The Breakdown - Coinbase Down Again, HIP-4 vs Polymarket, and Dueling Big Tech Crypto Partnerships | The Breakdown

Episode Date: May 8, 2026

David covers three Friday stories: Coinbase's hours-long outage on the back of an AWS cooling failure, the data on whether prediction markets are actually beating memecoins, and the dueling Solana + Google Cloud / AWS + Coinbase + Stripe agentic commerce announcements. TIMESTAMPS: (00:00) Intro (01:23) Coinbase AWS Outage (07:20) Nexo Ad (07:55) Prediction Markets, Memecoins, and HIP-4 (15:58) Nexo Ad (16:51) Prediction Markets, Memecoins, and HIP-4 (Cont.) (19:15) Agentic Commerce Meta FOLLOW THE SHOW › David — https://x.com/dcanellis › The Breakdown — https://x.com/TheBreakdownBW SPONSORS › NEXO Nexo is the premier digital wealth platform. Receive interest on your crypto, borrow against it without selling, and trade a range of assets. Now available in the U.S with 30 days of exclusive privileges. Get started at http://nexo.com/breakdown Get top market insights and the latest in crypto news. Subscribe to the Blockworks Daily Newsletter: https://blockworks.co/newsletter/ DISCLAIMER As always, remember this podcast is for informational purposes only, and any views expressed by anyone on the show are solely their opinions, not financial advice.

It is Friday, May the 8th. I'm your host David Canellis and this is The Breakdown. I've got a few quick stories for you this morning to get you ready for the Friday, get you ready for the weekend. We are looking at Coinbase is down or at least it was down and now it's slowly coming back online. But I don't want to say I called it the other day when I said there was a snafu headed for Coinbase now that it is relying on non-technical team shipping code. But it looks like it's not exactly Coinbase's fault this time around depending on how you look at it. We're also looking at prediction markets. Polymarket versus Kowshi, who's winning? Is Hyperliquids hit for a threat? We have some insights from

a new Blockworks Research report that was posted on X yesterday. And we're also looking at the agenic commerce meta because there's been a bunch of partnerships. Is it kicking off? Is there an on-chain agent economy? We're going to find out. So without further ado, let's jump to it. This is the breakdown. This episode is brought to you by Nexto. Step into a new era of digital wealth, earn interest on your digital assets, borrow against them without selling and trade all in one platform. Get started at nexus.com slash breakdown. Nothing said on the breakdown is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only and interviews expressed by anyone on the show are opinions, not financial advice.

Host and guests may hold positions in the company's funds or projects discussed. Okay, first, let's check out this Coinbase stuff. So Coinbase appears to be slowly coming back online after it was like a five or six, seven hour outage overnight. it was apparently due to an AWS outage. So something to do with Amazon itself. We have this report here from Reuters that kind of goes into it. And it's not just Coinbase, obviously. If it was an AWS outage, then it's not just Coinbase that was affected.

So is CME and everything like that. So we don't need to pick on Coinbase specifically too much. Let's see what Reuters has to say. Amazon's Cloud Unit reported an outage at one of its data center zones in Northern Virginia on Thursday. while derivatives marketplace CME group and crypto exchange Coinbase said there were issues with their trading platforms. So what is the issue? AWS said this issue stemmed from increased temperatures within a single data center and it was observing early signs of recovery as it was able to get additional cooling systems capacity online. So the servers were being overheated, which had big

knock on effects because of course I mean so much of the internet relies on AWS including many crypto exchanges and I don't want to say it, but a lot of nodes run through AWS as well on layer one chains. But in a later update, ADWS said that work to add more cooling capacity, which is needed to safely restore the remaining affected systems was taking longer than expected and has no time line for full recovery as of yet. I mean, it seems not connected to the stuff that we were talking about on Wednesday in terms of non-technical teams at Coinbase shipping production code using LLMs to do that. So it doesn't seem anything specific.

