Coinbase Launches Tokenized Stocks on Base

Transcript

Coinbase tokenized stocks. That's a pretty big announcement. Jesse, welcome back to the podcast. >> Thanks for having me. Excited to be here. >> Tell me about this announcement. You guys are putting stocks on base. What are the details? >> Yeah, so I think we think the whole world is going to move on chain. And we're building base to be the blockchain for global finance. And so when you look at the world's assets, one of the biggest asset classes in the world is stocks, uh, equities. Um, and that's what we're doing. We're taking those stocks and equities, we're tokenizing them, we're putting them on base. That makes them 24/7, 365. It makes them globally available and it makes them instant, uh, fast, cheap to do anything with. And I think, you know, the first thing that people are going to start doing is trading. Uh, you know, now you

can trade that any app anywhere. But I think that that's really just the beginning. What comes next is people are going to be building borrowing lending experiences ac around them. They're going to be building ways for people to build yield. They're going to be, you know, issuing meme coins paired with them. We're basically just plugging this massive asset class into the programmable economy that is base and making it so that the world's innovators can now basically build anything with equities. And so I'm super fired up about it. Uh and I think we're going to see a lot of adoption and innovation coming coming along. The product name is Coinbase tokenized stocks. Pretty straightforward. So there's a token on base. there's a share of a company somewhere just legally speaking because

we need to, you know, brush our teeth, make our bed, do our homework, and get kind of the ba basics out of the way. How are these two things connected? Like legally speaking, what's the legal structure here? >> Yeah. Well, one of the things that we've really focused on uh is making it so that these are real onetoone stocks. And so, um, every tokenized stock has a onetoone representation that users have a direct claim on. Uh, we've done this in collaboration with Abu Dhabi and Alpaca. Um, and we think it's the best model for for to for tokenizing uh equities. Um, we think that this is going to lead to them um uh being more widely adopted, more trusted by consumers and institutions uh and just give better properties to the people who actually hold them. Uh and so this I would say is the Coinbase way of doing

things. Uh you I was talking with someone and um they said I feel like Coinbase is the Navy. Um, sometimes we move a little bit slow uh because you have to get boats around the world to get there, but we're always going to come >> and when we come, we're going to come in force and we're going to be the people that people can always count on um to bring the best version, the most trusted version to market. And so that's what we've done with these tokenized stocks. Um, super excited to see what people build around them and how that trust leads to more adoption and growth. >> What about all the nuances of owning a share of a company? So there's like uh governance rights, investor rights, there's dividends. H how do the how are the nuances handled around these uh around these things?

>> Yeah, absolutely. So on this you're going to have uh dividends um you're going to have a direct claim to those um you're going to have governance rights. Uh so these are going to again be one to one with US stocks. Um and I think that that is yeah that's what we focused on unlocking with this and I think again it's going to be a real differentiator for the product in the market. So, say I own a dividend paying stock. How do I actually receive the dividend? Does it get like USGC gets sent to my wallet or mechanically? How does this work? >> Yeah. So, these are they're they're set up to be rebasing. And so, that basically means that when the dividend comes, it'll basically get credited to the stock token. Um, and the balance will increase basically of how much of the stock it holds. Uh and then there's

a multiplier directly in the token so that if you're uh kind of conser brokerage on top of it, you can show users, hey, you know, you just got this kind of increment that came in um and show the like direct one to one share, but also the value that your uh user is having from the dividend. >> Okay, cool. So that's that's a slight difference than like your traditional brokerage where your traditional brokerage would show you like ah 75 cents from this dividend from you know this quarter or whatever. The way you guys do is you just take the cash dividends, you buy the Coinbase tokenized stocks, and that gets allocated. Everyone's balances get allocated a little bit.

>> Yeah, exactly. >> It's basically a thing that lets us make these things more composable in the rest of DeFi. Um, if you're just paying out these dividends on top of them, uh, you could imagine there being like a fair amount of complexity with, okay, these are being held as collateral in this asset. Like, how does that actually work? versus um uh if you do this rebasing model, it unlocks a lot more composability across borrowing and lending and yield generation. Um and so that's what we've opted in for. I I think that over time we're going to see a lot of uh kind of iteration and experimentation here and we're pretty open-minded on saying, hey, um as we have more of these stocks coming on chain and people want to hold them in different form factors, we're going to keep innovating on the way people can

hold them. Um, and ultimately, I think this is one of the really powerful things with um, tokenization in general is when you're tokenizing an asset, you're bringing into this like almost infinitely uh, innovating environment where we don't really even know what people are going to build on top of the tokenized stocks that we launch. Uh, but we know that they now have a touring complete uh, globally available supercomputer that they can build any financial application with them. Uh, and that I think is just going to be um something where I expect a lot more is going to come than you know even what we can anticipate today.

