The most revealing number in an exchange’s financial statements is no longer necessarily its trading volume. Coinbase reported $2.83 billion of subscription and services revenue in 2025; Payward, Kraken’s parent, said 53% of its $2.2 billion adjusted revenue came from asset-based and other activities. These figures are not identical accounting categories, but both undermine the idea that an exchange earns only when someone clicks Buy or Sell. The business is becoming a mixture of brokerage, payments distribution, custody, financing and software. For investors, that diversification can stabilize revenue—or introduce new interest-rate, counterparty and operational exposures. [1][2]
The useful question is therefore not merely which exchange lists the most coins. It is what economic activity each exchange can monetize, how repeatable that income is, who ultimately bears the underlying risk, and whether a profitable-looking revenue stream belongs to the exchange or is shared with partners. This analysis reconstructs the principal revenue layers and models what happens when both trading activity and short-term rates move against them.
The Published Numbers Already Challenge the Trading-Fee Narrative
Coinbase’s audited 2025 filing divides approximately $6.9 billion in net revenue into $4.1 billion of transaction revenue and $2.828 billion of subscription and services revenue. The latter is approximately 41% of the total—up from 37% in 2024. By its August 2026 second-quarter earnings communication, Coinbase said subscription and services had risen to 48% of net revenue for that quarter, generating $555 million. Investors should not turn that quarterly percentage into an annual forecast: the denominator can change sharply when crypto trading volume changes. Still, its direction provides evidence of a different mix than the pure fee model. [1][3]
Kraken’s parent Payward reported adjusted—not GAAP-comparable—2025 revenue of $2.2 billion, 47% trading-based and 53% asset-based and other. Its categories include custody, yield, payments and financing. The numbers cannot be added to Coinbase’s as though definitions and business perimeters matched. Payward’s acquisitions, institutional services and other asset classes make it a different enterprise; the useful comparison is the economic direction. Both are trying to earn from customers who hold assets, not just those who trade frequently. [2]
FIGURE 1 | Original visualization; sources and scenario assumptions in article and methodology.
This migration changes the platform’s incentives. When earnings are entirely transaction-driven, volatile markets can be good for revenue even when customers lose. When an exchange monetizes balances, custody, subscriptions and payments, it has stronger reasons to retain assets and long-term account relationships. It can also face pressure to increase product participation or persuade customers to keep funds within its ecosystem. More recurring-looking revenue does not automatically mean less risk; the contract behind each line matters.
Follow the Stablecoin Dollar, Not the Trading Ticket
The strongest disclosed example is Coinbase’s stablecoin arrangement. Its 2025 annual report shows $1.349 billion in stablecoin revenue, up approximately 48% from 2024. Coinbase identifies higher average USDC balances both on and off its platform as positive contributors, while lower average interest rates reduced revenue. Circle’s own filing reports higher distribution costs paid to Coinbase as its reserve income and partnership activity expanded. That is important: the exchange is participating economically in a stablecoin distribution network without needing to issue the reserve assets itself. [1][4]
The economic chain can be simplified: users hold or transact in USDC; the stablecoin issuer invests eligible backing assets; interest-rate and balance dynamics influence gross reserve income; contractual distribution arrangements allocate part of the economics to participating distributors. This is not the same as Coinbase retaining the entire yield on every customer’s dollars. Nor does a customer automatically receive a proportionate share of that income. Contractual terms, location, product and incentives decide how revenue is split.
FIGURE 2 | Original visualization; sources and scenario assumptions in article and methodology.
To see why a stablecoin revenue line deserves sensitivity analysis, suppose a hypothetical distributor participates in 50% of annual gross yield from an average $40 billion USDC-related balance. At a 4% yield, the illustrative distribution would be $800 million. At 2%, with balance unchanged, it becomes $400 million. If balances rise 25% to $50 billion while yield falls to 2%, revenue is only $500 million. These are NOT Coinbase forecasts or its contractual economics; they deliberately isolate two drivers to show why rising adoption can coincide with falling income. Annualized gross yields are not necessarily realized net reserve income. [1][4]
The additional risk is concentration. A platform may report growing stablecoin-linked services even as a single issuer, a single coin and reserve interest income account for a large slice of that growth. Regulatory changes, competition for distribution or a shift in central-bank rates can alter the economics without any decline in active users. Analysts should therefore ask for average balances, effective economics retained and sensitivity to yields rather than focusing on the number of stablecoin transfers.