It's not like someone accidentally pushed some dodgy Claude code into Coinbase's code which kind of sent everything offline. It does seem to be due to its hosting. I just want to pull up some tweets here from Gergley or Oz, who if you're not familiar with this guy is a big-time influencer type thought leader for. for all things software engineering. And he has this to say, unfortunate optics for Coinbase

to have an hours-long outage when customers could not trade a few days after their CEO said how non-technical teams are shipping code to production. And he also points out that the outage is because Coinbase seems to have a hard dependency on AWS and when AWS or part of it is down,

so is Coinbase. He says this is a choice or trade-off by the Coinbase engineering team. And he has some qualms with Coinbase's information around the downtime. Gergley actually expands on it a little bit further down in a reply to reply guy. He says, better providers take responsibility for putting all eggs in one basket and not having failover options.

If you push blame to the provider you chose, you're admitting you are fully dependent on them and have no plan B never had. Which, you know, I mean, I get that we have decentralized exchanges. So we have decentralized alternatives that aren't, you know, bound to. the uptime of AWS. So perhaps this is an advertisement for Dexas. And we are seeing Dexas take up. I think the latest stats are like 25% of all crypto trading volume is on Dexas and it's

growing. So there is something there. But I will say that it does seem odd that we have major crypto exchanges that routinely go down due to AWS false. And again, I just don't hate to be the hand-werext. are in chief here. But if we are going towards massive compute bottlenecks and all that kind of stuff and a huge amount of increases in web traffic due to the rise of AI and the rise of agents,

then I would say that we are going to see more and more outages from AWS, from Google, that we could have this happen more often, that perhaps we are going to see even more volume push towards Dexis. because of this stuff that keeps happening. But at least for the moment, what's the latest update on the Coinbase status page? It says that all markets have been reenabled for trading on Coinbase.com and in the Coinbase apps, Coinbase customers can log in to trade.

So all good, it seems. Let's take a look at the price of Bitcoin throughout all of this at least to see what happened to see if Coinbase users were locked out of, any particular price action. Let's have a look. What's actually awkward here is you can see it on the street in the price of Bitcoin is that around the time that Coinbase went down due to the AWS outage, Bitcoin actually began slipping below 80K and actually hit a low of around 79300. So it wasn't the biggest dip, but in the meantime, Coinbase users were locked out of either kind of opting out of this dip or buying the dip at least until this morning.

So, I mean, it's not without impact when Coinbase goes down like that. So it could be something to consider for the Coinbase engineering team, whether they would like to reduce their reliance on AWS moving forward, considering how sketchy it can be at times. The last time that AWS went down like this, it's back into the Reuters article. It was last October when apparently that particular problem was something, with an underlying subsystem that monitors the health of its network load balances used to distribute traffic across several servers. So something to do with load balancing.

So yeah, I mean, October wasn't that long ago, about six months ago and then down again. I imagine on that trend, there's at least going to be something happening in the next year. So, hey, let's just chalk this up as a great advertisement for decentralized exchanges. Okay, what have we got next? Step into a new era of digital wealth with NXO, the premier digital assets, wealth platform. Earn interest on your digital assets, borrow against them without selling, trade a wide range of cryptocurrencies, all in one place. Nexo is now available again in the US with an evolved product suite tailored to today's market. For a limited time, new US clients can

unlock 30 days of exclusive wealth club premier benefits, including enhanced interest rates, reduce borrowing costs and up to 0.5% crypto cashback on trades. Get started today at nexo.com slash breakdown. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. Okay, so next up, I mean, I just wanted to talk a little bit about prediction markets and meme coins and where the attention actually is. Because it's been something that I've brought up a couple of times on the show that meme coin interest appears, feels like it's declining. You know, we don't have dog coins anymore. We don't have shady celebrity coins.

You know, we don't have the terminal of truth coin pumping anymore. And on the surface, it feels like that is because all the attention is on prediction markets. So I figured, why not? Let's see if we can actually prove that in the data. So what I did is actually pulled some data from the Blockworths Research Platform and from June to combine Kauci and Polymark. And I understand there's a ton of other prediction markets too. These are by far the biggest. And I've plotted them here on a chart that you can see on the screen.