>> Do I need to do any KYC or get my address whitelisted to hold these tokenized stocks or are these freely permissionless, publicly available just like a normal token that I would have come to expect? >> Freely permissionless, publicly available. Um, no KYC and they're uh they're restricted from US folks uh trading them at the interface layer. So you know uh folks are going to be applying their own kind of whitelisting or not whitelisting uh uh geo fencing uh and kind of adapting experiences for for US users there but on the blockchain on base um uh they're going to be fully open you can build anything with them they're not restricted uh you know they're not trading in certain pools they're going to be available on aer drrome and every other decks uh really excited to be basically making this

permissionless asset available to everyone and we've had a we've had a great um partnership with um uh the the folks in Abu Dhabi who have really leaned with in with us to figure out how do we do this in a compliant and trusted way um while also making this the most powerful uh like programmable primitive to go into this new economy that we possibly can. And so um it's been cool to get to work with them and uh just like see how forward thinking uh and and like kind of leaning into this onchain innovation that government's been and in particular the ADGM uh that's been kind of uh leading the the financial innovation in the country. What stocks are going to get tokenized first? Uh, so of all the stocks, there's a lot of stocks out there. I'm sure there's a lot of stocks that you base users don't

really care about. I'm sure there are a lot of stocks that a lot of base users do care about. How are you guys going about deciding which to do first? >> Yeah, I mean, I think we're starting with the the ones that we see the most demand for from retail folks. And so, uh, I think the first four that are rolling out are Nvidia, Meta, uh, Apple, and Google. And then we have another eight that are rolling out in the few days after that. And then we'll keep scaling that up until there's thousands um over the next little while. And so um the goal is to give people the ability to trade anything they want wherever they want. And uh you know if BAS is the blockchain for global finance, I think the way you make a a chain successful in that world is by bringing every asset uh

into that ecosystem and then providing the most powerful tools for developers um and for traders to trade those assets for to get leverage on those assets uh and to build new financial products on top of them. Self- custody won, but it still has a usability problem. A seed phrase on paper is still a single point of failure. Phones get lost, devices break, backups disappear. Bitkey is a self-custodial hardware wallet built for that reality. It uses a two of three multi-IG with keys split across your phone, the Bit Key hardware device, and Block. No single key can move your Bitcoin, and Block can never move it alone. There's no seed phrase to lose or expose. And if you lose your phone, your Bit Key, or both, built-in recovery gives you a path back. The hardware screen also lets you verify the destination before approving a

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out. There is a link in the show notes and once you become a banklist premium member, you can hop into the bank list discord and let me know how you like it. One of the cool things about Bass is it's got one of the most robust DeFi ecosystems of any chain that's out there. And so you guys the the DeFi ecosystem is not starting from day one with tokenized stocks. How are you guys leveraging what already exists on base to help kind of like accelerate the growth of the Coinbase tokenized stock ecosystem? Yeah, I mean I just on BAS's DeFi ecosystem, uh, you know, if you look at over the last two years, BAS is the the the DeFi ecosystem that has grown through the bare market, I think we're up like something like 30 or 40%.

Uh, where most of crypto ecosystems are down in terms of total value locked in DeFi. Um, on financing, which is something we look at really closely, where it's people building lend products, earn products, and borrow products. Base is now the second largest onchain ecosystem in the world after Ethereum. We just passed Salana. Um, and that's mostly being driven by people who are earning yield on their dollars. Uh, and then people who are borrowing dollars against their crypto. Uh, this is Bitcoin, Ethereum, Salana. Coinbase has done a great integration of that where you can get a one-tap loan. And then that's kind of led to a ton of other businesses plugging into that same liquidity to offer that same onetap loan experience for crypto majors. The thing we're really excited about with um,

stocks is that we can just plug in all of that DeFi ecosystem. uh to unlock them. So on the trading side, um these are going live with the deepest liquidity in Aerodrome. Uh Aerodrome's been an incredible liquidity hub on base for the last three years since the beginning. Um they're now the place where the most Bitcoin uh trades on chain in terms of spot. I expect that to happen uh you know and and them to grow pretty quickly on the the stock side as well. And then on the lending and borrowing side, uh you know, Morpho has grown huge on base. um AB as well. They're both going to be bringing bet borrowing and lending products and then a bunch of other folks around them as well. And I think because we already have super deep USDC liquidity that's looking for yield um and that's kind of

aggregated a bunch of demand when we have um these new stocks coming in that means that folks who are borrowing against them are going to get low rates and then we're basically be able to see this kind of flywheel that's developed around borrowing and lending and defy and base grow faster and faster. And so I think the the way I think about this is right now we've grown to I think be like about5 billion dollars of of of uh DeFi on base um with only crypto assets and now we're bringing the largest asset class in the world and I think it it's just getting started like we're going to get to 10 and then 20 and then 50 and then 100 billion and then I think much beyond that in the years ahead. The landscape of tokenized stocks is a pretty like competitive landscape and I

wouldn't say any one product has really captured a lead here. It's liquidity has been pretty fragmented. No one's really become a breakaway winner here. Uh so there's just been difficulty I think with incentivizing trading volume growing TVL to for tokenized stocks. everything is up and to the right, but it's just not at the same pace that I think a lot of crypto natives are used to seeing things go up and to the right when it comes to cryptonative stuff. Uh, so what is there a a strategy or a plan or incentives or anything to help kind of like juice the growth of the Coinbase tokenized stock ecosystem?

