To create an open financial system, we want to work together with all of the cryptoeconomy’s builders and believers. In January, Coinbase launched Asset Hub to open the door to asset issuers, while streamlining our listing process. Coinbase’s standard listing evaluation framework uses the data that is submitted via Asset Hub to ensure that every asset Coinbase supports meets our eligibility requirements for our legal, compliance, and technical security reviews. In this post, we share more guidance for asset issuers on what we expect and tips for getting yours reviewed as efficiently as possible.
Important factors to consider
Certain activities and attributes, from how an asset is built and coded to how it works in the cryptoeconomy, can raise additional questions and require further review from our team. Here’s a list of common reasons we may take longer to review your application. But this is just a guide: your application may still be approved, even if one or more of these statements are true for your asset.
Investment or profit
The developer or issuer team has made claims about the asset being an investment or a security, or that users or holders will see a rise in price or return on investment in the asset.Initial tokens were distributed in a sales or offering event to users (in exchange for fiat or other crypto).The platform associated with the asset lacks a real or supportable use.The asset was distributed prior to being usable for its intended or stated purpose.The application doesn’t include information on UBOs (Ultimate Beneficial Owners), executives, or key individuals associated with the project.Information on sources and fundraising methods in the application is limited or conflicting.The project has close association with prohibited categories of businesses as defined in Appendix 1 of our User Agreement.
Many assets implement privileged roles that have the ability to unilaterally take administrative actions, such as arbitrarily changing network functionality or seizing user funds. If misused, many of these privileges threaten Coinbase’s ability to safely custody customers’ assets, lowering the likelihood that Coinbase would list the token. Coinbase prefers to see asset issuers follow the principle of “least privilege,” where privileged roles are scoped as narrowly as possible to the minimum required functionality. This includes situations where asset issuers renounce privileges that are no longer critical. In cases where these privileges cannot be eliminated, we prefer that asset issuers provide detailed policies and procedures for quorum-based key management and use, especially for actions that impact user balances. Ideally, keys would be held by a qualified custodian that can certify that the quorum is met before the role is able to take action.
Degree of centralization
The network has centrally controlled nodes or validators that can collude to influence the state of the blockchain.A central team is in control of enabling or maintaining the platform’s functionality or code, with few to no contributions from unaffiliated third-party developers.The keys necessary to perform privileged actions like pausing transactions, modifying token balances, or completely changing the token’s logic are controlled by a single individual or held in a single system.The project’s core team owns a significant percentage of the asset which can be used in community governance to force a vote decision. Similarly, too much of the asset share controlled by one party in a proof-of-stake blockchain will increase the risk of that party tampering with mined blocks. This could result in censorship or double spending.
Novel and unverified code
The source code is private or, for Ethereum projects, not verifiable through Etherscan. Without access to source code, an auditor or security engineer cannot easily analyze the token’s behavior, precluding high-confidence reviews and causing significant delays.The asset never received a security audit from a reputable auditing firm, especially if the code is complex or novelThe source code does not use industry standards. Whenever possible, favor well-vetted standards such as OpenZeppelin’s vast repository of smart contracts. If implementing a special feature, such as off-chain signing or transaction hooks, use EIPs as guidance.
We hope this guide makes it easier for asset issuers and their teams to navigate Asset Hub requirements and start the listing process. Complete, correct, and well-documented applications are more likely to receive a prompt review.
As always, we can’t wait to list compliant assets on Coinbase and to see all the ways you’re driving the cryptoeconomy forward. To learn more about Asset Hub, visit assethub.coinbase.com.
Disclaimer: The analysis concerning whether a digital asset is appropriate for listing may evolve over time, as the nature of digital assets, applicable precedent, and SEC statements and interpretations change and evolve. Each member of the community is encouraged to seek legal advice from its own attorneys to obtain legal guidance on these subjects. Neither Coinbase, Inc. nor its respective affiliates, directors, officers, employees, security holders, agents and attorneys, are acting in the capacity of attorneys for a particular project team.