And the idea is that can we see in the data that prediction markets have overtaken meme coins for, you know, mine share and market share, you know, and whether that's a real thing. Let's take a look here. This is just in linear view. You can see it on my screen. And if you're listening to the audio only, I apologize. Hopefully I'm able to convey everything as if you were looking at the chart as well. What is interesting is that, I mean, first let's remove the open interest and just let's look at the the Kalshi and Polymarket notional trading volume compared to the meme coin volume on centralized exchanges combined both spot trades and perps trading. You can see that meme coin trading is still way bigger than trading volume on prediction markets. I mean, the numbers that you're looking at on screen are a 14-day cumulative total for so that's what the numbers are. In the past 14 days, there's been about $95.6 billion worth of meme coins split between spot and perps, traded on centralised exchanges. At the same time, the trading volume on prediction markets, Kaushi and Polymarket,

is only 11.4 billion. It's about nine or ten times. the volume between meme coins and prediction markets. So I was blown away by that, that for all of the hype around prediction markets, it's still meme coins that is at least a bigger market right now. And of course, we don't know how much of this volume is market makers. I'm talking about the meme coins and stuff like that. So perhaps if you were looking purely at, I don't want to say organic trading, but like the natural trading of buyers and sellers separated from market making volume, then perhaps the meme coin sex volume would be lower. I'm not too sure that kind of warrants further investigation. But I did find that particularly interesting. If we switch to the log view

here, we can kind of see the trend. And at least there is some trend. So while meme coin volumes might be much higher, there is a trend that does show that meme coin volumes have been declining since November 24, which was a massive month for meme coin trading. It's been going down since then, while at the same time, prediction markets volume have been trending upwards, you know, most of the time, if not the entire time. You know, in log view, it looks like these guys are very close together, but actually, you know, there's at least almost one order of magnitude difference between the two. And if we switch

from volume, if we compare meme coin sex volume across spot and perps to open interest instead, you know, we can see the same sort of trend that open interest is just slowly, gradually going up on prediction markets while

meme coins are slowly going down. So I just found this particularly interesting in that one, meme coins aren't exactly dead, there is much more happening on meme coin markets than there are prediction markets. But of course, I mean, as I said, we haven't really separated our market maker activity. And these are just like flat volume numbers coming out of the centralized exchanges as reported by Blockworth's research on the platform. And the reason that I bring all of this up is that we shared on my stream.

We had this great report come out from Sean to Devons from Blockworth's research. all about HIP4's outcome markets, which are a new primitive on hyperliquid that have launched, because many people have pointed out that perhaps like prediction markets that come to hyperliquid might actually displace either polymarket or Kauci or both of them. It's basically a new engine for the prediction market space in hyperliquid through HIP4. And I would encourage you to jump on Twitter and check out this report because it's truly, I would say, the most deepest of dives into the current state of hyperliquid and hypercore in context of specifically of prediction markets. But Shonda has done a great job here here at kind of undercutting the expectations that many people have around Hip 4. Let's just read a little bit of it here.

Shonda explains that this idea of framing hip-4 as purely hyperlinked entry into the prediction market duopoly is a little bit misguided. While directly understandable, this framing misses the more important point. Polymarket and Kashi are consumer distribution businesses while HyperCore is market infrastructure. He goes on, Polymarket and Kashi sit at the top of the retail funnel. Their advantages of consumer U.S. Market Curation, brand, media attention, partnership, and in Kashi's case, regulated access to U.S. event contracts. Their product services are organized around attention-heavy categories such as politics, sports, culture, and macro events,

rather than primarily around institutional hedging demand. These are consumer acquisition businesses built around narrative and retail engagement, monetizing users who are unlikely to choose venues primarily on execution cost. What he explains is that HIP4 is, is it kind of, it gives, it allows builders to compete with, if they would like to build an alternative to Polymarket and Kauci. And there's a lot of reasons why we might want decentralized alternatives to particularly Polymarket due to, I mean, you know, if you look closely at how Polymarket resolves disputes on markets through, through the Uma Oracle and, and the relationship between Uma and Polymarket itself. You'll find that there's been quite some instances of controversial decisions around those dispute processes

that have, I mean, for one, there can be the very least, not exactly what traders and users are expecting to happen throughout the resolution process. And in Polymarket and Uma's defense, those decisions were made in order to disqualify centralize the decision making around these disputes. So that is quite commendable. But there is clearly opportunity for new kinds of systems built on decentralized architecture that can legitimately challenge, I believe, Polymarket and Kashi. And Shaunda is right. It really depends on then

