Jesse Pollak: Base – The Optimistic Gateway to Crypto Adoption #485

Transcript

welcome to epicenter the show which talks about the Technologies projects and people driving decentralization and the blockchain revolution uh I'm Brian Crain and I'm today here with Frederica Ernst and we're going to speak with Jesse Pollock he is the head of protocols and the base contributor number one base being the new uh roll-up based on optimism that coinbase is launching uh so we're really excited to have him on and just before we get started I would like to tell you about our sponsor this week so our sponsor this week is Omni which is a fantastic multi-chain Mobile Wallet they support 25 protocols that you can so you can manage all your assets in one place and what's really

cool about Omni is what you can do inside the wallet if you want to get yield then they allow you to get the best API apy fees in in a few tabs if you want to swap then they aggregate Bridges and decks so you can do that from in there uh if you like nfts they also have really broad nft support so you can collect and manage your nfts across chains in one place so it's really the easiest way to use web3 is fully self-custodial that means you don't have to trust anyone with your assets except yourself and it also has Ledger support so give it a try at omni.app so with that Jesse thanks so much for being on the show thanks for having me y'all I love

epicenter long time listener huge fan yeah I know I like what you said before that you've like probably listened to like all the episodes that's pretty amazing I think there's a lot of people who've done that I've been listening for like four years five years however long it's been going we should give out nfts for people who've actually listened to at least like 95 of the episodes because I don't think there's are that many of those it's almost it's almost 500 episodes so it's a lot it's a lot of episodes I run three or four times a week and if there's a new episode uh epicenter episode I listen to it cool cool now we're gonna have this be a whole quiz about my knowledge about

epicenter I don't know we will just trust you so yeah let's get started I mean maybe before we get into base are wondering if you can talk a little bit about this role of like head of protocols like how did that come about and like what what is sort of your Robin within cone base yeah um I've been at coinbase for six years at this point about oh I guess I'm about to hit my six year anniversary um I joined at the beginning of 2017 after having started a company that worked with crypto companies uh back in 2013.

um and for the first four and a half years at coinbase I supported all the teams that built our consumer facing products on the engineering side So coinbase coinbase Pro coinbase wallet I joined when those teams were really small you know a handful of people and then helped grow them to a couple hundred people and then in the middle of 2021 I took a step back from that role and stepped into a new role at coinbase which is the role I'm in today which didn't have a name at first and kind of had a singular Mission it was me in a really small group of people and our mission was basically figure out how do we bring coinbase on chain as a business now what does that actually mean if you think about coinbase it was started in

2012 uh at the time you could just buy Bitcoin there were no smart contracts there was no kind of on-chain economy uh eventually we added the support for buying ethereum Litecoin a bunch of other assets um and then really in the last few years with things like usdc and coinbase wallet and CBE we've started to have more what I would call natively on chain products which are products that are written in smart contracts or interact directly with smart contracts and give our our users uh whether they're individuals or businesses or developers access to the kind of the full power of this platform that's emerging um but those products are still a very small percentage of our overall business the vast majority of you know the users the activity the assets are still in

custodial centralized systems and so for the last you know almost two years I've been working inside uh you know this I think 3 500 person uh Fortune 500 public company trying to figure out how do we change that how do we go from having 90 off 10 10 on chain to having 100 on chain over the next few years and that's been a Wandering Journey a lot of learnings a lot of failures um and out the other side of that came base which we think is going to be a really powerful platform both for coinbase but also for the broader world to come on to the on-chain platform and start building really useful things that billions of users want to use so coinbase is uh

famously a publicly listed company which means you have fiduciary duties to your shareholders right so what's the high level business case behind uh introducing base and bringing coinbase on chain because basically kind of just justifying that with ideology isn't enough for shareholders right you have to you have to have a business case yeah yeah and if you look at what coinbase what what's made coinbase's business over the last 10 years I think what you'll see is that um we've made money by making it easy for users to interact with and access

crypto and for the longest time the thing that users have wanted to do in crypto is trade they want to speculate and so we've made money by making it really easy for them to buy crypto sell crypto hold crypto do that in a secure way that's trusted with easy interface but I think from the beginning and you know this is pretty well laid out and Brian or Armstrong our CEO's secret master plan for coinbase which you wrote in 2016. the vision for coinbase is to bring about an open crypto economy where there are millions of daps that billions of people are using that are not just trading not just speculative but are actually things people have to use on the day-to-day life to go about the

things they care about and I think our thesis is that if we can accelerate the number and quality of those applications then there will be um tons of opportunity for coinbase to continue building easy to use interfaces that are trusted for our users to use those applications and um we'll be able to make money off of that because users will be able to continue you know users will be excited about paying for the privilege we're paying for the access that coinmates will provide as kind of a gateway to web3 or gateway to the on-chain economy and we're you know we're already starting to see this you know for instance in coinbase wallet um we we have a swap function there that works a lot like the the swap function

or trade functioning coinbase.com but it's powered by decentralized protocols it's powered by u0x and uniswab um but coinbase can still charge a fee because it's really easy users can also go into the browser and interact with unit Swap and not pay the key if they want but lots of people decide to pay the fee because it's easy for them and I think our thesis is the more of those applications the more growth for the business the more things for users to do the more users who are gonna be coming on chain and and all of that will be good for a coinbase and business long term so it's kind of like an app store business model exactly yeah it's an app store business model but I think the thing we're excited about is it feels like it could be an app store but it's not going to be

