, while continuously expanding to multiple chains like Hyperliquid L1, Monad, and Arbitrum, allowing its overall business to continue operating stably.
Morpho TVL Distribution Across Chains, source: DeFiLlama
The case of Aerodrome on the Base blockchain vividly demonstrates the impact when a chain operator promotes its own competitor. Aerodrome is Base's native decentralized exchange, optimized for Base's architecture. Coinbase Ventures holds approximately $20 million worth of AERO tokens, its largest liquidity token investment. Meanwhile, the project guides liquidity towards Coinbase's products, including the cbBTC pool, through AERO token lock-up voting. Aerodrome handles about 51% of Base's DEX volume, peaking at 77% in September 2024. Uniswap, deployed across 44 chains, is Base's second-largest DEX, holding 30% volume. Even after losing its leading position on a single chain, Uniswap hasn't perished: in 2025 it processed $212 billion in volume on Base, with estimated cross-chain monthly volume around $73 billion.
Base DEX Volume Share, source: DeFiLlama
This case confirms: Multi-chain deployment is a protocol's natural moat. A project deployed on a single chain is entirely at the mercy of the chain operator—they can always promote a competitor to squeeze your survival space. Conversely, a multi-chain protocol can continue normal operations in other sectors even after losing a particular chain's market. After witnessing Uniswap's traffic being diverted by Aerodrome on Base, Morpho rapidly expanded its multi-chain deployment. Large traffic platforms can vertically integrate into the underlying layer, while open-source protocols can horizontally expand across multiple chains to diversify risk.
If you rely on underlying infrastructure you don't own, you don't truly control your business. The party controlling the underlying layer holds overwhelming bargaining power over you, can define your product experience, and ultimately influence your operational stability. For enterprises of this scale, this dependency relationship translates into tangible profit losses every single day. This business logic isn't unique to crypto: Amazon built its moat relying on AWS; Apple, constrained by Intel's chip roadmap for years, spent many years developing custom chips to break free.
Everyone can check in real-time how much revenue Coinbase earns from Base sequencer fees, and clearly see Morpho's TVL across various chains. This value extraction process is fully transparent—something internal infrastructure profits at companies like Amazon, in the traditional internet space, cannot achieve.
There is a potential direction for the industry: the future market could be entirely controlled by giants like Coinbase, Stripe, Kraken, and a few banks. They control the entire industry chain from underlying protocols to payment cards, with open-source protocols only used to fill niche gaps the giants haven't yet covered. This is a fully plausible development path for fintech. Open-source technology would no longer be a free and vast fertile ground for innovation, but merely become patches of adhesive tape for the tiny crevices giant corporations haven't yet figured out how to monetize. Like a quip: 'Look at this high-quality little open-source protocol. Let's just build a commercial system on top of it to harvest the traffic.'
However, I lean towards an optimistic assessment: Considering the current wave of acquisitions, the probability of such a complete monopoly isn't as high as it seems. Underlying protocols are difficult to be monopolized by giants in the same way traffic channels can be. Morpho can deploy on a new chain in just weeks; replacing a battle-tested lending protocol deeply embedded in institutional operations carries an extremely high cost, not easily perceivable by outsiders. Coinbase's $300 million Bitcoin lending product still relies on Morpho because replicating Morpho's security system from scratch would take years and introduce security risks Coinbase is unwilling to bear.
Protocols that can survive this wave of giant consolidation all meet one core condition: they completed full multi-chain deployment before the traffic giants built their own ecosystems, deeply embedding themselves into the backend systems of major enterprises, making the economic cost of replacing them prohibitively high. Even Robinhood, a traffic giant with a massive user base, chose to integrate Lighter, a third-party zk-proof perpetuals exchange, as its trading backend. Robinhood Ventures participated in Lighter's $68 million funding round, and founder Vlad Tenev maintains close communication with the project.
If only traffic channels could build moats, Robinhood could have built its own underlying tech like Coinbase did. But it didn't: achieving a system that combines CEX-like trading speed with verifiable zk-proof matching logic is an extremely difficult, niche technical problem; the Lighter team spent over a year cracking it. After calculation, Robinhood concluded that purchasing the right to use mature technology is far more economical than building from scratch.
Currently, Morpho occupies this advantageous position of mutual restraint, while Uniswap was the pioneer of this path. The speed of institutional expansion and the speed of open-source protocol horizontal multi-chain expansion are in a game of chess; the final outcome will determine the direction of the industry landscape.
The underlying businesses of giants like Stripe and Coinbase still rely on open-source technology at this stage. In the short term, open-source protocols can still stand firm. We'll re-examine the industry landscape in two years.