>> Yeah, well, I mean, first off, I'd say like I think crypto uh tokenized stocks are growing pretty quickly. Like if you just look at the data, it's like we have way more that there than there were a year ago. we have way more volume. Um, and I think if you compare it to stable coins, um, you know, it took four years for us to go from, you know, USDC and Tether issued to them really starting to be real material parts of the conversation. I think we're now like six months in with tokenized stocks essentially and um, they're growing pretty quickly and people are trading them all around the world and I think that that's just going to accelerate. So I think we're starting from a pretty good base. terms of how we're thinking about it, our focus is on making them really useful in the base economy and in

the crypto economy more broadly. And so I I don't think that um just like raw incentives are trying to drive um like pure trading volume is is ultimately what's going to win here. It's how do you deliver product experiences? Whether that's for consumers who now have more access to this new asset class because previously they're unbrokered, four billion unbrokered people in the world who now actually have access to equities. um uh or they're more useful so that um you know folks who maybe previously held equities in a brokerage but um weren't able to actually do really useful things with them because that was maybe only available to people who have more net worth or um only available to people who had access to a certain financial product can now do a lot more. So that's be borrowing against their portfolio so that they have more

flexibility. It's going to be doing yield generation um with things like covered call selling uh with lending out so that folks can um uh kind of you know do do the covered calls or or whatever other yield generation strategy they want to do. Um I think that that is um going to be just like a huge unlock where you basically take a bunch of um financial tools that have previously only been available to a small subset of the population even if the population had access to stocks and bring them to everyone. And so I'd say that's the big focus for us is basically making it so that uh these these assets just become more useful because they're they're built on chain. That's the whole consumer side. I think we'll see the same thing play out on the business and enterprise side as well. Um where you

basically are going to see all kinds of new fund management strategies that open up because these things are programmable and liquid 247 365. Um, I think we're going to see um new kinds of ways that businesses manage their treasuries uh because they are um actually able to access a lot more assets just out of the box. You know, we have business banking uh partners like Slash who have been adding stable coins to their products and now because they're already kind of like wallets behind the scenes, it's easy to add Bitcoin. It's easy to add equities. And you know, if you're an AI company and you're super indexed to uh Nvidia and you're using Nvidia products, like are you more likely to want to hold some of your treasury in Nvidia? I think that's going to be potentially a lot

more possible because all of this is going to be operating in one financial platform where all these pieces just kind of fit together. And so for us, again, the focus is really not just like bring the asset, not just like drive trading on that asset, although of course we want those things. It's about make the asset useful in new ways uh by bringing new use cases and by bringing it to new audiences. >> Let's talk about the specific structures that already exist on DeFi that are a part of this um buildout of this this product out of Coinbase. You mentioned Aerodrome. Is there like a special role that aerodyome has with this particular announcement? I know Bass and Coinbase has worked with Aerodrome plenty in the past. Is there something new here or are you guys just continuing to do the things you always have done in the past

which is simply use Aerodrome for liquidity? >> We're continuing to just kind of deepen the relationship with Aer Drrome. Um they're uh building liquidity for all of these stocks out of the gate. Um they're kind of like a really important liquidity hub on base. Uh and so we're just leaning in there. Um I'm excited to see some of the stuff that they're planning to pioneer around this. you know, when you're building an AMM um and you're doing stocks where you know, the the price um for the most part is going to be uh moving within kind of trading windows where they trade in the biggest volumes in the traditional equities markets. That kind of presents some problems um for okay, now you have this liquidity sitting in AMM. How do you manage that? I think the Airrum team has some really good ideas for how they're

going to make that profitable for LPS. um still liquid and and kind of good uh price execution for consumers who are going into those books. And so um yeah, it's really just about like deepening the relationship with them um helping uh kind of leverage the platform they've built to build, you know, the deepest liquidity around stocks anywhere on chain. >> How does the roll out of this product work? Are you guys simply just going to mint tokens and people buy them? How does how does the how does day one happen? >> Yeah. Yeah. So at the beginning um uh the minting and burning is going to be um kind of like a smaller subset of folks who can do that. So there's kind of folks who are uh able to mint and burn. We're onboarding them uh getting them ready to do that and then they're

providing liquidity into the broader ecosystem and as there's more demand in the ecosystem they're going to be able to bring more liquidity in. I think the the goal over time is to make it so anyone can come in and mint and burn these things. So if you're a consumer and you are transferring your stocks to Coinbase or another brokerage, you can then immediately just tokenize them. uh and that uh you know can tokenize them in your existing centralized exchange account or or it can tokenize them and send them off platform so you can start to do whatever you want with them. I think that that's going to be a huge unlock at the end of the day like giving people that ability to um uh have self- custody and control of their assets uh and do what they want with them instead of being um within the gates of their

existing traditional brokers that's probably pretty limited in terms of what they can actually do. I think that that's going to be this kind of freedom moment for these and that's what we're working towards. >> Is there any role that Coinbase.com or the Coinbase app plays? Like will I be able to buy tokenized stocks? I can already buy stocks on Coinbase. >> Can I buy the tokenized stocks on Coinbase.com and why would I do that >> if I can buy the normal stocks? >> So to to start in the US um uh you know it's just going to continue to be a stocks experience because you know these these stocks are focused on non- US customers. Um, but outside of the US, this is going to be a really powerful tool for opening up new markets for Coinbase. Um, where basically um, it's it's expensive and slow to integrate the