a coercive App Store where everyone's locked in and you have to you know build in a certain way or you have to you know pay certain fees um because we're building on these open platforms you know things like evm things like the op stack um it's going to be easier and easier for developers to opt in to to being on base and being in the coinbase products and it's gonna be easy for users to opt into using base but if people say hey we don't want to be here hey we want to go use applications elsewhere I think our goal and and thesis is awesome like that's what it's all about that's what the open crypto economy is about it's about having Choice um and we're going to continue supporting users to go elsewhere and

then we're going to let the coinbase products win on their merits by making them easy to use making them secure making the things that people want to use because it makes their life better I'm still not totally following sort of the the rationale behind base I mean I guess one thing you're saying seems to be like hey we need to have more you know dabs more stuff and then that's good for crypto and of course like that I understand that but I mean if it's just about building gaps and you feel like oh coinbase needs to have a role in building mode app so that you get more usage then I mean there's lots of like chains or related to the Roll-Ups that are coming

where you could put those on so what what's the case like why build your own roll up yeah and this is something we we thought a lot about um and uh in the beginning of 2022 the way this really started was we were working with our internal teams at coinbase trying to understand what was holding them back from building dabs from building on chain and basically what we saw was teams were struggling with how do we build on chain I.E like are we writing solid an evm contracts are we writing rust and Solana contracts are we writing you know app chains and Cosmos and then most people were kind of by default picking evm because that was you know the most popular thing but then they were getting stuck with where do we

build on chain um you know do we do we put it on L1 I don't know it's too expensive do we put on L2 we're not quite sure where on L2 and so first half of last year um we aligned as a business to evm as a kind of primary development platform that's what we saw the most growth the most kind of uh Network effects from a developer perspective ethereum L1 is kind of the place we wanted to put high value applications and then L2 is this place where we could start to deploy like large-scale consumer applications things that would reach millions of users but even then I think with that Clarity we still have the question of like where in L2 and so in the second half of last year we went and talked with all the L2 teams

we're kind of like Blown Away by the level of creativity and Innovation that was happening in the space and I think as we went through that process we had a really like big change in perspective about what L2 was going to look like from an architecture perspective I think we started with the thesis of there's gonna be one L2 it's going to be monolithic and like coinbase kind of has to pick the right one and like that's the most important decision for us to make and then I think by the time we went through that process we ended with this vision of much more there's actually many of these things they're going to kind of run in parallel they're going to gradually standardize and interoperate and work together to scale ethereum and I think in that context like the yl2 why should we build no two question

became more obvious it was like we should build now too because we want to contribute to that mesh or super chain we want to help scale ethereum we want to invest our resources in the platform we want to give our teams and people who um want to be building for our customers an easy like default way to do that um and we can do all of that without being a silo without being an alternative kind of like you know ecosystem being an island but instead being deeply interconnected to what right now is the largest crypto ecosystem in the world and then with a clear strategy and plan for how we can make sure that we like have even more interoperability between all the other people who are working there and so I think that kind of like having The Best of Both Worlds of like creating the

platform we're coinbase from a developer perspective could really start to like make that transition have The Surety from a business perspective to invest in it while also being deeply interconnected was the reason like why we chose to do do this I'm thinking to speak much more about that right but you guys are building on like the optimism stack and of course there's like other types of layer twos as well like what in what ways do you see bass differentiating or like you know what what do you what are you trying to do different than other l2s yeah yeah I think you know building on the op stack and so we're obviously going to share a lot of the core technology with other l2s building on the op stack like optimism main net

um and we're joining as a core developer of the op stack uh which means that we're going to be kind of dedicating our resources to making that as scalable as possible as secure as decentralized which I think is going to pull up timelines on a bunch of things we really care about foreign it's about kind of bringing together the kind of holistic uh group of coinbase products to make it easier for developers to build and make it easier for users to use applications um so on the developer side we have a whole kind of developer organization in in coinbase uh and plugging base into that as kind of like this just works out of the box with all of our developer tools is going to be really powerful for

making it so you know someone who's just been writing JavaScript can get started and you know get started with an application and build it in you know 30 minutes instead of 30 days and then on the user side and I think this is the thing that I'm really excited about we have a 110 million verified users something like you know 80 plus billion assets in our ecosystem and like I said at the beginning the vast majority of those are off chain and that's because it's easier right now for those people to hold their Assets in custodial systems I think one of the few things that we have is if we take basically we integrate it into the coinbase products like coinbase and coinbase wallet we're actually gonna make it just as easy for those users to use the applications that people are building as

they can you know use the first party offerings from coinbase today and so what that's going to do and how it's going to differentiate the change it's going to bring all this demand um from kind of real users into the on-chain economy where these you know useful applications are starting to be built and I think connecting up that distribution both through kind of the organic components of it where users are just finding the applications that they want through listings or search which are products we're building into coinbase and coinbase wallet is going to be huge and then also I think one of the things we're going to be able to do is we're going to be able to pull or start to build some of this infrastructure around paid distribution where developers can be like hey we have this great product we know what kind of users

we care about and coinbase can help them find those users and help the users find the product and connect that kind of Market of demand in a way that's a win-win-win for the user for the developer and for the ecosystem because now instead of this user kind of holding their assets off chain they're bringing them on chain and they're starting to be a part of this broader crypto economy um that's bigger than base bigger than coinbase uh and we think is the kind of like platform for you know the whole world coming on chain over the next few years um Jesse you'll have to spell out one thing for me a bit more so basically um having a venue for your own people to kind of build gaps and having a venue to

which you can kind of funnel your 110 million users in principle you didn't need a fresh chain for that or fresh roll up for that right in principle you could have partnered with any L2 or even L1 to kind of make this happen and basically you know you could have contributed to the to the technology technology effort and so on it is how much is um kind of this starting from a blank slate um a regulatory um a question in in and in how much is that a business um decision because kind of it lets you gatekeep in in some shape or form

