This is epicenter episode 485. If guests Jesse Pollock Welcome to epicenter to show it talks about the Technologies projects and people driving decentralization and the blockchain revolution. I'm Brian train. And I'm today here with Frederick are announced 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 roll up based on optimism that That coin basis launching.
So really excited to have him on and just before we get started I would like to tell you about our sponsor this week. So response to this week is Omni, which is a fantastic, multi-chain, mobile wallets the support 25 protocols that you can. So you can manage all your assets in one place. And what's really cool about omni's, what you can do inside the wallet. If you want to get yield, then they allow you to get the best. A pi AP wife, he's in a few Taps.
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much for being on the show. Thanks for having me all I love epicenter, longtime listener, huge fan. Yeah, I do. I like what you said before that you've liked probably listen to like all the episode that's pretty amazing, and I think you've done that. I've been listening for like four years, five years, however, long it's been going, we should give out NF. T is for people who've actually listened to, at least, like 95% of the episodes because I don't think that has all that many of
those. It's almost it's almost 500 episodes. So, Oh, it's a it's a lot of episode. This thing I run three or four times a week and if there's new episode epicenter episode, I listen to it. Cool, cool. Now we're going to have this be a whole quiz about my knowledge about the center. This is exactly, who knows? Maybe we'll just trust you. So yeah, let's get started.
I mean, Maybe before we get into base, I was 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 is sort of you roll been within cone base Yeah, I better coinbase for six years at this point about it. I guess I'm about to hit my six-year anniversary. I joined at the beginning of 2017. After having started, a company that worked with crypto companies back in 2013. And the first four and a half years at coinbase.
I supported all the teams that build our consumer facing products on the engineering side so coinbase, coinbase Proclaim, his wallet. I joined when those teams were really small, you know, a handful of people and then helped grow them too. 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 and a really small group of people, and our mission was basically figure out. How do we bring coinbase on chain as business? Now, what does that actually mean? If you think about coinbase, it was started in 2012. The time you could just buy Bitcoin there.
Smart contracts, there's no kind of unchain economy. Eventually we had to support for buying etherium like coined a bunch of other assets and then really in the last few years with things like USB C and coinbase wallet and CBE.
We started to have more what I would call natively on chain products which are products that are written as smart contracts or interact directly with smart contracts and give our users, whether they're individuals or businesses or developers access to the kind of the full Power of this platform that's emerging. But those products are still a very small percentage of our overall business. The vast majority of video, 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, you know, this, I think 3500 person Fortune, 500, public company, trying to figure out. How do we change that?
How do we go from having? 90% off chain 10% on chain to having 100% on chain, over the The next few years, and that's been a Wandering Journey, a lot of learning a lot of failures 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 onto the on chain platform and start building, really useful things that
billions of users want to use. So, kind base is famously, a publicly listed company, which means you have fiduciary duties to your shareholders, right? So, what's the high level business case behind introducing base and bringing coin based on Shane because basically kind of just justifying that with ideology isn't enough, left for shareholders. Right, you have to, you have to have a business case. Yeah. Yeah. And if you look at what coinbase, what's made coin basis
business over the last 10 years. I think what you'll see is that we've made money by making it easy for users to interact with an access crypto and for the longest time, the thing that uses 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. So 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.
In Brian Armstrong, our CEOs secret master plan for coinbase, which you run 2016, their 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 tons of opportunity for coinbase to continue building easy-to-use interfaces that are trusted for our users to use those applications and 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 claim mates will provide as kind of a gateway to web.
Ri right gateway to the on chain economy. And we're, you know, we're already starting to see this in, you know, for instance and coinbase wallet, 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, powered by u0x and you know swap but claim based can still charge a fee because it's really easy.
Users can also go into the browser and interact with, you know, Swap and not pay the fee if they want. But lots of people decide to conceive because it's easy for them. And I think our thesis is the more of those applications, the A growth for the business. The more things for users to do, the more users really coming on James and and all of that will be good for a coin basis business long term. So it's kind of like an app store business model. Exactly.
Yeah, it's not 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 course about store where everyone's locked in and you have to you know build the certain way or you have to pay certain fees because Building on these open platforms, you know, things like EDM things like the Opie stack, it's going to be easier and easier for developers to opt into being on based and being in the clinic proxy.