uh, legacy equity system um, into a product, particularly when you're doing that in a bunch of different regions that have different um, uh, kind of service providers uh, regulations around restricting in terms of what you can actually do. And so when you put uh these tokenized versions of stocks on a single platform where Coinbase has kind of best-in-class integration into Bass, um that means that you kind of just start to turn them on in a bunch of different regions. Now you can be like, "Oh, we're turning on stocks in 20 regions and 50 regions and 100 regions. that can kind of grow the top of funnel for Coinbase in terms of how many people they can offer stocks to uh and how good a financial experience they can offer them, but then also can grow the liquidity on base because you have more

and more retail flow that's able to tokenize those assets and trade those assets. And so that's really what we're working towards is, you know, first for Coinbase, but then for any brokerage that wants to um making it so that you can seamlessly tokenize stocks that you have or you can seamlessly offer tokenized stocks to your new customers um who are looking to trade things. And when we're actually out in the market today talking um to customers, I'd say one of the biggest things that we're seeing uh in terms of a shape of customers, there's all of these neo banks that are cropping up around the world. Um where they're using crypto as rails to offer dollar stable coin savings, uh a card that people can spend anywhere. Um, and I think we've historically called those things neo banks, but the transition and

transformation we're starting to see is that they're actually transforming into like Neo brokerages or NEO super financial apps where when you build on crypto rails, it's not just the dollar stable coins and the card you get access to. You also are going to get access to every stock in the world and you're going to get access to be able to trade perpetuals and you're going to get access to be able to do really complicated, you know, covered call sellings or other yield strategies. you're going to be able to borrow against them with a portfolio back loan and you're basically going to have a best-in-class financial product suite that can plug into your neo bank and provide that service to your customers.

And so that's what we want base to be the best at. We want to be that backend so that if you are a financial product, you can integrate one platform and you can get access to every single financial product with best execution at the lowest cost in a way that just delivers better financial experiences to your customers. We've made a huge amount of progress on that over the last three years, but I think the stocks uh unlock around tokenization is really going to be the big next step. >> I do think the NEO brokerage word is going to be the word of the the rest of this year in 2026. Like NEO banks neo banks were already huge >> and now we're just doing it all over again.

>> Yeah. And this is this is what I've I've been hearing is I've been talking to all these neo banks and they're like, "Oh, wow. Um we're so excited to add stocks." Um, and you know, in their experiments with adding stocks thus far, they're seeing that it's monetizing really well for them because now people are trading in their brokerage and they're not just monetizing float, they're actually monetizing trading and it's driving a lot of demand where folks particularly in regions that are are, you know, don't have super deep integrations with the United States financial system, they want to buy US equities. And if you can offer them US equities um at a really low price point um that just goes alongside all the other financial services you're you're offering, that's a huge attractor for new customers coming in on board. And so maybe I just

make a call out if you are a neo bank and you want to become a NEO brokerage, there's no better place to do that than BAS. And you should hit me up on Twitter. I'm Jesse Pollock. We'd love to work with you. We'd love to help you get the best-in-class savings with dollars, spending with a card, uh access to stocks, and every other financial asset. And then I think really importantly access to credit and borrowing and lending so that your customers can take all those assets that they build and get access to cash flexibility from that balance. Uh we find that that whole combination of being able to save, spend, invest, and then borrow is just this huge huge unlock that delivers people so much more economic freedom when they're using a financial product that has all of it. Something you said that I want to drill down into a little

bit more is the complexity that Coinbase has about having to do compliance in all these other jurisdictions. You know, there Brazil has like rules around financial regulation. France, the EU has financial regulation. Coinbase, I'm sure, is still going to do all of those hoops and hurdles because it's worth it. But in addition to that, it seems like there's this new jurisdiction that is forming, which is the tokenized stocks jurisdiction. Yeah. And that might be just as good for the consumers of all of those legal jurisdictions, if not better. And the complexity to Coinbase is so much more simple because a the jurisdiction of tokenized stocks is everywhere. It's

just the whole rest of the world. It's everywhere outside of the US. So in terms of legal complexity, it seems much more manageable and palatable and scalable as an exercise than having to go and do trench warfare of legal compliance after legal compliance after legal compliance in all these different jurisdictions. Yeah. I mean this is the global jurisdiction of crypto which is that we're building a global financial system. Uh and that's what blockchains enabled from the beginning with Bitcoin. Ethereum brought programmability of that financial system so you could build financial products. And now we're basically tokenizing all of the assets and making them available in that financial system. But I think the point that you're making is is spot on which is basically when you are building on that global financial system, it

massively reduces the complexity in terms of what you need to be thinking about as a new product. Um, and that that that doesn't mean you don't need to still think about compliance in all the regions that you're operating on, but particularly from a technology perspective and an underlying uh kind of like infrastructure perspective, you now just have one stack and it's a super simple stack that like you can write to with like a single API to do a trade or to get a you know borrow or lend or you know do a payment and uh that stack is available everywhere globally 247 365 and you can build a product on that financial stack and then at the UI layer, you can say, "Oh, maybe parts of this product don't need I I need to turn them off because it's in the United States or I need to go and talk to the

regulator here and make it." But that compares to the former world where when you want to build a financial product, you were like, "Okay, now I need to go get like a banking rail in this country or a bank account in this country so that I can have a balance that a user can hold in this country and then I need to replicate that like a hundred times." And and the reality is you you couldn't do it. It's impossible. like why do we have so few banks that span more than one jurisdiction? It's because of that because it's so impossible. But I think with crypto, you now have a global decentralized banking rail that you can do anything with. Um and that is just going to be this huge unlock for innovation.