I think it's I think it's um in first I we're not starting from a blank blank slate and that was really important to us we didn't want to go out and build our own technology that's why we're working on the op stack it's why we're building as an ethereum L2 it's why we're you know contributing to and building on top of these open source public goods um but I think in terms of like why it is a business reason but it's not about gatekeeping it's more that there's a ton of a ton of value in us having our own on-chain home um and here's an example of this right for the last year coinbase has been investing in eip4844 which is an upgrade to ethereum that's going to lower the cost of all roll ups by 10x um we've put a few Engineers on that and

we've brought up the timelines on that being live from like what was previously undefined sometime 2024 uh now to Summer 2023. that kind of investment is now like totally makes sense for our business um because we now have a clear rationale like we have this home we know that we need to make it more scalable because it's too expensive for our users like let's figure out what the underlying infrastructure is that we need to build in order to invest in that and I think there's a bunch of things that are kind of like that across the whole company where before we had basically uncertainty around like okay we have this application where do we put it is here better than there is this going to work with all of our products and now

we've created certainty and Surety and we say oh no we have the home we can invest in the infrastructure you can build the application it will work by default like all of these pieces start to work together in a way that is much more powerful than any of them individually and so I feel like one of the big drivers for us on this um from a business perspective was like the shelling point of the chain where it's like now we have the reason to do all these things on chain and we have the place where we can feel confident that if we do them here they'll work for us and they'll fit into again this broader map their super chain of other l2s of other l1s of ethereum um so we're not just off on our own but we're

actually connecting people into the broader economy okay I I I do want to sort of clarify a little bit or you know expand a little bit on the question that friedriche asked which is around you know to what extent is there some kind of permissioning here uh or is it completely you know anyone can deploy like any kind of application on base and uh and you know there's no restriction on bridging no kyc or like are you introducing any kind of you know sort of degrees of control um in bass

yeah so we think about base as a layer two and we think about layer twos as a scaling solution an extension of ethereum and if you look at our track record over the last year and a half I think what you'll see is that coinbase has been a very staunch defender of the permissionlessness of ethereum of the right for users and developers to write and run open source code um uh of the right for people to run validators and to have those validators execute that open source code um you know even on things like tornado cath you know coinbase was uh you know the one I think the first and biggest company to activate around in we're

supporting uh um you know challenge that that's working its way through the court systems around the kind of Open Source nature of this code and whether it's reasonable for treasury to you know put open source code on sanctions list and so I think our plan for base is to extend and build on that permissionlessness um there's obviously a complex path to that we're in the test net right now we've written a lot about our past centralization if you want to read more about you can find it on our blog at base dot mirror.xyz but we're working with optimism to basically figure out how do we decentralize the underlying technology here of the op stack as quickly as possible so that there's no multi-sig controlled by one individual

or entity that can make decisions about the characteristics of the chain the censorship of this chain um there's uh you know forced inclusion rights that are you know upheld at the L1 that even if you have a sequencer that's misbehaving transactions can still be processed um and then we're you know decentralizing the sequencing layer so that more people can be kind of building blocks and submitting those transactions to the to the broader L1 in batches and so it's going to be a journey as we work our way towards Mainland we'll be continuing to communicate about it but we believe in the you know permissionlessness of ethereum we see based as an extension of ethereum and as a scaling Solution on top of ethereum

and you know you see that kind of holding across all the layer twos and that's what we're going to be working to uphold from a decentralization and open perspective over the next few months and years so we're we're I think we're all familiar with kind of the decentralization shortcomings of edge who is I think this is this goes without saying we all know this and I think this is uh it's kind of a dead horse to beat because I mean it's I mean everyone always says look we'll decentralize this and I think techno technologically this is possible and it it will happen but just to clarify as is does base have any other permissioning

systems or settings that set it apart from the standard op deployment no we're running the standard op deployment our goal is to continue upstreaming all of our changes to standard op deployment and work with optimism to release consistently across op mainnet and bass and to have those operate on the same code base cool I think this is what what Brian was kind of trying trying to get at so basically anyone can kind of deploy a dab on base if they choose to do so in principle you can censor them from your interfaces just like an app store doesn't have to show an app

um but you can kind of exclude them from from the from the L2 that's super reassuring too here there's no mechanisms in the op stack code base to do that and um you know we're continuing to contribute to the openstack code base continuing to decentralize the op stack code base I think your your observation around kind of interfaces is exactly right and this is what you see pretty consistently across the board um with these layer twos and l1s as well which is that um if folks are hosting things like Bridges uh or they're hosting things uh yeah I mean like British I think it's a canonical example um there oftentimes are almost always applying some level of judgment around what kind of uh users whether it's based

on IP or addresses they want to let use those interfaces um but then they're fighting to protect the permissionlessness of the underlying Network the smart contracts the nodes that's what optimism has done consistently and um that's what our our plan is to do as well we want to be building with optimism building towards the centralization and treating Layer Two as an extension of ethereum that protects the right for developers and users to run open source code just like people have been running code on other systems for a long time and just like the internet remains an open protocol that anyone can build on we see ethereum kind of upholding the same standards as as a centralized exchange um you have certain requirements you