It's me. 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 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, and we're going to continue supporting users to go. Elsewhere.
And then we're going to let the coin based products win on their merits by making them easy to youth, make him 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, as I guess, one thing you're saying seems to be like, okay, we need to have more, you know, daps 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 daps and you feel like, oh, coinbase needs to have a role in building more depth so that you get more usage. Then I mean there's lots of like chains Or related to the Roll-Ups that are coming that you could put those on. So what's the case, like, why build your own roll up? Yeah, this is something we've thought a lot about.
And 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 teens were struggling with how do we build on chain? IE like re-writing solidity VM contracts, are we writing rough since Lana, contracts or rewriting? You know, app chains and Cosmos and then most people were kind
of by default pic. An evm because that was you know, the most popular thing. But then they were getting stuck with where do we build on chain? You know, do we do? We put it on LY, don't know it's too expensive. We put on now to we're not quite sure where on L2. And so first half of last year we aligned as a business to evm as a kind of primary development platform. That's what we saw the most growth and most kind of network effects from a developer perspective.
If they're ml, one is kind of the place we want to put a high value applications and then L 2 is this place. Are we could start to deploy like large-scale consumer applications things I would reach millions of users but even then I think with that Clarity we still have two questions like where and L2 and so in the second half of last year we went and talked with all the all two teams were 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 big change in perspective about what L2 was going to look like from an picture perspective. I think we started with the thesis of there's new 1 L 2. It's going to be monolithic. And I claim these 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 standardized and interoperate and work together to scale the etherium. And I think in that context like the yl2, why should we build? No to question became more obvious. It was like we should build now too, because we want to contribute to that Mash or super chain. We want to help scale etherium. We want to invest our resources
in the platform. We want to give our teams and people who want to be building for our customers and easy. Like, default way to do that. 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 where 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 this. I'm think the speak much more about that, right? But you guys are building on Lucky optimism stack and of course there's like other types of layer choose as well. Like what in what ways do you see base differentiating or like, you know what, what do you what are you trying to do different than other l2's? Yeah. Yeah. I think you know building on the openstack and so we're obviously going to share a lot of the core technology with other l2's
building. On the Opie stack like optimism a net and we're joining as a core developer. Early Opie stack 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. I think, in terms of the place where we think we can, we can really differentiate it's about kind of bringing together, the kind of holistic group of coinbase products to make it easier for developers to build and make it easier for users to use applications.
So on the developer side we have a whole kind of developer organization in coinbase 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, One who's just been writing, JavaScript can get started and, you know, get started with application and build it and 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 110 million verify users, something like, you know, a B+ 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 sets in custodial systems. I think one of these that we have is if we take Basically integrated the Colombians 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 to differentiate the chains, it's going to bring all this demand from kind of real users into Deonte an economy where these new useful applications are starting to be
built. And I think connecting up that distribution both do kind of the Enoch components of it, where users are just finding the applications that they want through listings or search, which our products were building
into Clay, Mason claims. Well, it is gonna be huge and then also, I think one of the things we're gonna be able to do is, we're going to be able to pull or start to build some of this infrastructure around pay distribution where developers can be like, hey, we have this great product.
We know what kind of users we care about and claim based can help them find those users and help the users, find the product and connect that kind of Market of Of demand in a way that's a win-win-win for the user, or the developer, and for the ecosystem because now instead of the 20 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 that's bigger than base.
We're getting coinbase and we think is the kind of like, pop form for, you know, the whole world coming on chain over the next few years. Jesse, you'll have to spell out one thing for me a bit more. So basically having a venue for your own people to kind of build apps and having a venue to which you can kind of fun, a 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 are one 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 has, how much is kind of this starting from a blank slate of regulatory question in an inn in? How much is that the business decision? Because kind of it, lets you gate keep in some shape or form.
I think it's I think it's unfortunate I we're not starting from a blank blank slate, and I 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 Opie stack. That's why we're building, isn't it? Their email to it's why we're contributing to and building on top of these open source public goods?
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. And here's the example. That's right for the last year coin This has been investing EIP 4844 which is an upgrade to a cerium that's going to lower the cost of all Roll-Ups by 10x.