>> Does the nature of the Coinbase tokenized stocks product change in off hours trading? And so at 4:30 or whenever the stock market closes, I don't even know actually uh or the weekend when when the trads are off, does the nature of the product onchain change in any particular way? >> No, the the I mean the product is still the product. It's still going to be a tokenized one to one version of the stock. You know, you're going to have different liquidity dynamics, right? Where when you have really deep liquidity that's, you know, kind of running uh in the kind of US equities trading markets, um you're going to have an easier time doing this mint and burn.

um you're gonna have an easier time kind of setting a price point if you're an institution that's managing that. But I expect that basically we're going to start to see price discovery move onchain um into these stock markets. I I think we're already kind of seeing this um with other venues like Hyperlid um and I expect that that's going to happen on base as well as we build deeper and deeper liquidity and so um yeah the product doesn't change. We're just uh you know building the price ourselves instead of looking to an external reference. So, you're excited for builders to get their hands on the stocks. You're excited for people to build NEO brokerages. What else are you excited to see people build using this uh this new part of the uh tech stack?

>> Yeah, I was I was joking with someone uh that uh like inside me there are two pairings. There's the like people who are going to do like really cool real world asset type products on top of these tokenized stocks. I also think the long-term uh I mean the longtail like meme uh super creative uh kind of just pure onchain possible innovation folks doing things with tokenized stocks. And so I I said this in another podcast the other day which is that I feel like base is a barbell uh in terms of where we're focused right now. On one side, we basically see that we have massive product market fit for trading, financing, uh, which includes earned products and and payments. Um, where basically like every financial business

in the world is starting to realize, oh, we can just plug in this technology and we can let our customers trade more assets at cheaper costs. We can unlock new kinds of financing, borrowing, lending experiences that give them more yield or let them have access to capital. And we can then do global payments that just work on these, you know, stable coin rails that we've built. And that is a huge focus for us where we're basically building a almost like upmarket enterprise sales motion on the base side where it's just like find those customers, work with partners like the Coinbase developer platform and Privy and others to make sure that they have the right package of offerings and then just get them on chain. And then on the other side of the spectrum, we have, you know, the crypto innovators, uh,

which are still here. You know, like one thing I feel like we have bet on and and really been right about with base is that there are builders all around the world who are basically using crypto and base as a a you know, innovation platform where they're building new businesses. A lot of times they're building oneperson businesses that are kind of uniquely newly enabled by AI and then they're using crypto as the rails to innovate new products. And so whether that's folks launching new meme coins that pair with stock tokens that can do kind of cool community building around them or it's folks building NFT projects that distribute stock tokens or it's folks innovating on the borrow and lend and uh yield generation things that we're going to see at the beginning that are probably going to be pretty standard

and then turning in them into you know higher risk but higher reward versions. uh turning them into versions where you can do that in a collective way or you can vouch for other people and get access to more credit. Like that space of builders who are innovating on top of these rails in a longtail way that we can't really anticipate what will come out of it. We're also super excited about and super investing in. And my sense is that you know the the the process that will happen is you'll see continued adoption of the kind of head of that market where you just have big businesses that are integrating these rails to power trading uh financing and payments and then you'll see continued innovation at the longtail where you have the longtail of builders building new kinds of products and then over time

because that big kind of business world has integrated the rails the in the innovation will kind of move upstream. So the things that the longtail builders build that maybe seem a little crazy at the beginning uh and maybe don't have as much distribution at the beginning because we've done a good a bunch of work building distribution through these rails at the the top will make it up there and we'll get more distribution we'll see more growth and we'll lead to more adoption economic freedom and and ultimately like revenue generating for these businesses and the users who use them. One thing about the introduction of this product and really this era for crypto and blockchains is that like now we have the building blocks that we've always wanted to play with like this is what we've talked about like this is

what we've imagined doing. We have highly scalable blockchains. We have tokenized real world assets. They pay dividends. They have governance rights. They're fully permissionless. And now it's really just it's on us. Like there we are the only things in our own way. So our limit is our own imagination. And so I think it's a pretty cool era to be in crypto now. >> It's epic. Yeah. And this is this is something I said to my team today. I said we have all the pieces now. We just have to put them together. Um and like that hasn't always been the case. Like three years ago when we started base that definitely wasn't the case. Like we didn't stable coins were really just starting to mature. We definitely didn't have tokenized stocks. Um you know things were still a little slow and clunky. And now we have incredible