know from The Regulators as to kind of funds and users you can onboard so where exactly do you draw the line between the user and the non-user of coinbase if people kind of move around on base uh those people automatically kind of users of coinbase or can coinbase users automatic I mean can can they just move around base freely and how do you deal with kind of funds that you may not be able to kind of onboard onto coinbase proper but that have kind of come in contact or have come to belong to uh coinbase users on base it to me it seems like

um really difficult terrain to step in definitely very difficult terrain to step in you know I think coinbase is at the Vanguard of trying to figure out what is the where where are the lines and you know there's not going to be clear lines on any of this stuff like the the ways where the the laws that we're working with are um old and you know I think our our position has been pretty consistently like it's time to create new laws um that uh create regulatory certainty for developers uh create protections for users uh but also support Innovation I think to your question um in particular around like kind of what's the difference between the centralized part of the business and the exchange and the kind of more decentralized software parts to business

um you know this is something that we've actually been dealing with for a long time you know if you look at coinbase.com and uh the coinbase mobile app those things are different than coinbase wallet right coinbase.com and the coinbase mobile app you know when you sign up you create an account with username and password you give us your verified information uh we confirm that information we do the kyc checks um we report on all of that uh you know within kind of the the guidelines that we work with uh from regulatory perspective and different jurisdictions um that's obviously been hugely successful for many users um and it's different than coinbase wallet if you download coinbase wallet today you can download coinbase while

anywhere in the world you can use the software of coinbase wallet to generate a private key that is yours that you then use to interact with any application that's deployed on ethereum another Network too um and coinbase in that uh context is really providing software to let users manage their own information their own data their own private keys and transact with again this open source software that's running on ethereum as kind of a base layer and our stance on that has been again people can should run software and that they should have rights protected around that I mean we're going to support them in doing

that and so I think that's going to be the same you know uh regulatory gray area or you know lack of clarity uh that we're navigating with base um and again our goal is to build on and extend the kind of foundation that ethereum has built uh and see and treat Layer Two as an extension of that uh and make sure that we're kind of upholding those values because we think that that's decentralization that openness that's what enables us to build a global crypto economy that's what's going to enable us to bring a billion people billion people on chain and increase economic freedom everywhere cool no I really appreciate uh you know

the clear answer and and I also the stands right I think that's really amazing that like you know coinbase is really building something you know fully open permissionless and yeah so I think that's that's very cool one thing I'm curious about of course uh an exchange or you know primarily any change building like uh some kind of chain is is not a new thing right I guess most known is like binance right it has like the binance chain uh that I think kind of failed right but then binance smart chain which has been pretty successful what are are there some things that you learned or some things where you're like okay this these are things we really

want to do differently compared to how binance has approached it yeah great question and it just says like context and historical data point we've actually looked at building a chain twice before um and we decided not to in 2018 and 2020 and the reason why we decided not to build a chain in those times is we didn't think that we could launch a chain that would live up to our values and beliefs about the crypto economy and in particular we didn't want to launch something that would put our users on an island um or Silo them or make them be disconnected from all the other Innovation that's happening and that they're using coinbase products to access and I think the thing that shifted now

is we feel like we can we feel like we can have both we can both create the home for us on chain and be deeply interconnected to the broader crypto economy um and I think as we look at you know other chains like Finance smart chain um that's probably the key difference in our philosophy and the approach that we're taking here when I look at binance smart chain the thing that that gets me really excited and something that I think we've learned a lot from is the combination of having interfaces that people use consumers real consumers use combined with a chain infrastructure that people can build applications on it's super powerful if you look at the activity that's happening on buy and smart chain it is mostly small scale retail users doing small transactions

whether it sends and receives of tether um or swaps of you know like ten dollars um uh it's every it's everyday people um actually using the chain and that's because they have interfaces that enable them to use the chain and that's why buy and smart chain has I think 10 million monthly transacting addresses which is five times bigger than ethereum and 10 times bigger than the next L2 and that's I think that's incredible it's an incredible illustration of how if you stop just forcing users to do things like pick the infrastructure that they want to run their apps on and instead just give them products and applications that they actually care about they're going to use it and that can drive real adoption of crypto now I

think our approach is like let's take that learning and then let's figure out how to do it in a way where we're not off to the side we're not creating our own siled ecosystem but instead we are using bass almost as a bridge and the value that we repeat over and over again is a bridge not an island which basically means that we think about base as the way that users are going to come from off chain to on chain and then the way that we're going to enable users to go everywhere else and we're going to do that by continuing to Sport All These Chains across our product uh other l2s ethereum other L1 ecosystems we're going to do that by building really deep interoperability between base and ethereum between bass and other l2s

between bass and other L1 you can systems like Cosmos like gnosis like uh Solana um and I think are these like we're at Day Zero in this story there's still a small millions of real human beings who are transacting on chain every day and we need to get that to a few billion transacting every day and in that it's going to take all kinds of innovation it's going to take a diversity of different solutions and we want to be bringing people in accelerating the growth of the broader crypto economy having base obviously play an important role in it but letting users and developers fuse where they want to be building in a way that kind of lives up to the best values of crypto and the