We've put a few Engineers on that and we brought up the timelines on that being live from like what was previously undefined sometime 2024. Now to Summer 2023, that kind of investment is now like totally makes sense for our business because we now have a clear. Rationale would 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 insured 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 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, it'll work for us and they'll fit into again this broader math your super chain of other L2 Use of
other ones of aetherium. So we're not just off on our own but we're actually connecting people into the broader economy. okay, I do want to sort of clarify a little bit, you know, expand a little bit on the question that for uek asked, which is around You know, to what extent is there? Some kind of permission in here? Or is it completely, you know, anyone can deploy like any kind of application on bass and 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 in base. Yeah, so we think about base as a layer 2 and we think about layer twos as a scaling solution, an extension of aetherium. 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 permission list - of aetherium of the right for users and developers to write and run, open source code of the right
for people to run validators. And to have those validators, execute that open source code, you know, even on things like tornado, cath, you know, coinbase was, you know, the one of the, I think, the first and biggest company to activate it around and we're supporting, 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 Not permissionless. Dennis there's obviously a complex path to that we're in the test net right now. We've written a lot about our past to decentralization. If you want to read more about, you can find it on our blog at based on mirror dot x, y z. But we're working with optimism to basically figure out. How do we decentralize the underlying technology here? The Opie stack as quickly as
possible. So that there's no multisig controlled by one individual or entity that can make decisions about the characteristics of the chain. The Censorship of this chain, there's you know, forced inclusion rights that are upheld at the L1 that even if you have a sequencer, that's misbehaving transactions can still be processed and then we're, you know, desensitizing the sequencing layer. So that more people can be kind
of building blocks and summing. Those transactions to the to broader out one in batches and so it's going to be a journey as we work our way towards Main and will be continue to communicate about it, but We believe in the, you know, permissionless of etherium, we see base as an extension of aetherium and as a scaling Solution on top of the theorem.
And, you know, we 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 of the next few months and years. So we're I think we're all familiar with kind of the decentralization shortcomings of l2's. I think this is this goes without saying, we all know this.
And I think this is, it's kind of a dead horse to beat because, I mean, it's, I mean, everyone always says, look, we are decentralized this and I think technical technologically, this is possible, and 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 Opie deployment, we're running the standard Opie deployment.
Our goal is to continue up streaming all of our changes, to the standard Opie deployment and work with optimism, to release, consistently across opium a net and base and to have those operate on the same code base. Could I think this is what what? Brian was kind of trying trying to get it.
So basically, anyone can kind of keep lie adapt 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, but you can't kind of exclude them from from the, from the L2, that's super reassuring to hear. There's no mechanisms and oop stack code base to do that. And You know where continue to contribute to the openstack codebase continuing to decentralized oop stack code
base. I think your observation around kind of interfaces is exactly right and this is what you see. Pretty consistently across the board with these layer twos and now ones as well which is that if folks are hosting things like Bridges or they're hosting things? Yeah, I mean like which I think is a canonical example. There are often times are almost always applying some level
judgment around. What kind of users whether it's based on IP or addresses, they want to let use those interfaces, but then they're fighting to protect the permission of the sness, the underlying Network, smart contracts, the nodes, that's what optimism has done consistently. And that's what our plan is to
do as well. We want to be building with optimism, going towards the centralization and treating layer to, as an extension of etherium, 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 etherium kind of upholding the same standards.
SS centralized exchange, you have certain requirements, you know, from The Regulators, as to kind of funds and users, you can on board. 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? Add those people automatically kind of users of coinbase or can coinbase users automatic? I mean, can they just move around base? Really, and how do you deal with kind of funds that you may not be able to kind of onboard on to
coinbase proper? But that have kind of come in contact or have come to belong to coinbase users on base. It to me, it seems like really difficult terrain to Steppin. 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 are the lines?
And, you know, there's not going to be clear lines on any of this stuff like the ways were the laws that were working with are old and you know I think our position has been pretty consistently like it's time to create new laws that create regulatory certainty for developers create protections for users but also support Innovation.