Staking: A Fee on the Rewards, Not the Tokens
Staking creates a second source of fee income. A platform may pool or route client crypto into network validation services and retain a commission from the rewards generated. Its custody technology and validator operations can make staking convenient, while the customer generally retains the underlying market exposure and bears specified protocol, lockup and slashing risks. Coinbase’s published fee disclosure states a standard 35% commission for certain supported staking assets, with different rates for eligible paid subscribers. Kraken’s current support information describes a 30% commission for flexible staking and Auto Earn, although methods and asset eligibility differ. These are product terms, not uniform industry margins. [5][6]
Consider an illustrative $10,000 token position earning a 5% gross network reward over a year, with the token price assumed unchanged. Gross tokens earned would have a starting-value equivalent of $500. At a 30% commission the platform retains $150 of that reward stream and the customer receives $350 before any other product-specific deductions. At 35%, the equivalent platform share is $175 and the customer share $325. The percentages do not apply to the $10,000 principal, and returns can vary in token units or dollar value. If token price declines 30%, a positive staking yield does not erase a large capital loss.
The most important profitability distinction is gross revenue versus net retained revenue. Operating nodes, paying custodians, covering insurance, fraud, customer support and regulatory costs consumes resources. An exchange can have growing staking fees with no assurance of growing profit per staked dollar. Before describing such revenues as predictable, test validator dependence, reward-rate compression, the customer’s ability to withdraw and legal treatment in relevant jurisdictions.
A Revenue Quality Matrix, Not a Feature Checklist
| Income channel | Primary driver | Most important risk |
| Spot and derivatives fees | Trading notional, fee tier and routing | Volume / fee competition |
| Stablecoin economics | Eligible balances and rates | Lower rates / contract renegotiation |
| Staking services | Rewards, participation, retained commission | Token prices / validator / regulatory risk |
| Custody and prime | Billable assets, contracts and service costs | Asset withdrawal / security / concentration |
| Financing | Interest spread, collateral and credit performance | Gap losses / borrower default |
| Subscriptions and APIs | Retention and enterprise usage | Churn / benefit costs / compliance |
TABLE 1 | Analytical framework compiled for this article.
The matrix matters because investors routinely call all non-transaction earnings ‘recurring.’ A subscription renewed each month behaves differently from a stablecoin share driven by prevailing short-term rates; a custody contract behaves differently from a loan whose borrower can default. The accounting label is useful, but underwriting cash flows requires an understanding of rate, balance, volume, counterparty and regulatory sensitivity. Different firms also recognize gross versus net revenue differently, so percentages should not be compared before reading accounting policies.
Custody Monetizes Retention—But Has a Different Cost Structure
Institutions often pay for custody, governance controls, reporting, transfers, approvals and integration. Retail custody may be bundled with trading access, but institutional safekeeping can be a separately priced service. The financial value of custody lies in serving capital that does not necessarily move each day. This creates an economic incentive to maximize assets on platform, deepen integrations and reduce account churn. Kraken’s July 2026 change to Pro fee tiers explicitly considers assets on platform when assigning certain fee levels, showing how holdings and trading incentives can be combined. [2][7]
Imagine two platforms each hold $10 billion for clients. Platform A charges a hypothetical 10 basis points a year on qualifying institutional custody balances, yielding $10 million gross annual fees if all assets qualify. Platform B includes retail safekeeping without a custody charge but earns indirectly when customers use its markets and products. Those business models cannot be valued on the same nominal assets-under-custody headline. Eligible billable assets, fee waivers, sub-custodians and service costs determine economics.
Custody also transfers concentration of operational risk. A reassuring phone app can hide omnibus wallets, sub-custodians, internal ledgers, settlement delays and legal ownership structures. These are explored from the user’s perspective in Dave Finances’ analysis of exchange security and behavioral fraud detection, which shows why identity checks and monitoring matter even before market risk enters the picture.
Margin Lending, Borrowing and the Interest Spread
A platform offering spot margin, loans or other financed positions can receive interest, finance fees or lending-related revenue. Such income depends on collateral quality, loan-to-value limits, liquidation timing and borrowing costs. It may look attractive in quiet markets, precisely when defaults appear remote. The losses arrive during price gaps, correlations and liquidity shortages. Coinbase reports $247 million of interest and finance fee income for 2025 within its subscription and services segment; that line should not be assumed to consist solely of retail crypto loans. [1]
The simplified lender model is net interest margin: interest charged to borrowers minus funds or balance-sheet costs, provisions and operating expense. With $500 million hypothetical average interest-earning exposure and a 3-percentage-point annual net spread before defaults, gross spread is $15 million. A 2% loan loss measured against the same exposure would subtract $10 million, leaving just $5 million before other overhead. A modest deterioration in credit outcomes can overwhelm an apparently healthy rate spread. The risk is especially acute when collateral and borrowers are exposed to the same crypto price shock.
Not all leveraged-product cash flows are exchange revenue. Perpetual funding is generally a payment between long and short participants; the trading venue may collect trading or liquidation fees separately. Confusing funding transfers with exchange income double-counts the business. Dave Finances’ guide to crypto perpetual funding and liquidation explains why the trader’s cost and the platform’s recognized revenue are not interchangeable.