openness and the interoperability that we we see making crypto such a special place I totally subscribed to that ethos but don't you know don't dismiss binance smart chain too quickly because what they what they're actually able to do is they do a lot of yeah you you never thought you'd hear that from me right but um I think Brian Smart is incredible I think that they've driven the most consumer adoption in the world of crypto right now and I mean the way that they're doing it is uh they're just able to do a massive amount of transactions per second by you know by virtue of being pretty you know centralized but I mean same can be said for for you know

the the op stack but I know the roadmap and so on but um the numbers of transactions that um you can do on an optimism Roll Up is nowhere near the number of transactions you can do on binance matching right so basically if you have like 110 million users on coinbase how are they all going to fit onto your uh roll up yeah I mean I think across the board we have a lot of scaling challenges I I I I challenge that buying smart chain has some you know like meaningful uh lead on other l2s or even other L ones like like gnosis I mean buying smart chain is running on gas and uh Aragon yeah you

know those are the same clients that were using Corona theory on the same clients were using to run these layer twos uh and they've tweaked the gas limits a little bit so they have higher gas limits which you know has the the downside of you know bloating data much faster but the upside of creating a little bit more or significantly more throughput but I I I don't think that there's like uh meaningful technological advantage that Finance smart chain has over other l2s and in fact I think I think what is more likely to happen is um you know almost like the tortoise versus the hair right if you look at Layer Two on ethereum there's actually a pretty clear path to driving down costs instantly because the biggest source of cost is L1 ethereum data availability

and we're running this roadmap around 4844 prototank starting that's going to create a new kind of data availability on ethereum that's gonna be much cheaper to use and then we can grow that capacity over time to continue driving down costs um that's not the same situation for binance smart chain like if they want to solve the like how do we continue putting so many transactions through uh by and smart chain but then manage with State growth they're gonna have to figure out how to do that at the L1 context um which is a hard engineering problem um and that's kind of why ethereum has decided to pursue this role of centric scaling roadmap where you separate the concerns you do data availability at L1 and then you push the execution down

down too and so I mean I think I think time will tell but today binance smart chain is more expensive than other all twos maybe it has more throughput but the costs are higher and I think from a long-term perspective uh I at least feel a lot a lot more confident in the scaling roadmap that um folks like ethereum and gnosis are running with 4844 uh around providing data availability to tell tools I I hear that to me the question is so basically invariably with an L2 your transaction costs um are going to be um correlated with or I mean proportional to the L1 fees right so

basically that there's there's only so much um you can ultimately settle to ethereum right so basically I mean even if you I mean and we are now even talking about layer 3 is because basically layer twos are getting too expensive for many things I've recently spoke with um Jody um from from polygon um this is actually this interview is coming out after years so I I can't I basically no one will know this um but uh basically their plan is to kind of have like this system of chains and depending on what you're actually um requirements in terms of transaction costs and uh uh and security guarantees

are they will recommend you um a different chain so basically they will send you to uh a polygons UK evm or polygon poms or uh you know any of the other ZKA chains they're currently incubating do you think Bayes can kind of somehow toe the line uh between you know between kind of excluding people on economic grounds in terms of transaction costs excluding depths or how I how are you thinking about that yeah good question and and first the first thing I'll I'll clarify is I think actually that width 4844 which is Proto dank sharding one of the really powerful

things that's going to happen is we're going to now start to have two separate fee markets for L1 so we'll have the fee market for like transactions on L1 that are doing execution like a swap or a nft man or whatever and that will continue to have the kind of like Market driven demand based on events like there's a big men you're gonna see more Spike you're going to see higher gas costs but then we're going to have this other market for blob space which is just the data availability market and that market isn't going to have the same kind of demand based uh Cur or uh as intense demand curves because the primary use cases is going to be l2s that are consistently publishing data and so I think one of the things that we're actually going to see is we're going to

see a Divergence of the L2 cost from having that direct correlation to the L1 execution costs and instead what we'll see is over time we'll actually be able to drive down on the L2 cost because we're gonna be able to create more um data availability through prototank sharding and then full dank sharding that I think eventually should be basically infinite if we can solve the technology problems um and that's going to mean we'll be able to continue uh driving down costs so I think that's that's the first thing is like I do think that there's a path to like lowering costs on l2s uh consistently for the next decade um in a way that will get really cheap fees

um the other thing I'll say is I actually totally agree with jordy's perspective and you know we we've uh talked about this a lot with optimism um we don't think any one chain is going to be the answer crypto is too big we have to bring a billion people on chain and uh not only is that a huge amount of demand but you also have applications that are you know just have really different requirements in terms of how they run and the mental model that I have for this is the mental model of web too if you look at the average kind of developer life cycle of a web 2 business maybe they start on like a shared hosting solution like a Heroku and then that gets too expensive for them or it's too slow and they're like okay now we're

gonna go to AWS and we're going to run our own computers on AWS that are virtualized um and that works really well for them and then they get big enough at some point and they're like wow like it's too expensive for us to be on AWS now we're gonna get our own Data Center and we're going to have our own data center we're going to invest in the hardware we're going to find you and we're going to make it work specifically for our use case I actually think applications in crypto will go through a similar trajectory where they'll start on a shared chain and it will be like oh now we can like get easy access to all liquidity and it'll all just work it's really easy to deploy and then after a certain point they'll be like wow now we're on this chain and we're like