I think to your Question in particular around, like kind of what's the difference between the centralized part of the business and the exchange and kind of more decentralized software parts to business. 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 the coinbase mobile app, those things are different than coinbase wallet,
right? Coinbase.com and the Clemens mobile app, you know, when you sign up You create an account. Using the password you give us your verified information. We confirm that information, we do the kyc checks, we report on all of that, you know, within kind of the the guidelines that we work with regulatory perspective in different jurisdictions. That's obviously been hugely successful for many users and it's different than Clarice
wallet. If you download coinbase wallet today, you can download climb this wall. Anywhere in the world, you can use the software requirements wallet to generate a Private key. That is yours that you then use to interact with any application that's deployed on the cerium. Another Network to, and coinbase in that context is really providing software to let users
manage their own information. Their own data, their own private, cubes and transact with again this open source software that's running on a theorem, as kind of a base layer and our stance on that has been again. People can enjoy I said, run software and that they should have rights protected around that, and we're going to support them in doing that. And so I think that's going to be the same, you know, regulatory gray area or, you know, lack of clarity that were
navigating with base. And again, our goal is to build on and extend the kind of foundation that aetherium has built and see and treat layer to as an extension of that, and make sure that we're kind of Upholding those values because we think that That's essential ization 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, to people billion people on chain, and increase economic freedom everywhere. Cool know.
I really appreciate you know the clear answer and and that also the stands, right? I think that's really amazing that like, you know, coinbase is really building something, you know, fully open, permission lists and yeah. So I think that's that's very cool. One thing I'm curious about, of course any change or, you know, primarily any change building. Like some kind of chain is not a new thing, right? I guess most known is like, by Nance, right? Like the by nouns chain that?
I think kind of failed, right? But then, by non-smart Chain, which has been pretty successful. What are they are? Some things that you learned or something very like, okay? This, these are things we really want to do differently compared to how bonanzas approached it. Yeah, great question. And just as like context,
historical data point. We've actually looked at building a chain twice before 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 or Silo them or make them be disconnected from all of 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. And I think as we look at, you know, other chains, like Finance more chain. That's probably the key difference in our philosophy and approach that we're taking here.
When I look at my Ants Marching, the thing 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. Structure that people can build
applications on super powerful. If you look at the activity that's happening on buying smart chain, it is mostly small scale, retail users doing small transactions, whether it sends or receives of tether or swaps of, you know, like $10. It's every it's everyday people actually using the chain and that's because they have interfaces that enable them to
use the chain. And that's why by an smart chain has, I think 10 million monthly transacting addresses, which is five times bigger than aetherium? Ten times bigger than the next L2. And that's I think that's incredible. It's 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 adopter 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. Off to the side.
We're not creating our own siloed ecosystem, but instead we are using base, 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 can do that by continuing to support all these chains across our product other l2s if there is
other L1 equal. Sometimes we're going to do that by building really deep interoperability between base and the theorem between base and other altitudes between base and other L1 ecosystems like Cosmos. Like gnosis like Solana. And I think are these like we're at day 0 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 too few billion transacting every day. And in that, it's going to take
all kinds. Kinds of innovation, it's going take a diversity of different solutions and we want to be bringing people in accelerating the growth of the broader kept economy. Having base, obviously, play an important role in it, but letting users and developers to choose 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 see making Crypt of such a special
place. I totally subscribe to that ethos but don't you know, don't dismiss Finance matching 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 for me, right? But I know I love it and I mean the way that they're doing is they're just able to do massive amounts. And of transactions per second by, you know, by virtue of being pretty, you know, centralized. But I mean, same can be said for, you know, the Opie stack.
But I know the roadmap and so on. But the numbers of transactions that you can do on an optimism roll up, it's nowhere near the number of transactions. You can do unbalanced marching right? So basically if you have like a hundred and ten million users on coinbase, how are they all going to fit onto your Or roll up.
Yeah, I really across the board. We have a lot of scaling challenges II challenge that binds Merchant has some, you know, like meaningful lead on other L 20s or even other ones like, like like gnosis, I mean, by Ants Marching is running on death and Aragon, you know, those are the same clients that were using to run a theory on the same clients. We're using to run these layer twos and they've tweaked the gas. It's a little bit.
So they have higher gas tournaments, which you know, has the downside of bloating data much faster but the upside of it creating a little bit more significantly, more throughput, but I don't think that there's, like, meaningful technological advantage that by an smart chain, has over other l2s. And in fact, I think, I think, what is more likely to happen is, you know, almost like the tortoise versus the hare, right? If you look at layer 2 on a cerium, there's actually a
pretty clear path. To driving down costs consistently because the biggest source of costs is L1 aetherium data availability. And we're running this road map around 44 for predicting. That's going to create a new kind of data availability on this area. That's going to be much cheaper to use and then we can grow that capacity over time to continue driving down costs. That's not the same situation for by an smart chain.