wallet experiences, incredible stable coins, including not just dollar stable coins, but I think Bass has like 25 currencies from around the world now that are available, so you can build localized experiences and do FX onchain. Um, and then we're seeing this whole wave of tokenized assets come that are making it, you know, so we have the whole world's money that we can start to play with. Um, it's a pretty special time. It's a special time to be in crypto. >> Yeah, definitely a special time. I know you just said that you have all the pieces, but what is left blocking you by that the crypto ecosystem needs to like supply like we either need to build it or some something needs to happen. What what what do you wake up and you're like, man, I really wish I had access to this or something. Anything that comes

to mind? >> I mean, I I I am still pretty focused on this whole like how do we get all of the world's currencies on chain? Um I we're up to like 22 23 I think. um you know there's a lot more out there although you get into the longer tale but even in the 22 that we have live there's still a lot more adoption and infrastructure building that we need to do around them you know if you look at the history of dollar stable coins um it took like three or four years for us to kind of get them going from when we started them and a big part of that was basically building all this DeFi infrastructure on top of them so that you could actually do interesting things with your money and with stable coins when you launch a you know Argentina and peso stable coin

or Nigerian naira um you have to build the distribution, but then you also have to do that financial infrastructure build as well. And the cool thing is that because a lot of the financial infrastructure was built for dollars, you can now recind of apply it, but you still have to do the work. And so a lot of what we're doing is basically helping those issuers in all these different countries, kind of get that infrastructure deployed, get liquidity into it, and then find the distributors who are going to um distribute their stable coin and get adoption of it. you know, if you're uh a NEO bank who's trying to expand globally, the really cool thing about having non-dollar stable coins is you can basically offer the equivalent of like a cash balance in any country, but again, it's on one set of rails. Uh so that you don't have to

go have a local bank account there. You can just say, "Hey, when I'm in Nigeria, default the stable coin to the Nigerian Naira." And now every user that comes on board has a localized experience. And not only do they have a localized experience, but one of the big problems you have with neo banks globally is that in order for people to fund their neo banks, um you generally have to use like a crypto on-ramp and they're pretty expensive uh if you're doing dollars. And so maybe you'd pay like 1% or 2% to fund a neo bank. That's like not really uh viable for most consumers. Like what you really want is you want so I can deposit money into this account and it's one to one. And because we now have these local stablecoin issuers in all these countries, those issuers are actually helping provide onetoone

on-ramps into their stable coins. And so now that same neo bank that was offering a customized kind of localized Naira experience in Nigeria also has access to a onetoone Naira on-ramp in that country. So the experience literally can be sign up for this neo bank uh fund your wallet oneto one. So you don't even know it's crypto. you're just getting a new form of digital naira and then plug that into this entire global economy of stocks and dollars and bonds and and literally anything you can imagine but now available to the person who just signed up on the street in Nigeria. I think that is going to be a huge huge unlock for basically bringing on board this next wave of consumers who aren't

going to put up with oh like yes I might want dollars but I don't want my entire life to be denominated dollars and what's that ETH thing like you know like that's confusing to me you know maybe I want to invest in it uh because ETH is money but I'm I don't want to just have to have ETH at the beginning I just want to use Naira or I want to use the Argentinian peso or I want to use whatever currency in whatever country I live in. And so, yeah, I think that's one big one that we're focused on. And I'm proud to say that Bass has the biggest FX markets on chain today. Um, because we've done a lot of work there over the last three years, and we have a lot more work to do. Um, I'd say another one is again, it's a lot of putting

these pieces together. Um, where we now have all the assets and I think we have some of the financial primitives, but I don't think we fully kind of brought them together to make it so this just works. Um, so this is a lot of the work that I'm actually doing right now with the Coinbase teams and uh the the folks uh kind of who are building wallets is like, okay, now that you have dollar stable coins and you have all of the equities, how do we also give you um uh like a portfolio line of credit infrastructure so you can have all of those assets sit in your portfolio and then you can borrow 30% against it or 40% against it and it just works out of the box. like that's a huge kind of um piece of infrastructure that's basically there but helping people do that work of

stitching it together and making it seamless from a consumer experience. Um that's another big focus on us. Uh and then I'd say there's a lot of just going and getting to customers. Um you know we're seeing a ton of demand and adoption on base right now for earn products uh which we really see as an entry point where um you know uh folks who have cash balances uh maybe in dollars or other currencies are coming to us and saying hey we want to help our customers earn you know a little bit more than the base sofur rate um you know like we want to get 4% or 5%. um we can basically say great we have sufficiently liquid markets to deliver that um and it's going to be low risk because these are kind of like instantly liquidating loans and we can make it so

that your customers are earning more yield uh and in a global way anywhere in the world powered by the base economy that's kind of built out this whole financing infrastructure. And so, um, a lot of the selling that we're doing right now is get folks in with earn and then show them, hey, it's not just earning. That's great. You can also borrow and you can also add equities and you can also add all these other currencies and you can do commodities and options and pers and all of those pieces are just going to run on one piece of infrastructure that's super simple for you to build with. And so that kind of landing and expanding and then driving more adoption of crypto is the third big thing that we're focused on.