paying all these gas fees and it's not really working perfectly for us and we've scaled we have millions of users what if we would be better served by running our own instance of this stack and having it interoperate with that other chain and still have the same API or interface available to users through the other chain but have our own kind of custom stack that's powering the underlying business logic and I expect that to happen and that's why we're building on the op stack that's why we have this vision of a super chain where what will happen over the next five years is we're basically gonna have thousands millions of chains that have different use cases that serve different kind of applique education developer needs and that all kind of fit together through interoperability so that the

user they aren't having to make choices of like am I running on this one or that one just like you don't make choices around like what's my tier one versus tier two ISP as I'm connected to internet instead they just run the applications that they care about and the kind of abstraction of the super chain however that shapes up to be make sure that that's executed in in the right place and so I I think polygon you know I spent a lot of time with polygon I think their Vision our vision and the cosmos Vision like everything's kind of converging um to this idea that there's gonna be many of these things they're going to interoperate they're going to have different configurations of data availability and that mesh is going to be the thing that enables crypto to grow

to billions of users I think the places where there's difference in differences in perspective are you know what exactly is the technology that we're going to use to coordinate those things where exactly is the data availability going to live um what are the kind of foundational validator sets or uh you know trust networks that secure different parts of the system people have different perspectives there but I actually think from a like architecture perspective we're generally converging yeah absolutely well we have talked we've mentioned quite a bit you know the op stack you guys building on that and on Optima on optimism now of course that's not the only layer 2 technology there is I mean uh arbitrim is of course

the other um roll up that today uh you know is live and has significant traction and then there's a lot of other things coming right with more like based on ZK technology so why did you guys decide to go with the op stack so one note on the op stack and just kind of optimism for optimistic versus ZK Roll-Ups generally is I think don't think about this as like an optimistic or ZK roll-up uh question um I think our thesis is that as these Technologies mature basically what's going to happen is because they're all open source because this is all being done in the open we're gonna be able to bring together the best of all of these

things to upgrade the chains and so as we've been building base and as we've been kind of doubling down the op stack I think the key thing that we've really optimized for is how do we create a modular foundation for this chain so that as the technology matures we can plug in the things that make it better and so an example of this is we're starting with uh optimistic fault prover that's going to be the thing that kind of secures the network but that prover component of the op stack is a module and the second we have a zkevm that's mature enough uh we can add that in either in a multi-prover setup or as a replacement for the optimistic approver

and I think we believe that over the next few years we're basically going to increment until we upgrade this thing so that sometime in 2024 2025 we're gonna have many provers running in parallel that are going to provide more resiliency more redundancy on the system lower finality time between L1 and L2 and make it so no failure in one place you know risks user funds so that kind of mental model of like this isn't optimistic or ZK roll up but instead it's like optimistic and ZK roll up uh and it's like how do we build the system to be upgradable so it can be flexible to those technology improvements I think has been The Guiding kind of North Star Frost as we've been building base in terms of why optimism in the op stack

specifically I'd say there's really four reasons um the first reason is this kind of Technology question it's like you know how did we get to how do we make sure we're building on a sufficiently modular sufficiently strong foundation for what we think will be many many years of iteration in terms of making this chain high quality uh and we feel great about the collaboration with optimism there although the thing I'll also say is we also feel great about all the other incredible work that's happening in the industry you know the work that Arbor drum is doing is totally Cutting Edge uh they've been leading the way on the fault River um scroll in terms of having a ZK UVM that's evm equivalent I think they're really pushing boundaries polygon in terms of just moving quickly uh getting things out the door uh you know huge

inspiration there and I think our goal is to not just work with optimism but to work with all of these teams to figure out how do we bring the best of these Technologies together to scale the crypto economy and make it possible for a million Builders to create the applications that bring a billion users Unchained um but anyways the first one is technology I'd say the second big reason why we're working with optimism is the kind of Licensing and open source approach of the op stack um ethereum is open source freely available that's been the thing that has both driven so much of the Innovation that's happened around ethereum because people could fork and experiment with it and I think been so essential to protecting that permissionlessness and

the openness that we talked about earlier and I think optimism's approach with the open stack is the same and that felt really important to us we wanted to be taking our resources and not putting them into a silo or a thing that was just benefiting coinbase but instead putting them into something that was open source something that was freely available and something that anyone could benefit from whether they wanted to join in with us and build or Fork um so that kind of Open Source ethos was the second reason the third reason was optimism uh work and thinking around funding public goods I don't know how much you guys know but they've been running these retroactive public goods funding rounds I mean in general kind of pushing the boundaries of like how can we make sure that we're getting the money that's created in these systems back to the underlying

infrastructure whether it's core internet infrastructure or ethereum infrastructure like Gaff and nethermine the naragon or the op stack infrastructure and so contributing to that and being a part of it um and supporting those public goods felt really important to us um that's also why we're contributing a portion of the revenue That Base generates from transaction fees back to that retroactive public goods funding mechanism through the optimism Collective so that was the third reason and then the fourth reason was we started working with optimism a little bit more than a year ago on eip4844 uh which again is this upgrade to ethereum that was before we started working on base we didn't know we were going to build an L2 at that time um we were just wanting to scale

ethereum because we felt like scaling ethereum was going to help the industry which is going to help coinbase I think through that context of like working on ethereum together and writing code and writing docs and like collaborating we we built trust we got to know each other we got to feel out each other and be like do we work well together and what I think we saw was like yeah we work well together and this has actually been a consistent pattern that we've seen which is that the shelling point of ethereum from a collaboration perspective of finding people and starting there and being like let's work on ethereum because we know it's going to be good for all of us and then as we do that and as we build that context how do we kind of add on additional collaborations um I think that's been a really powerful