the ability to attract users and retain them, especially if you're considering that the power of Polymarket and Kauci are distribution channels rather than market infrastructure. Let's take a moment to talk about NXO. NXO delivers a premier digital assets wealth platform designed to help clients build, manage and preserve their wealth, earn interests on your digital assets, access crypto-backed credit without selling your holdings, trade with advanced tools, all supported by 24-7 client care. Now back in the US, NXO offers new clients 30 days of exclusive wealth club premier access. That means enhanced interest rates, reduce borrowing costs, and up to 0.5% crypto cashback on

trades benefits typically reserved for wealth club members and private clients. Nexo is also expanding its global presence becoming the official crypto partner of Tennis Australia, the organization behind the Australian Open and the digital asset partner of the Audi Revolut Formula One team. If you're ready to approach digital assets with a more structured wealth strategy, visit nexo.com slash breakdown to get started. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. You know, I just wanted to point it out. I mean, but you know, go on to and read out this great article from Sean for more information about how Hip4 works. But the reason I wanted to plot out the data is just to show, one, meme coins are still a thing,

apparently, even though they are much less of a thing in terms of raw trading volume than they were a year, a year, a year and a half ago. But if it is true that prediction markets are taking a lot of the mind and market share from meme coins, and effectively turning meme coin traders into prediction market traders, if that is the case. And we can't really see if it's the same traders that we're trading meme coins that are now prioritizing prediction markets. We can't really see that in the data at least that I'm showing on screen. There is a huge opportunity here for enormous growth should meme coins continue to decline

in terms of volume while prediction markets get better and better. and better at servicing users because if you take this logic to the nth degree, then perhaps mean coin volumes will continue to decline and replaced by prediction market volumes. And if that is so, there would be so much room for growth in prediction market volume, in prediction market open interest. So what I am seeing is that this is quite, quite bullish and quite optimistic for growth in the prediction market area. And a lot of people, of course, this is not like a new thought. But at least there is data to suggest how much

that it could grow over the next year or two. And I wouldn't surprise me if at least went 5x, let's say, in the next year or two. You know, especially if meme coin volume continues to decline. But of course, as soon as As prices are up, and as soon as markets reversed, and we start feeling like we're at the end of the bear market going into the bull market, you can almost guarantee that meme coin volumes are going to pump again, likely alongside Polymarket as well. But this is just what I'm watching in terms of,

in terms of this particular sector of the market. Okay, what have we got next? Okay, next up we have some stuff about agented commerce, on-chain AI agents. we are truly in another era of partnerships. Partnerships are so big right now. And the one from earlier this week was Salana Foundation launches pay. dot SH in collaboration with Google Cloud.

I've got it up on my screen here. In collaboration with Google Cloud, we're introducing pay. com, a gateway service designed to bridge the gap between autonomous agents and enterprise infrastructure. So through this Google Cloud partnership, agents, can now instantly discover access and pay per request for any API autonomously for the first time supporting APIs from Google Cloud, including Gemini, BigQuery, Vertex, AI, and more using stablecoins on Solana. No accounts, no API keys, no subscriptions needed. That's pretty cool. I mean, pay SHs-it starts with a Solana wallet linked to your favorite AI interface, including Gemini

Claudecodec, Codec, OpenClahermys and more, on-ramp funds with a credit card or stablecoin in 60 seconds and your agent is ready to access paid services instantly. So it is, it's not just stablecoins, there's also credit cards involved in the platform. It's interesting that Solana have collaborated with Google Cloud for this particular partnership because it was only two days later yesterday on Thursday that AWS came out with this particular post that introduced the, that, that, introduces Amazon Bedrock Agent Core payments built with Coinbase and Stripe. So while we have Salana working through Google Cloud to allow agents to autonomously purchase API to autonomously make API calls using stable coins and

whatnot, we have Amazon building with Coinbase and Stripe to do exactly the same thing except through that payment protocol. And in here, I mean it mentioned stripe, but it doesn't actually mention tempo in the release. I have to imagine that it is through tempo. But, you know, and this is the one from yesterday. This is what AWS has to say. Early protocols like X402, ACP, MPP, and AP2 are pioneering what this looks like. And what they're referring to is that services, tools and content must be designed for humans and agents. Agents will discover, evaluate and pay for resources when they need or within a single execution loop. So this is meant to be Amazon's answer to that. Today we're announcing Amazon

