One of the most common questions asked about Chia is “when Coinbase?”. In the time since mainnet launch it has been difficult for US citizens to buy and sell XCH from a trusted centralized exchange with reasonable liquidity and fees. Coinbase is often seen as the holy grail of accessible exchange listings.
There have been many reasons speculated as to why Chia isn’t listed on Coinbase yet. Let’s explore them and separate out the likely reasons from the unlikely ones.
Likely Reasons
Engineering Complexity for Layer 1s
Chia is a new Layer 1 blockchain with a unique architecture, which can present challenges for exchanges like Coinbase. Integrating a new blockchain requires substantial engineering resources to ensure seamless wallet integration, node uptime, and trusted transaction processing.
This also explains why meme coins get listed so quickly on Coinbase — because they are often tokens on already supported networks such as ERC-20 or Solana tokens.
This isn’t a problem unique to Chia. If we look at the Top 100 Layer 1 blockchains by marketcap, there are many chains ahead of Chia that also have not been listed, including some with much larger and more vocal communities.
Other notable Layer 1 blockchains with higher marketcaps than Chia that have not been listed on Coinbase:
- Kaspa (KAS)
- Arweave (AR)
- Fantom (FTM)
- THORChain (RUNE)
- EOS (EOS)
- IOTA (IOT)
- Dash (DASH)
- Celo (CELO)
- Siacoin (SC)
- Casper (CSPR)
- Ravencoin (RVN)
- Decred (DCR)
While there are two Layer 1 blockchains with lower marketcap than Chia that have been listed (ZETA and ZEN), both had significantly higher marketcaps at the time of their Coinbase listing.
Lack of Hardware Wallet Support
No, I don’t mean Ledger.
Large and highly regulated exchanges will have custom custody solutions in place to manage their cold and hot wallets. Smaller exchanges often forgo best security practices or outsource it to a third party custody provider. Coinbase likely has their own high bar to meet and it almost surely involves hardware modules. Traditional HSMs may not support XCH, forcing Coinbase to develop and thoroughly test and audit new custody solutions. This additional layer of complexity adds time and cost to the integration process.
Low visible user demand for XCH listing
The Chia community may be vocal about getting XCH listed on Coinbase, but they are probably:
- Not large enough in numbers.
- Not vocal enough in the right channels.
A handful of loud voices complaining about lack of exchange listings in Discord or YouTube will not reach the ears of Coinbase’s asset listing team. Their team may conduct social media sentiment analysis but I doubt Chia generates enough buzz to stand out in any particular engagement metrics.
Low XCH Trading Volume
Coinbase prioritizes assets with high trading volumes, as these generate more revenue through trading fees. Unfortunately, XCH’s current trading volume may not justify the integration costs and engineering complexity. To illustrate this point, let’s compare the trading volumes of various Layer 1 tokens.
As we can see from the chart, XCH’s trading volume is significantly lower than many of its Layer 1 counterparts. Note that these numbers also aren’t adjusted to account for wash traded volume.
Unlikely Reasons
Chia Network Refuses to Pay a Listing Fee
Although Chia Network has stated in the past that it will not “pay to play” with exchanges beyond reasonable integration costs, Coinbase has a clear policy regarding not accepting fees for listings:
“As part of our efforts to level the playing field, listing an asset on Coinbase is, and has always been, free. We don’t charge listing or application fees to asset issuers. Unlike many exchanges, we also don’t charge prerequisite asset marketing fees or require issuers to adopt Coinbase’s other services. Some have speculated otherwise, but it is simply not true.”
Surojit Chatterjee, May 31, 2022
Coinbase Blog – Listing assets on Coinbase is free, and always has been
Brian Armstrong vs. Bram Cohen
In a heated Twitter discussion in 2016, Bram had strong words for Coinbase CEO, Brian Armstrong. This is unlikely to be a reason for Chia to not be listed on Coinbase because Brian is intentionally not part of the asset listing review process.
And Coinbase had mentioned Chia as a project under consideration for listing prior to mainnet launch back in 2019, 3 years after the Twitter discussion.
Chia uses an incompatible version of BLS
Chia uses BLS keys compliant with the IRTF CFRG BLS Standard based on a draft of the standard at the time. After committing to this standard, a change was introduced to the draft that would have made Chia’s usage non-compliant. However, this change was later made an optional change so Chia’s implementation continues to be a compliant use of the standard.
Conclusion
As the charts demonstrate, Chia has room to grow in terms of trading volume and market capitalization. Chia simply does not stand out in these measures that any listing exchange would care about because they directly drive revenue.
As Chia continues to grow its ecosystem, increase trading volume, and address technical challenges, the likelihood of a Coinbase listing improves. I wholly expect XCH to be listed on Coinbase one day, and I also expect to be totally caught off guard when it finally does happen.