Like if they want to solve the like how do we continue putting so many transactions through by Our chain. But then manage with State growth, they're gonna have to figure out how to do that at the L1 context, which is a hard engineering problem. And that's kind of why yeoreum has decided to pursue this roll-up Centric, scaling roadmap where you separate the concerns you do data, availability L1 and then you push the execution down down to.
And so I mean, I think I think time will tell but today, by Nance margin is more expensive than other. All twos maybe has more throughput but But the costs are higher and I think from a long-term perspective I at least feel a lot more confident in the scaling roadmap that folks like if your IAM and gnosis are running with 4844 around providing data availability tell to us.
I hear that to me. The question is so basically invariably with an heir to your transaction costs are going to be correlated with I mean proportional to the anyone fees, right? So basically there's there's only so much you can ultimately settle to aetherium, right? So basically, I mean, even if you I mean, and we are now even talking about layer 3 is because basically layer tools are getting too expensive for me. Things. I recently spoke with Jordi from from polygon.
This is actually this interviews coming out after yours. So I can't. I basically no one will know this. But basically, their plan is to kind of have like this system of chains and depending on what you're actually requirements in terms of transaction costs and and security guarantees are they were I commend you a different chain. So basically, basically they will send you two polygons, UK, evm or polygon p. O Ms. Or, you know, any of the other ZK chains.
They're currently incubating, the do you think Bay's can kind of somehow toe the line between, you know, between kind of excluding people on economic grounds in terms of transaction costs were excluding dad or how are you thinking about that?
Yeah, good question. And in first, the first thing I'll clarify is I think actually that with 4844 which is Proto dang, starting 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 few market for like transactions on L1 that are doing execution, like a swap or NF 2 Min, or whatever. And that will continue to have the kind of like market-driven demand based on events.
Like there's a big Min. You're going to see more Spike. You can see higher gas. It's 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 Kerr, as intense demand curves because the primary use case is going to be l2's that are consistently
publishing data. And so I think one of the things that are 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 cost. And instead what we'll see is over time, whereas To be able to drive down the aisle to cost because we're gonna be able to create more data, availability through Protank charting and then folding starting that, I think eventually should be basically infinite if we can
solve the technology problems. And that's going to mean, we'll be able to continue driving down cause they say that's that's the first thing is like, I do think that there's a pass to like lowering costs on l2's. Consistently for the next decade in a way that will get Really cheap fees. The other thing I'll say is, I actually totally agree with jordi's perspective and you know, we've talked about this a
lot with optimism. We don't think anyone chain is going to be the answer cryptos too big. It's a bring a billion people on chain and 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 Model of web to. If you look at the average kind of developer lifecycle of a web to business, maybe they start on like a shared hosting solution Heroku.
And then, that gets too expensive for them or it's too slow and they're like, okay now we can go to AWS. We're going to run our own computers on AWS that are virtualized 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 going to get our own Data Center and we're going to have our own data. A thinner. We're going to that's in the hardware.
We're going to find you never going to make it work specifically for our use case. I actually think applications and 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 all just work, it's
really easy to deploy. And then after a certain point, they'll be like, wow, now we're in this chain and we're like paying all these Gatsby's. And it's not really working perfectly for us and we've scaled me of millions of users. What if we would be better served by running our own So the stack and having it interoperate with that other chain and still have the same API or interface available to users through other chain, but have our own kind of custom stack.
That's powering the underlying business logic and I expect that to happen. That's why we're building on the
Opie 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 you have thousands millions of chains that have different use cases that serve different kind of application developer needs and that It 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 1 versus tier 2 is p as I'm connecting 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 the right place. And so, I think polygon, you know, spend a lot of time apologized. Their Vision, our vision and the cosmos Vision. Everything's kind of converging to this idea that there's going
to 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 a technology that we're going to use the coordinate? Those things where exactly is the data availability going to
live? What are the kind of Foundational validator sets or you know trusts 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, pisac, you guys building on that and on Optimum On optimism. Now, of course, that's not the only layer to technology is.