>> Super comprehensive answer, Jesse. Yeah, there's there there's a lot left to build in this space and I think in that there was there's a call for startups, a call for product which is >> uh uh longtail fiat currency onramps into into crypto. I think it's like >> longale fiat currency issuers in particular um who come build with us on base. And the the cool thing just to connect up the dots is the the the powerful thing about issuing a local currency is just like the dollar stable coin issuers can monetize the float via the yield. If you issue a local currency, you can also monetize the float. And so that means you can give away the on-ramps. And so in the United States, Circle and Coinbase give away the on-ramps. They make it so you can

on-ramp one to one on Coinbase or other platforms because they then monetize the dollar sitting in float. But you don't have that in other countries unless you have that local stable coin. But once you get the local stable coin, you basically unlock this pipeline that you can then say, "Hey, every new financial product that wants to launch in this country, we're going to give you a onetoone on-ramp and that's going to be positive for our business because then we're going to monetize the float." And so I really see this like as kind of infrastructure groundwork that we have to lay if we want to bring the rest of the world on chain because otherwise you just can't get the economics to work for consumers to bring their money into this new environment.

>> Right. Yeah. Incredibly important. Incredibly important. Is this do you see that problem being solved today or is there a lack of builders solving that problem? >> It's you know it's it's um it's slowly but surely being solved. You know, I like I said, I think we have like 22 or 23 currencies. Uh, you know, we're seeing a lot of adoption in eur in Europe, in Brazil, in Nigeria. Um, but it's still small numbers. You know, like I think there's something like $200 million of non-dollar stable coins on on base. Um, uh, you know, we're we're doing volume on that, but it's not massive massive. And so, um, I I'm always looking for more folks to bring more currencies so we can go from 22 to 100. Um and then also for more folks to um build on top of those currencies so

that um yeah like it might not make sense for the biggest lending protocols on chain to go and focus their effort on making the lending markets for Naira in Nigeria work really well on chain but it's going to make sense for someone and if you're a Nigerian builder that's a huge opportunity because I can tell you over the next decade Nigeria will come on chain and it will be denominated in Naira because countries aren't just going to totally seed their sovereign currencies because they're super powerful tools for all the things that they want to do and builders who lean into that and say, "Hey, we're going to make lending for Naira with US stocks huge." Like, that's a huge opportunity.

And then replicate that across Argentina and uh Brazil and Turkey and all of these other markets that are the largest crypto adopter markets in the world, but have only really done it with dollars thus far. I think that there's massive massive opportunity for builders to basically just make their mark and and in making their mark also transform their local economy so that it works better. Uh because when you bring the crypto rails to the local economy, you're going to make it more efficient. You're going to connect it to the rest of the world and the global economy which is going to bring in more capital, going to create more innovation and give more economic freedom to all the people that are part of your country. And so that to me is just like I don't know, it's something I'm very passionate about personally. Um, and I just think there's

so much opportunity for us to really deliver on the at least the mission that I've been working towards, which is increasing economic freedom by helping every country in the world upgrade their own economy using this new technology that we have. Markets don't move one asset at a time. One day it's Bitcoin, the next Nvidia, then gold, and then the S&P. But most traders are still managing their portfolio across different platforms, different accounts, and different pools of capital. Bit just changed that. Their new stocks 2.0 0 product lets you trade tokenized equities directly with USDT all inside the same app you already use for crypto.

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So, let's do it together. Go subscribe to this podcast. Search the DeFi Report wherever you get your podcast, YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you now. >> Yeah. Yeah. There's something about this conversation and the tokenized stocks product and really the NEO brokerage conversation. It's like, oh, this feels this feels like the main quest line of crypto. Like this is always like >> this this is it. This is like this is kind of the the whole entire idea. >> Yeah, we're finally doing it. So, it feels very refreshing and very very exciting. I can feel your energy.

>> Uh Jesse, before I let you go, thanks for coming on and and telling me about uh telling me about Coinbase token socks. Uh there's been like a shift up at Bass uh lately. uh what is your perch these days? What is the domain of Jesse? Like what what are you thinking about? What are you in charge of? What what is your what is your domain at Coinbase these days? >> Yeah, so I you know a founder and leader of the chain. So anything on the chain um I'm leading I'm working with the product and engineering teams that are you know shipping upgrades. We we're on a super fast upgrade cycle now with base and that we're on our own stack. We're we're shipping native account abstraction in the next release. uh you know, stable coin uh payments for gas, a bunch of scaling improvements, better uh

B20 tokens. Um and so that's a big part of it, the go to market, um all the marketing, all the BD, all the sales that we're we're building out. Um and then of course the community, you know, like I'm I'm back on Twitter and you know, helping do everything I can to make it so that from the base trenches to the biggest customers in the world, Bass is the place for builders who are building this financial future. Um and so that's my world. Um the thing that I handed off was the base app. I handed that to Kobe. I think as we um kind of shifted the focus of the base app at the beginning of the year towards trading um and really not just trading on base but trading everywhere uh it became clear that um having me do both of those things wasn't going to lead to uh me

really being able to focus on growing the chain. Uh and we think the opportunity for the chain is to build the blockchain for global finance to to build a global economy that increases innovation, creativity and freedom. And I think I basically got to the point where I was like, "Okay, I want to focus on that." Um, and luckily uh nine months ago, a year ago, I championed uh the the acquisition of Ekko and bringing Kobe into Coinbase um because I saw him as someone who was um not just a leader in crypto, but thinking about capital formation um in in innovative ways. Uh a trader who I think understood other traders in the economy. Um, and having that and having Ekko be a part of our business, uh, I think is just hugely important. And so that led to him coming