Bedrod agent core payments, a new set of features in Agent Core enabling AI agents to instantly access and pay for what they use, such as web content, APIs, MCP servers, and other agents. We've built these capabilities in partnership with Coinbase and Stripe, who are providing the wallet infrastructure and payment rails that power the first set of capabilities. So I imagine that's tempo. So, yeah, we are, I. I keep harking back to 2018. But if you've been around since then, then you'll know you're used to these kind of partnership blogs,

but we are in a renaissance of that stuff. So, you know, name your favorite blockchain. Chances are they trying to get a blog style announcement like this out of Google Cloud and AWS or whatever major big tech company or internet infrastructure company. And it just seems like Coinbase and Stripe and Solana, have managed to get that over the line, at least this week. So, dueling blog posts from the majors here.

I just want to temper our expectations as always, and I hate to be that guy, but I'm going to do it anyway. Let's just check in on how big the on-chain agent economy is right now. So let's check out on Artemis, they have an agentic payments dashboard. Now we have Google Cloud, we have AWS, we have Coinbase and Stripe, we have Solana, all working to bring AI agents on chain paying for API calls. And as you can see on my screen, and again, if you're listening audio only, let's see if I can make it easy on you. We are looking at a big decline in total agentity payment transactions over the past six months. And for one, this is to be expected.

When X402 and MPP came out and, you know, for more information on this, please go back and listen to the episodes that have gone into this from the breakdown. I had a conversation with Blockworths Research Analyst Daniel Shapiro, all about the on-chainogenic meta. I also had a great conversation with Jordan Liu, who are the co-founder of AI Marketplace Platform, ISA that broke down the three layers of AI Gentic Commerce. Go back and listen to those for more information about what everyone is actually

building and what we're aiming for. But as you can see, in November, there was something in the region of, there was more than a million transactions on X402 happening every day. And a lot of that can come down to developers testing things and seeing what's possible and playing around with the new protocol, that kind of thing. Since then we have dropped off dramatically and we're now seeing about 100,000 transactions per day on X402 and only around around 12K per day on Stripe's MPP, which, you know, it's to be expected, but it's not like right now we are seeing much growth. Let's switch this over to the past three months. Basically, we have seen about the same level of activity of agenetic payments over the past three months.

months. So it's obviously very early days, but we are still a long way away from having a legitimate on-chain agent economy, at least at a big scale. Let's see what other we have down here. I mean, in terms of volume, and our Artemis filters a lot of the payments volume to remove game transactions like spam, wash or, you know, wash transactions or whatever. And basically, what we're seeing right now is about every day, about $50,000, US dollars flowing through X402 and MPP, which again is an incredibly small amount. And I understand that perhaps that is a function of AI agents in general. In that AI agents, they're going to be making micro transactions. So you're going to have to have a lot of transactions in order to convert to a high amount of dollar

volume. But right now the entire AI agent economy on chain amounts to about 50K per day, which is quite de minimis in the grand scheme of things. What is cool, though, is that we are still seeing growth. So while the number of sellers are the amount of AI agents that are selling services or data or what have you to purchasing agents, while that is tapering off somewhat, there is a continued rise in the number of AI agents that are purchasing through API calls and all that kind of stuff. So that's somewhat reassuring that there are more AI agents looking to actually buy services and data and whatnot than there was even yesterday or last week.

So that's reassuring. But there is still a big gap between Stripes MPP and X402. 95% of all volume is happening on X402, or only about 4, 5% is happening on on Stripes MPP. So a question mark over whether both AWS's partnerships and Google Cloud's partnerships within the AI agent on-chain space are going to move the needle. But it's about the best that we could hope for

in terms of actually having the internet's biggest companies behind to actually building the infrastructure. structure required to have AI agents use stable coins and all that kind of stuff. So again, still very early days. The AI agent economy is still very small, but that is perhaps the most exciting time because we get to see it unlock over the next year or so. And let's see if we can pump these numbers up. But I think that about covers it for today.

If I've missed anything interesting, if you think I should talk about something cool that that I didn't talk about. Please reach out to me on Twitter, reach out to me on email, let me know, David at blockwash.com. And smash like and subscribe on YouTube or the equivalent on whatever podcast platform

you're listening this on. We appreciate a lot. It helps us out a lot. And in any case, as always, look after yourselves. Have a great weekend, everybody. Goodbye.