I mean, arbitrary term is of course the other roll up that today you know it's life 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 Opie stack? So one note on Dopey stack and just kind of optimism. Very optimistic versus ZK. Roll-Ups generally and I think we don't think about this as like an optimistic or ZK, roll-up question.
I think our thesis is that as these technology is mature, basically, what's gonna 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, Based and as we've been kind of doubling down on the Opie 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 optimistic fault Gruber. That's going to be the thing that kind of secures the network. But that proved ER component of the Opie stack is module and the second we have AZ, K EB M, that's mature enough. We can add that in either in a multi prove or setup or as a replacement for the optimistic Poober.
And I think we believe that over the next few years were basically going to increment to the upgrade this thing. So that sometime in 2024 2025, we're gonna have many provers running in parallel. They're 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 and it's like how do we build the system to be upgradeable so it can be flexible to those technology improvements. I think has been The Guiding kind of North our processes. We've been building base in terms of Y optimism and oop stack. Specifically, I'd say there's really four reasons. 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? Nation for what we think will be many many years. If iteration in terms of making this chain high quality and we feel great about collaboration with optimism there. Other thing also says, we also feel great about all the other incredible work that's happening in the industry. You know, the work that our drums doing is totally Cutting Edge.
They've been leading the way on the Paul Kruger scroll in terms of having the ZK U VM that's UVM equivalent. I think they're really pushing boundaries polygons in terms of just moving quickly. Getting things out the door. 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 on Jane. But anyways, the first ones technology, I did a second. Big reason why we're working with optimism is the kind of Licensing and open source
approach of the OPC. If you re m is open-source freely available, that's been the thing that has both driven so much of the Innovation that's happened around the theorem because people could for can experiment with it and I think been so essential to protecting that permissionless nests and openness that we talked about earlier. And I think optimism's approach with the Opie stack is the same and that felt really important to us.
We want to be taking our resources, not putting them into a silo, or I think that was just-- benefiting coinbase, but instead putting them into something that was open source. Something I was freely available to anyone could benefit from whether they wanted to join in with us and build or Fork. So that kind of open-source ethos was the second reason, the third reason was often isms work and thinking around funding
public goods. I don't know how much you guys know, but they've been running these retroactive public its funding rounds. And 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 its core, internet infrastructure or a theorem in Structure like Gap and not their mind in Oregon or the Opie stack infrastructure.
And so, contributing to that, and being a part of it, and supporting those public goods, felt really important to us.
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 I was the third reason and then the fourth reason was We started working with optimism little bit more than a year ago, on VIP 4844 which again is this upgrade to a theorem that was before we started working on base, we didn't know we were going to build now to it that
time, we were just wanting to scale here again because we felt like scaling a theorem was going to help the industry which is going to help coinbase. I think through that context of like working on a theory, mm together and writing code and writing docs and like collaborating, we build trust. We got to know each other. We got to fill out each other and be like, do we work well together? What I think we saw was like, yeah, we work well together.
And this is actually been a consistent pattern that we've seen. Which is that the shelling point of a cerium from a collaboration perspective of finding people and starting there and being like, let's work on the theorem because we know it's going to be good for all of us. And then as we do that, Now, as we build that context, how do we kind of add on additional collaborations?
I think that's been a really powerful approach that has consistently, brought us great people who we love working with Yeah, that's that's super interesting. It's funny I've actually never had this. I mean basically building upgradable infrastructure protocol is this is is super difficult because you kind of 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 Bays into a z. Okay. Roll up because basically from an engineering perspective that's that seems incredibly complex and really difficult to kind of lay out. So basically, to me it would seem it might, I mean from it and you know, from practical perspective and might even be easier to just redeploy a new roll up, that's kind of innately ZK, you know, rather than kind of ensuring that you can upgrade in all the right places.
I think there's a lot of hard technology problems to solve here. But I think one of our goals and Theses here is this is a long-term investment, a long-term project. We're going to measure our success on the order of beers just like if you're in has measured its success on the order of years and I think, you know, we've been inspired by a theorems ability to consistently make progress and upgrade itself. Even as that has been a real challenge.
