By
Chimamanda U. Martha
April 25th, 2024
A world-famous cryptocurrency startup Coinbase has acquired a digital identity startup Distributed Systems and to develop digital identity solutions.
The blockchain giant Coinbase has ambitious plans to address the issues of identity for the crypto industry to provide its customers with an opportunity to execute control over their online identities and feel safe while conducting their activities online. Coinbase is planning to develop an identity platform for decentralized app developers which will significantly improve the way users sign up and connect their crypto wallets.
With a view to fulfill this task, Coinbase has made a very important acquisition. As the company has announced in its official blog post, it has acquired Distributed Systems – the startup launched in 2015, which was developing the Clear Protocol, an identity standard for decentralized applications.
The team of Distributed Systems that consists of five specialists and its technology now will become a part of Coinbase. Some team members will join Coinbase’s Toshi decentralized mobile browser team while the co-founders of the startup will work directly on the development of the Login product at Coinbase.
Distributed Systems managed to raise $1.7 million last year in a financing round that was led by Floodgate. There were some talks about the startup’s plans to hold a $4 million to $8 million round this summer. Nevertheless, its CEO Nikhil Srinivasan took another decision.
With a view to find a partner with KYC data, Distributed Systems entered into negotiations with Coinbase Ventures. According to Srinivasan, Coinbase started speaking about acquisition as soon as they understood the potential of Distributed Systems.
It is said that Distributed Systems held acquisition talks with a number of the tech industry giants including Facebook, Robinhood, and Binance. But the proposal of Coinbase seemed to be the most attractive for the startup. The financial details of the deal are not revealed.
As we have already mentioned, Coinbase wants to create the “Login with Coinbase” or a similar product that will represent a software development kit which would be easily integrated with other applications. Such a product will provide developers with a possibility to improve and facilitate their singups procedures. The process of creating accounts and connecting crypto wallets for making payments will become much faster and user-oriented as well.
The Coinbase team is really excited about their new deal and is looking forward to starting work.
“Distributed Systems is an incredibly thoughtful team that has been working on decentralized identity solutions. With their work on the Clear Protocol and GraphQL, Nikhil, Alex, and the rest of the team have gotten their hands dirty in the technical detail of using blockchains to improve how identities mesh with digital products. We believe decentralized identity systems represent a transformative shift in our relationship with technology, and we can’t wait to work on these opportunities together at Coinbase,” the official blog post reads.