in, um, uh, he has now been leading actually the tokenized stocks work. Um, so he's leading that from the Coinbase side. Um, and I think when we were thinking about, okay, the base app focused on trading, where do we where do we uh kind of transition it transitioning it to him so that he could actually lead trading across all of um, Coinbase, across the consumer product, across the base app, and then also in the tokenization uh component, which is really bridging that off-chain world of things like equities and bringing them onto base. Um, and so him and I work every day together. Um, I'm like constantly in his DMs. um he's in mine and we're basically just trying to figure figure out how to like, you know, we're both a little bit renegade in our own ways. He's a different kind of

renegade than me, but we're like, how do we bring that renegade energy uh to this this massive company to make it so that it um is is the place where people are, you know, building their financial futures on the consumer side, where they're um adopting these new technologies from a developer platform side and Coinbase developer platform, and then of course where the underlying economy is actually running um from a base side. So, super fun to get to work with him on that. What about the the technical road map of the base chain and also the technical road map as it relates to of the Ethereum layer 1 and the whole like blob space arc? Is there anything left to talk about there or does is does that quest line feel somewhat like finished like in a solid place, solid equilibrium and you can

think about things higher up the tech stack? >> Uh I mean I feel like the blob stuff is is just kind of cranking away like we I there's more scaling headroom that we can increase on Ethereum. We're a happy Ethereum customer um paying for blob space every single day. Um we we would love more blob space. I think our demand is is growing and I think Ethereum will want to meet that so that we can pay more. Um and I'm sure there's going to be tweaks that we can do to make it so that that market works more effectively alongside all the other different uh pieces of market that Ethereum is offering. Um but yeah, I think that that's cooking and we're going to keep leaning in with Ethereum to grow it. In terms of the technology stack for Bass, it's really about like how do we make

Bass the best place for finance. And when you look at that, it's trading, uh, it's financing, it's payments. And I think we're seeing in in the market that there's actually, um, more work that we can do to make it so that Bass is um, better serving those use cases. And if you think about Ethereum, you know, I was I was like, you know, I think a Vitalic tweet the other day or, you know, maybe a couple months ago where he was like, you know, Ethereum isn't just for trading. base is for trading. Like, let me be 100% clear. Like, if you're building trading use cases, we want you to build them on base. Um, because it's going to be fast, it's gonna be cheap, and we're going to give you the best special purpose infrastructure that makes it so that you can tokenize assets better than

anywhere else. And so, you can trade assets better than anywhere else. And the same thing is going to be true for financing because we think trading and financing are deeply interlin. And then also payments because at the end of the day we think that trading, payments, and finance are all part of this vision of building the everything exchange where you're not just talking about trading assets, but you're talking about exchanging value. And that value can be in the form of trading an equity or it can be in the form of doing a payment for goods and service or it can be in the form of getting a loan or giving credit to someone else. But that exchange of value, that is one of the most important and oldest human things that we do all the way back from marketplaces that we used to like walk

to when we're, you know, thousands of years ago. But now we have a global marketplace that's running on a world computer that is going to make it so that every single time we exchange value, it's happening in the most efficient, the the the the highest leverage and and the way that delivers the most value back to the people who are actually bringing the value to the table. And so when we're focusing on the roadmap for Bass, that's what we're focused on. We're focused on how do we make base a better exchange that can enable better trading, better payments, better financing, and bring all this together to make a more global economy that increases innovation, creativity, and freedom. And and we love Ethereum, and we're so glad that Ethereum is complimentary to us in doing different

things. We think it's good that Ethereum is saying, "Hey, we're going to be the world computer. Maybe trading isn't our highest priority." Because that means, okay, great. Base is going to complement that. we can be the exchange of Ethereum. Uh we can be the exchange of the world with Ethereum a part of it. And I think um that kind of difference has been cool to get to uh flesh out and start to more formalize over the last 6 to9 months as we've taken a little bit more control of our own roadmap and really started investing in the core underlying technology innovation that could lead to that better exchange offering. >> One last question before I let you go.

Will Coinbase tokenized stocks, are you guys going to try and push those down into the Ethereum layer 1 or are you just going to that's just going to be an organic phenomenon or is that going to be like an active effort to try and claim real estate for tokenized stocks on the Ethereum layer 1? >> I think that Coinbase is going to bring tokenized stocks to more places than just base. Um, uh, you know, I I can't speak on specific timelines or other networks, but I think the the goal with Coinbase has always been to be like the platform that works across all of that with base sitting at the middle serving as kind of a hub, but ultimately connecting in all of different chains.

Um, and so yeah, I think that they're going to keep expanding that offering. >> Cool. Jesse, thanks for coming on the show today. >> Yeah, thanks for having me. >> Bank, you guys know the deal. Crypto is risky, but that is why we are here. The institutions have landed, so we are going even further west. This is the frontier. It's not for everyone, but we are glad you're with us on the bankless journey. Thanks a lot.