Microsoft‑Backed AI Builder Bets On Coinbase’s Layer‑2 Blockchain For ‘On-Chain Scale’

• The platform is built on Microsoft Azure AI tools and integrates with Space and Time to provide a verifiable, zero-knowledge-powered data layer.
• Microsoft previously led a $20 million investment in Space and Time, reinforcing its long-term focus on combining AI with blockchain infrastructure.
• Coinbase’s Base network serves as the deployment and monetization layer for Dreamspace applications.

Microsoft (MSFT) announced on Thursday that its venture arm, M12, is backing the public rollout of Dreamscape, an AI-powered app builder that will run on Coinbase’s (COIN) Base Layer-2 blockchain.

“We’re building Base as an open stack for the global economy that empowers anyone to build and create on-chain,” said Luca Curran, Head of AI, Base Ecosystem. Dreamspace is built using Microsoft’s Azure AI tools, including Azure OpenAI, and integrates with Space and Time, which provides a verifiable data layer using zero-knowledge proofs. 

Microsoft previously led a $20 million investment in Space and Time in 2022. MSFT’s stock fell over 3.5% in midday trade. On Stocktwits, retail sentiment around the tech giant fell to ‘neutral’ from ‘bullish’ over the past day, while chatter remained at ‘normal’ levels.

Meanwhile, COIN’s stock fell 2.5% in midday trade amid broader weakness in the market. Retail sentiment around the cryptocurrency exchange on Stocktwits trended in ‘extremely bullish’ territory over the past day, accompanied by chatter at ‘high’ levels. 

Coinbase’s Base Network Positioned for Creator Economy

Nate Holiday, the CEO of MakeInfinite Labs, the original developers behind Space and Time, said that the integration with Base is meant to create “on-chain scale.”

Coinbase’s Base network serves as the deployment and monetization layer for Dreamspace applications. M12 said the Layer-2 blockchain offers low transaction fees and fast settlement, enabling users to launch apps and generate revenue through token-based models, including tips, subscriptions, or gated access.

The move aligns with Coinbase’s broader strategy to expand Base into a platform for on-chain applications beyond trading, targeting developers, creators, and businesses.

AI Developer Platforms Race Heats Up

Dreamspace enters a growing field of AI-driven development platforms. Coinbase has also supported tools like AgentKit, which gives AI agents wallets and on-chain capabilities. Meanwhile, general-purpose AI platforms such as Amazon (AMZN)-backed Anthropic’s Claude and decentralized alternatives like Venice AI are increasingly capable of generating software.

Crypto wallets, including Trust Wallet, are also beginning to introduce agentic features, reflecting a broader shift toward automation in digital asset ecosystems.

Despite the competition, Dreamspace has already gained early traction. Since launching in beta last year, users have built more than 34,000 applications on the platform, including projects from student developers in emerging markets, such as Indonesia.

Read also: SpaceX IPO Valuation: The $500B Gap Between Wall Street And Blockchain Nobody Is Talking About

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