approach that has consistently brought us great people who we love working with yeah that's uh that's super interesting it's funny I've I've actually never heard this uh uh I mean basically building upgradable um infrastructure or protocols this is uh is super difficult because you kind of you have to know where you want to be able to upgrade right you don't want to be able to upgrade everything so how how far have you planned this out to kind of upgrade base into a ZK roller because basically from an engineering perspective um that's that seems incredibly complex

and really difficult to kind of lay out so basically to me it would seem it might it I mean from an engine you know from practical perspective it might even be easier to just redeploy a new roll up uh that's kind of innately ZK you know rather than kind of ensuring that you can upgrade in all the right places so I mean I think there's a lot of hard technology problems to solve here um but I think one of our goals and Theses here is this is a long-term investment it's a long-term project we're going to measure our success on the order of years um just like ethereum has measured its success on the order of years I think

you know we've been inspired by ethereum's ability to um consistently make progress and upgrade itself even as that has been a real challenge you know sometimes it's taking longer than we might want but that uh uh malleability and the ability to evolve I think is has been uh you know very inspiring for us in terms of like the specific technology side you know I think the way we've been building the open stack is to have as much modularity as possible around the proving layer and around the data availability layer because those are the things that feel like uh from our perspective they're the most well defined in terms of places that we will

want to upgrade and evolve data availability right now is obviously going to be ethereum but we want to make it so people can also use the op stack to not run on ethereum whether that's putting their data on other l1s or putting their data in the data availability committee that's going to allow them to run it much faster and have much lower fees so I'd say and then on the proving side we already talked about this you know thinking about optimistic roles versus DK robs so I think those are the two areas that we focus most on from an upgradability perspective um in terms of the exact ZK uh you know path there I think it's I think it's very possible I think one of the things that we definitely feel is like it's the it's not the expertise that we have at coinbase and I also don't think it's the

expertise that optimism has NOP Labs or the optimism Foundation I think this one like that at some in some ways that feels like a risk in some ways it also feels like exciting to us it's like what that means is there's space for more people to be building with us you know there's space for other teams to say hey wow this is a valuable selling point like let's figure out how to make this work um and we're you know we're having some of those conversations today um and I think that there's a very real path to both bringing the technology but also bringing the talent um together to contribute to you know this open source um interoperable freely available toolkit that's starting to kind of shape up to scale ethereum uh and the broader crypto economy

one of the other drawbacks of optimism is kind of the withdrawal period right so basically um I think it's pretty well known that when you kind of want to withdraw something from an optimistic roll up you have like this wait period of one week and for many acids this isn't really that much of that big of a deal because you can have like a liquidity protocol that kind of operates on top of it um but it's a major um usability problem for everything that's non-fungible or illiquid right so basically so if you have an nft or any sort of attestation or social graph or whatever and you want to bring it down from this optimistic roll up onto

another optimistic roll-up or layer one or another layer one um that's you're locked in for a week and anyway how how are you guys thinking about that yeah I think definitely a challenge and you know to your point like for fungible assets this is much less of a challenge because uh uh you know we you can do kind of liquidity bridging across them and coinbase has a product that makes it so anyone can bring assets from autism to ethereum or polygon to ethereum or Arbor strong to ethereum um instantly uh and I think we've seen that that's pretty consistently been like the solution for users and Dave appreciated that on the non-fudible side I think I think you're exactly right we have work to do here

um it's you know one thing that gives me a little bit of Solace is people are used to waiting absurd amounts of times for some of these things in the existing Financial system right if you think about like getting a loan or uh you know getting your identity verified by the DMV like people's uh expectation bar for getting that like final check if they want to move somewhere else um it's pretty low today so I think that that gives us time to solve this as we get there I I think that there are some paths that we can follow like obviously um you know upgrading or incorporating a ZK roll up can lower the finality there um I think that there are things around L2 to L2 uh interoperability that can

get us faster than than kind of the L1 finality uh through shared sequencing and I'm really excited about that and I think the thesis that I generally have is most users sometime in the next little while will start to onboard directly onto L2 and live directly on L2 and they'll they won't actually have that many reasons to go to L1 um unless they're you know large-scale business users who will probably be already on L1 and in that world you know if you're on one L2 great like you know you don't run into that issue if you're on other l2s I think that there's a path for us to get more interoperability there that has lower finality so definitely a hard problem definitely one

that we think needs to get solved in order to you know provide the ideal user experience here but also one that we think we will be able to solve with time cool so um let's talk about the dab developers um who will deploy to base so I assume in the beginning this will mostly be Cross deployments of things that already run on other um chains so how how do you go about not starting on an empty chain right because if if the on the if on day one you kind of open them all uh and say this is our decentralized model everyone go look at it and everything I'm loving there kind

of sucks right yeah yeah exactly so how do you go about kind of creating this day one experience for your currently um centralized users yeah um so one thing I'll note is you know like the natural course of changes you do have some inevitable phasing that has to happen like you have to do genesis then you have to get some infrastructure on there and that supports other infrastructure and that's important for other infrastructure and that supports the product so I expect like we're not gonna on day one have literally everything ready to go because it depends on you know Swap and you know coinbase while the interface for

borrowing depends on off and we need to get all those things sequenced so I expect like there will be a one to three month period where we're going to be doing that bootstrapping in terms of like you know if we think about that as just kind of a given for any chain how do we make sure that at the end of that bootstrapping the mute that base is the Lively exciting place that people want to be um you know one of our values is that base is for everyone and we've tried to embody that as best we could pre-announcement um we're gonna try and embody that as best we can post announcement as well and so I think we went out on last Thursday with something like 70 Builders who committed to be Building on Base that includes basically every kind of