You know, something taking longer than we might want, but that At malleability and the ability to evolve, I think it has been very inspiring for us, in terms of like the specific technology side. You know, I think with the way we've been building, the openstack is to have as much modular as possible around the proving layer and around the data availability layer, because those are the things that feel like from our perspective, they're the most.
Well, defined in terms of places that we will want to upgrade. Evolve data availability right now is obviously going to be a
cerium. We want to make it so people can also use the Opie stack to not run on ethereum whether that's putting their data on other L1 or putting their data in the data availability committee, that's gonna allow them to run it. Much faster and have much lower fees, so I'd say and then improving side, really talked about this, you know, thinking about optimistic, rolls-royce's,
you get robbed. So I think those are the two areas that we focus most on From upgradability perspective, in terms of the exact ZK you No 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 a coin basis and I also don't think it's the expertise that optimism has a topi, Labs, optimism foundation, and this one like that at some in some ways that feels like a risk in some ways, it also feels like exciting to us like what that means is there's face for more people to be building with us, you know, there's space for other teams to say hey wow, this is a value.
Both yelling Point like let's figure out how to make this work and we're you know, we're having some of those conversations today and I think that there's a very real path to both bringing the technology but also bring the talent together to contribute to you know there's open source interoperable freely available tool kit that's starting to kind of shape up to scale it cerium and the broader crypto economy. When are the other drawbacks of optimism is kind of the
withdrawal period, right? So basically, 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 weight period of one week and for many assets this isn't really that much of that big of a deal because you can have like a liquidity protocol that kind of upgrades on top of it. But it's a major usability problem for everything that's nonsense. A fungible oral liquid, right?
So basically, so if you have an N ft or any sort of at a station or social graph or whatever and you want to bring it down from this, optimistic roll up onto another optimistic rolled up or layer, one, or another layer one, that's you're locked in for a week. And anyway, how are you guys
thinking about that? Yeah, I'm definitely a challenge and, you know, to your point like for fungible assets, this is much less in the challenge because, 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 aetherium or polygon to aetherium or Arbitron to
etherium instantly. And I think we've seen that that's pretty consistently been like the solution for users and do appreciate that on the non fungible side. I think, I think you're exactly right. We have work to do here. It's, you know, one thing that gives me a little bit of Solace has people are used to waiting absurd amounts of times for some of these things and existing
Financial system. If you think about like getting a loan or you know, getting your identity verified by the DMV like people's expectation bar for getting that like final check if they want to move somewhere else, it's pretty low today. So I think that that gives us time to solve this as we get there. I think there's some paths that we could follow like obviously you know, upgrading or incorporating a ZK, roll-up can
lower the finality there. I think that there are things around L2 L2 interoperability that can get us faster than kind of the L1 finality, through shared sequencing.
I'm really excited about that. I think the thesis, I generally have it. Most users sometime in the next little while, will start to on board directly owned L1, L2 and live directly on L2. And they'll, we will actually have that many reasons to go to L1 unless they're, you know, large-scale business users who will probably be already on L1 and now world, you know, if you're on 1 L 2, great like you know, you don't run size shoe, if you're on other l2's, I think
that there's a path for us to get more interoperability there that Laura finality, so definitely a hard problem definitely one that we think needs to get solved in order to you know, provide the ideal user to experience here. But also one that we think we will be able to solve with time. Who is so M, let's talk about the depth developers who will deploy to base. So I assume in the beginning, this will mostly be Cross deployments of things that
already run on other chains. So how do you go about? Not starting on an empty chain, right? Because if the on the if on day one you kind of all open them. All and say this is our decentralized model everyone. Go look at It it and everything. I'm loving their attacks, right? Yeah, yeah, exactly. So how do you go about kind of creating this day? One experience for your
currently centralized users. Yeah, 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 that supports and other infrastructure and that supports
the product. So I expect like we're not going to on day, one have literally everything ready to go because they depends on, you know, Swap and you know coin made small interface for borrowing. Ends on Ave and we need to get
all those things sequence. So I expect like it will be a one two three month period where we're going to be doing that bootstrapping in terms of like, you know, if we think about that is just kind of a given for any chain, how do we make sure that at the end of that bootstrapping, the mute that basis the Lively exciting place that people want to be, you know, one of our values is that basis for everyone. And we tried to embody that best, we could pre-announcement.