Subscriptions, APIs, Prime Brokerage and Payments
Paid plans can bring recurring subscription fees and customer loyalty. Examples include reduced commissions, expanded analytics, rewards, support tiers and account tools. But free-trading benefits or rebates mean nominal subscription revenue is not incremental profit. The appropriate measure is contribution margin after foregone commissions, servicing and incentives. Coinbase describes growth in paid Coinbase One subscribers as a contributor to its 2025 other subscription and services revenue. [1]
Institutional trading and prime services add lending, execution, settlement, connectivity and reporting. Enterprises integrating wallets or stablecoin payment rails may pay technology or processing charges. These create B2B customer relationships that can be stickier than consumer trading accounts, but require expensive compliance and infrastructure. Coinbase’s Samsung Wallet stablecoin integration illustrates the strategic shift from simple exchange trading to broader payment distribution; an integration announcement, however, is not proof of a particular revenue amount.
Market-making spreads require more care. Exchanges may operate matching systems, act as principals in specified products, run separate subsidiaries or outsource liquidity. A quote with an apparent spread does not prove that the exchange captured the full spread. Likewise, payment-for-order-flow or routing economics vary by market and jurisdiction. A sound revenue breakdown separates disclosed fee income from assumed principal-trading or market-making profits and identifies related-party transactions rather than inferring profits from user interface prices.
Stress Test: A Bear Market Meets Lower Interest Rates
For an intentionally transparent scenario, start with Coinbase’s published 2025 net revenue components: $4.1 billion transaction and $2.828 billion subscription/services. Hold all other details constant; reduce transaction revenue 35%, and cut subscription/services revenue 20% to reflect combined pressure on balance-linked yield and products. Modeled net revenue is about $4.923 billion, versus approximately $6.928 billion starting, or 29% lower. If the non-trading stream instead fell only 5%, modeled revenue would be $5.757 billion, down about 17%. These are stress illustrations—not management guidance or forecasts. [1]
FIGURE 3 | Original visualization; sources and scenario assumptions in article and methodology.
Crucially, the test does not model operating expenses, acquisitions, transaction costs, stock-based compensation or taxes. An exchange can show steadier revenue without steadier earnings if it invests heavily in infrastructure. Conversely, a diversified revenue base could support profitability through a volume slump even when the price of Bitcoin declines. The analytical advantage is not to pick a winner from a list, but to identify which assumptions matter most and compare scenario sensitivity with published management commentary.
Where Diversification Can Fail
The bullish case says holding customer assets creates relationships that outlast trading manias. The bearish case says exchanges are simply replacing one cyclical driver with several: token prices affect assets in custody and staking rewards, interest rates affect reserve-related income, regulatory decisions affect product availability, and market stress affects lending defaults. The drivers are correlated, not independent. A dramatic selloff could simultaneously reduce token values, accelerate withdrawals, impair collateral and raise compliance costs.
Revenue diversification should therefore be judged with three falsifiable metrics: the share of non-transaction revenue derived from customer balances rather than fee subscriptions; how much revenue changes for a 100-basis-point yield shift; and whether customers retain assets through a prolonged low-volatility period. If management stops disclosing useful breakdowns while emphasizing ‘ecosystem’ scale, confidence in the quality of diversification should fall. An investor cannot infer durability from new product launches alone.
What Retail Customers and Shareholders Should Watch
For customers, inspect what the service earns from your activity and whether a reward program changes legal rights. Staking commissions reduce rewards; subscription savings require actual usage; collateral loans create liquidation risk; and an apparently free stablecoin balance may generate income elsewhere in the distribution stack. For shareholders, watch contribution margin by service, interest-rate sensitivity, assets held versus traded, custody arrangements and compliance cost—not merely active accounts or app-download charts.
The bottom line is that the exchange is becoming a financial platform with several profit pools, not an internet tollbooth charging a flat commission. Coinbase’s disclosed revenue shows that the shift is financially material; Kraken’s published mix shows it is not unique. The next question is whether those revenues survive stress without shifting disproportionate risk back to customers. The answer must come from audited disclosures, contractual terms and observed behavior through a downturn, not from the number of icons on a trading app.
Methodology
Data sourced from Coinbase 2025 Form 10-K and Q2 2026 shareholder communications, Kraken/Payward 2025 adjusted-results announcement, Circle SEC filing and current provider fee disclosures. Percentages derived using reported categories; figures rounded. The hypothetical stablecoin model assumes a fixed 50% distribution share, constant rate on specified balances and no costs; it does not represent a real agreement. The financing model and stress scenarios are illustrative first-order calculations. Comparability limitations between GAAP net revenue and company-defined adjusted revenue are explicit. Research verified through October 13, 2026.
Sources & primary documentation
Johan Shamshad is a financial markets writer at Dave Finances covering cryptocurrencies, trading platforms, brokers, fintech, financial regulation, and developments across global markets. He previously worked at Gulf News, adding newsroom experience to his coverage of fast-moving financial and digital-asset markets.
His work focuses on identifying market-moving events, company developments, regulatory changes, product launches, and shifts in trading and financial infrastructure.
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