A Day In The Life of Coinbase: How We're Building an Empire by Rewarding Users to Learn About Cryptocurrencies

Coinbase has found a way to convert millions of prospective users into loyal customers through its Earn feature that rewards users to learn about cryptocurrencies and blockchains.

Coinbase is one of the leading crypto exchanges on the market today. The company recently created a stunning Super Bowl ad that generated an incredible amount of buzz and brought 20 million hits to its landing within 60-seconds of its ad running. The minute-long spot will surely bring home some advertising awards throughout the year to Coinbase.

The exchange is one of the most widely known crypto exchanges for its unique ability to buy, sell, and manage hundreds of listed cryptocurrencies with low fees. Coinbase also features pay, which allows you to send crypto to its massive 73 million userbase and other crypto wallets; wallet, which allows the user to store crypto in their personal wallet and explore decentralized finance (DeFi), buy and sell NFTs, and more; card, which allows you to earn 4% back in crypto rewards with Coinbase’s Visa debit card; and institutional which is an exchange for “sophisticated investors and institutions that want invest in digital assets.”

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Coinbase’s functionality and programs are massive and growing, but where I really want to focus, and where I think a great deal of its success came from, is one of Coinbase’s oldest and most successful features: Coinbase Earn.

Coinbase Earn allows users to learn about different cryptocurrencies through in-app content and quizzes that reward them for completing the instruction. Upon completing, the user will receive around $3 in the cryptocurrency token that they just learned about. This token can be held, sold or traded for another cryptocurrency immediately.

The process is simple, easy, educational, and rewarding. On the homepage of Coinbase, the user can scroll just below their crypto watchlist to see a section of content titled “Learn and earn.” They can click this section to see the different tokens they can learn about, as well as how much money (in USD) they can earn: rewards have ranged between $3-$10 in my experience. When you start a lesson, the app will open a short video or graphic that explains background information that takes less than 30-seconds to view. You’ll then see a multiple-choice question that can be answered incorrectly as many times as it takes for you to get the answer correct. Upon correctly answering the question, the user will receive a portion of the reward. They will then repeat this process a few more times per lesson, earning rewards as they go.

Currently, new users will be able to complete lessons for the following tokens: FET ($3 earned), AMP ($3 earned), and XLM ($10 earned). While only 16 dollars’ worth of lessons is currently available, I have received 39 dollars in Earn rewards over the last year for less than 30 minutes of mindless watching. The content is also incredibly digestible and easy to follow–making it the perfect introduction to various aspects of cryptocurrencies and blockchains.

Coinbase Earn is an interesting feature to me because it serves as an educational investment for the company–marketing the platform to new users and then turning them into loyal customers:

Benefits to the users:

Make money

New traders can get a head start in the crypto world with a few extra bucks with which they can start trading. One of the biggest barriers to investing to the lack of funds to “play with” when a new trader is learning. Coinbase Earn gives users the ability to get a brief introduction to cryptocurrency and then walk away with a few dollars with which they can practice investing. One thing to note that isn’t really mentioned elsewhere on the internet: users who jump on new Earn offers early, with coins that are listed on Coinbase for the first time, will be rewarded by a phenomenon that occurs in which the price jumps when made available to Coinbase’s large userbase. This has only happened to me twice, but after completing an Earn lesson, the price of the token skyrocketed and doubled my earnings.

Learn about crypto

Another large barrier to investing is the large knowledge gap that intimidates those new to trading. Coinbase feels that learning and earning go hand in hand because the best way to acquire knowledge about something is to engage with a topic as you learn. Users are given a very brief introduction to a token and then are given that token to engage with and continue learning about if they so choose.

Get comfortable trading

Another barrier to investing is the amount of effort it takes to get set up and comfortable on an exchange. Coinbase Earn does not make this process easier, but it encourages users to follow through with setting up an account because of the reward that is waiting for them after their efforts. It also gives the user rewards that can be lost in a trade no harm, no foul.

Benefits to the Coinbase:

Cheap investment to gain users

Coinbase Earn is a promotional tool in and of itself. What better way to gain users than to bribe them with free money? While I can’t find who is actually funding the feature, whether it is Coinbase itself or the creators of the coins that are listed to learn about, the return on investment is high. Whether the user stays on the platform forever, or just uses it once, a few bucks are not bad to convert an audience straight into a customer.

Builds brand loyalty

What better way to turn a user into a loyal customer than to give them free money and knowledge in return for you using its app. In the eyes of the user, it’s a no-brainer. Once you get the user signed up and using your platform with the money you gave them, if their trading experience is great, they will stay.

Easy marketing position

In my Branding of Me class at UNC, we watched a Ted Talk called “How great leaders inspire action” by Simon Sinek. My biggest takeaway from the video was that the “why” of your company sells. If every company sells the same exact great product, the consumer is going to choose its product based on the why. Why are you selling this product? Why do you do what you do? Why do you care? Coinbase can market itself as the trustworthy place for the “future of money” because they are teaching and building the next generation of traders. They, obviously, can also market themselves as an educational and informational app, as well.

Increase revenue

Other than the obvious example here, that bringing more users to your app will increase revenue, there are monetary benefits that Coinbase gains from this feature. One that stands out is that the trading fees charged by Coinbase will likely make them more money than they invested in each user through the Earn feature. For example, I have not deposited any money into Coinbase, but hold a balance of a couple hundred dollars from making good investments with the money I earned through the feature. The kicker here–I’ve executed a ton of trades to get there and have probably spent over $100 in trading fees. Coinbase has at least made its investment back on me.

Coinbase has strategically placed a crypto reward-earning feature natively into its app that helps create loyal, active users who are rewarded for learning about cryptocurrency and enables them to trade and become brand advocates for the platform.

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