We're going to contract try and embody that as best we can post announcements. As well. And so I think we went out on last Thursday with something like 70, Builders who committed to be Building on Base includes basically every kind of Blue Chip protocol in the space, a ton of different infrastructure. Providers do multiple block explorers multiple node providers, multiple data providers multiple nft 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 climb base. So, it wasn't just like first party, first party, first party, because that's all 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. There 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 Builders, and users who are coming on chain and Achieve that in the opening kind of announcement in the folks who have already committed to building. I think post-launch, we've been exceeded my wildest expectations in terms of the amount of demand and inbound that we've had over the last five days is been a fire hose where you've done for this week.
I'm doing this for my hotel room and similarly feels like a little bit of a fire hose. I think people see the potential for what we can do. If If we, you know, connect up the coinbase distribution connected to 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 to learn that they
have the right infrastructure. They have the right documentation. I think we're off to a really good start. I'm about to go do a workshop with the, you know, a bunch of builders that you've Denver to help them build on bathe 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 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 quite amazed chain, it is base, and base for everyone. How many of these all your base are belong to us? Jokes, are you getting lots? Yeah. You are very first week.
All your base are belong to you, which felt much more like, you know, we don't your base, you on your base, it's for everyone. We actually, we tried to put that in the Genesis block for the test net, but we messed up and so it's not just as black for the test net. That was the plan. We'll see if we put it in the chest and spot for the main. Now, we might put something else or still deciding. Yeah. Maybe one of the things we love
about the name base. I mean there's two things we love about the name base, lat, In so many things about the name. Based, what is that?
It's just like spiritually connected to coinbase, you know, it's like of coinbase but not coinbase, which feels really meaningful to us to, is that obviously, it's connected to this meaning of, like Foundation, of kind of being this essential part of the broader kept economy and platform and then three, it is like the most memorable meme word ever, like the number of based memes and all your, all your, all your Our Belong To You memes.
We have a whole meme Channel acquiring base that I haven't yet, gotten permission to just share publicly. When people are just been baking base memes, we've tried to build on that mutability with the blue dot, which we think has worked pretty well. But in general, like, there's so much great content to be created here and we think that that kind of content is the stuff that's going to bring in everyday people to come use base and that's who we need.
If we want to get to a billion people on chain. It's going to take a lot of memes. Absolutely, you mentioned maenette launched. 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 bass? Yeah. So we're working to get to Maine as quickly and safely as possible. Hopefully next few months, one of the things that we, 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 technologist, powering the chain. We're not like, off on our own doing this, and so that's going to have us.
Let us have a shorter test net period, Then potentially other things that are coming to Market because we have that resiliency and redundancy and the battle testing that's already In other ecosystems, I think optimism is currently planning to bring Bedrock, which is kind of the release that we're running on two main that in mid late, April and will pass follow them. So no specific timeline. But next few months is what we're aiming for. There's a lot of excitement, a
lot of anticipation. We're going to do it as quickly and safely as we can and get based in the hands of builders that they can start building and are my goal. It's not that I haven't set the goal yet but it's the framing that I've been working with is a built 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 I've got one of these days.
It's gonna happen. Yeah, it really does feel like we've been You know like climate crypto has been kind of like working its way past a certain point. The platform is going to work, we're gonna have the right w. We have the right identity tools were gonna have the right wallet infrastructure. We have the right chamber, sir, it's me 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 and change cool. Well, Jesse, thanks so much for coming on is been really a
pleasure to speak with you. I think you did an excellent job at sort of explaining to us what base is and and I think one thing also really appreciated, you know, like emphasizing and sort of, you know, the values behind that and calling 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 regulatory ideas and Gary Gensler. And whatnot is coming.
So I think that's you know really important, right? And hopefully you guys will continue to do that work and advocate for, you know, free and open decentralized systems and open Financial system. So thanks so much and really excited to see how basically develop and how are we going to how you going to fare on these these targets that you guys are have set. Well, I appreciate y'all having me on said, help people build on base.
Cool. Thanks so much Jesse, and thanks so much for listeners for tuning in. You want to support to show, leave us a review on iTunes or tweet about it. Share it on Twitter and we are very excited to be back next week. Thank you for joining us on this week's episode. We release new episodes every week. You can find And subscribe to the show on iTunes Spotify, YouTube SoundCloud or wherever you listen to podcast.
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