Coinbase Should Have Gone Public Via Ethereum, Says First Employee

Olaf Carlson-Wee, the first hire at cryptocurrency exchange Coinbase, says that shares of Coinbase would be worth more today if the company had chosen a crypto-native way of going public.

"I think that if Coinbase would have gone public on Coinbase,” he said, "[it] would be valued at over double what it is.” Instead, Coinbase went public on April 14 with a direct listing on the Nasdaq.

Carlson-Wee, now founder and CEO of crypto venture capital firm Polychain Capital, elaborated during the conversation with Decrypt executive editor Jeff Roberts at this year’s Ethereal Virtual Summit powered by Decrypt.

By “going public on Coinbase,” Carlson-Wee had in mind a USDC-style model, through which the company's shares would be represented as ERC-20 tokens, allowing for trading in “the wild and wonderful world” of decentralized finance (DeFi).

But Coinbase’s way of going public was hardly mainstream: it chose a direct listing on the Nasdaq instead of the more common route of an initial public offering (IPO). Direct listings are less cumbersome than IPOs as they require less paperwork, and they’re also cheaper.

Coinbase did not create new shares, as would be the case in an IPO, but instead offered up 115 million existing shares.

At launch, the exchange was rumored to be worth $100 billion, with shares expected to trade for $375 each, but some analysts found that to be off the mark.

Coinbase debuted on the Nasdaq under the ticker COIN at $381 per share, then briefly peaked at $424 before plummeting to $310. It ended its first day at $328 per share—still 31% higher than its reference price.

Since then, shares have continuously dropped in value. Coinbase stock closed at $263 on Friday.