Blue Chip protocol in the space a ton of different infrastructure providers so multiple block explorers multiple node providers multiple data providers multiple NFP data providers and that multiple thing has been really important to us one thing that we really wanted to make sure was that we weren't making everything just client base so it wasn't just like first party first party first party because that felt like it would set everything off on a wrong tone and basis for everyone and that we weren't making it a winner take all or like a king making situation where we were like hand picking someone and you know that person was going to go and kind of take all the value and so for every category our goal was to get at least three people that we

felt like could be kind of a viable option for for Builders and users who are coming on chain and and we achieved that in the opening kind of announcement and the folks who have already committed to building I think post launch we've been I mean it exceeded my wildest expectations in terms of the amount of demand and inbound that we've had over the last five days um has been a fire hose uh we're at East Denver this week um I'm doing this for my hotel room uh and similarly feels like a little bit of a fire hose I think people see the potential um for what we can do if we you know connect up the coinbase distribution connect up the coinbase experiences to the on-chain economy and they want to be

a part of that and so obviously there's a lot of work for us to do in terms of making sure that those folks you know get situated that they have the right tooling that they have the right infrastructure they have the right documentation but I think we're off to a really good start I'm about to go do a workshop with you know a bunch of Builders at eat Denver to help them build on base this week I'm just going to be literally on the ground meaning people connecting with people being as helpful as I possibly can be um and hammering home this value that we have which is that basis for everyone it's an open ecosystem it's not just coinbase it's not coinbase chain um it is based uh and basis for everyone how many of these uh audio Bays belong to us uh jokes are you getting lots yeah

I mean our our first time I can imagine the first tweet that we did was all all your base are belong to you which felt much more like you know we don't own your base you own your base it's for everyone um we actually we we tried to put that in the um Genesis block for the test net but we messed up and so it's not the Genesis block for the test net that was the plan um we'll see if we put it in the Genesis box for the main net we might put something else we're still deciding um yeah I mean one of the things we love about the name base I mean there's two things we love about the name base a lot I mean so many things we love about the name based one is that it's just like spiritually connected to coinbase you

know it's like of coinbase but not coinbase um which feels really meaningful to us two is that obviously it's connected to this meaning of like Foundation um of kind of being this essential part of the broader crypto economy and platform um and then three it is like the most memeable uh meme word ever like the number of based memes and all your all your all your base are Belong To You memes we have a whole meme Channel at coinbase that I haven't yet gotten permission to just share publicly where people are just making base memes um we've tried to build on that Meme ability with the blue dot which we think has worked pretty well um but in general like there's so much great content to be

created in here and we think that that kind of content is the stuff that's going to bring in to Everyday People um to come use bass and that's who we need if we want to get to a billion people Unchained it's going to take a lot of memes absolutely you mentioned mainnet launch uh maybe final question here I mean what is the timeline for minute launch and maybe if there are any other major Milestones that are coming up for base yeah so we're working to get to Main net as quickly and safely as possible um hopefully the next few months one of the things that we uh you know I think benefit from here is like we're not running this chain like this is not the first test net for this chain this is

not for the technology that's powering the chain we're not like off on our own doing this um and so that's going to have us uh let us have a shorter test net period than potentially other things that are coming to Market because we have that resiliency redundancy and the battle testing that's already happened in other ecosystems um I think optimism is currently planning to bring Bedrock which is kind of the relief that we're running on to mainnet in mid late April um and we'll fast follow them um uh so no specific timeline but next few months is what we're aiming for um there's a lot of excitement a lot of anticipation um we're gonna do it as quickly and safely as we can and get base in the hands of Builders so they can start

building and our my goal it's not I haven't set the goal yet but it's uh the framing that I've been working with is a bill a million builders on base in 2023 a billion people on base in 2024. wow okay I like that that's a good that's an audacious goal and uh one of these days it's gonna happen yeah it really does feel like we've been you know like crypto has been kind of like working its way but at a certain point the platform's gonna work you know we're gonna have the right wallets we're gonna have the right identity tools we're gonna have the right uh wallet infrastructure we have the right chain for sure it's gonna be low cost enough

and to me it really feels like this is the year where those pieces are finally like almost ready like they're in sight and we just need to push a little bit harder to get them all to work really well together and that's going to be this Catalyst that will drive the next you know billion people on chain cool well Jesse thanks so much for coming on it's been really a pleasure to speak with you I think you did an excellent job at sort of explaining to us what bass is and and I think one thing also really appreciated you know like emphasizing and sort of you know the values behind that the coin basis values and I think for sure I agree that you know coinbase has been doing you know a very important job right in like trying to like push back a bit

against like all the horrible uh regulatory ideas and Gary Gensler and whatnot is coming uh so I think that's you know really important right and hopefully uh you guys will continue to do that work and advocate for you know free and open decentralized systems and open Financial systems so thanks so much and really excited to see how basically going to develop and how are we gonna how are you gonna fare on these uh these targets that you guys are uh have said well I appreciate your uh having me on decided to help people build on base cool thanks so much Jesse and thanks so much for listeners for tuning in if you want to support the show leave us a review on iTunes or tweet about it share

it on Twitter and yeah we're excited to be back next week