Creating the Future of the Internet Onchain | Jesse Pollak

Transcript

and because they they are seeing the impact of having a global onchain economy that increases Innovation creativity and freedom and so me and my teams and coinbase and so many other people in the industry that is what we are working towards and we've been working for a long time like more than a decade at this point but our time has come and the moment is now for all of us to put our heads down to ignore the noise ignore the prices to keep building to stay based and to create the future of the internet onchain the polygon Community grants program was launched with 1 billion toal all four polygon Builders season 1 is live right now and features 35 million in madic to support the next generation of polygon projects builders on polygon these grants are for you join the aggregated future today by

applying at polygon.net on zerox Research is a recommendation to buy or sell Securities or tokens this podcast is for informational purposes only and any views expressed by anyone on the show are solely our opinions not Financial advice pachio Ryan and our guests May hold positions in the company's funds or projects discussed what's up guys welcome back to another episode of ox research uh bachio is out today so you've got me instead filling in as well as nikelle from the blocks research team and we're joined by Jesse Pollock from Bas um Jesse glad to have you on um I guess just to just to kick things off

and um start off the conversation here I want to get into what what really inspired the creation of bass and were there some specific problems or or goals you guys were going after um or trying to solve yeah absolutely so the the creation of Base was kind of a journey um I'd been leading all of the consumer business at coinbase on the engineering side for five years and um after kind of doing that and getting to a certain scale um I I'd always been a founder and I wanted to go and start something new and I kind of had this idea what would it what would it look like if we brought coinbase on chain we have this incredibly powerful new technology platform that's emerging and coinbase is kind of at The Cutting Edge of crypto but it was founded in 2012 back before smart contracts existed um really back

before any of this new onchain world that we're building on today uh was a reality and so you know I think we had this insight as a team of like if we can figure out how to transform coinbase maybe we can then figure out how to kind of transpose that to the world and bring the entire world on chain and so in late 2021 um I started a journey to figure out like what did it mean to bring coinbase on chain we went through a bunch of different ideas all kind of at the like product layer thinking about how do we solve specific problems for end users or businesses um and after going through about a year of exploration and a bunch of trying and failing um we kind of pulled back and said hey every single time we try to build a product on chain we're running

into the same platform problems and this I think was probably like my engineering mindset really like coming through it's like every single time we're talking about how do we make sure that this can scale to the scale of coinbase how do we make sure it works really well with all the coinbase products like how do we make sure we're doing it in a secure way and all of those are um kind of specific platform problems that point to the a lack of good tooling that pointed to a lack of good tooling to build onchain applications at the scale and quality kind of requirements of coinbase and so after a bunch of failing and you know trying on the product side we said hey let's try and solve that platform problem and if we can build a platform that can bring coinbase onchain uh then we can build a platform that could bring

the world La chain and that was the Inception of Bas uh we started in late 2022 um launched internal test net called Bas net um just to kind of like prove it out see if Engineers wanted to build on it um and then sped run uh to a test net in February of 2023 and then it main that in August of 202 uh three and now you know we're about a year later and Bas is the largest L2 in the world if you look at activity um monthly active users monthly active developers um we still have some catching up to do on the total kind of assets on the Chain but you know given that the the other folks are you know three or four years older than us you know that'll happen naturally um and so it's been really cool to see just how quickly I think the

world has um come to base and seen the opportunity here to to to kind of make a bunch of change and positive impact awesome love love all the background um you started mentioning you know limitations as a platform um running into issues launching products and things like that I guess I'm curious if we get into maybe some of the technicals there can you explain the strategy or the thought process that went into raising the gas limits um for the chain yeah absolutely um so we uh had been working kind of even before we realized we wanted to launch base on scaling ethereum because as we looked at what it would take to bring the world on chain we kind of had this idea of oh we need to get transactions down to you know an average cost of below one cent and an

average speed of less than a second that's kind of this point where um everyday people you know aren't going to think about it if it's less than a scent and um it's going to feel instant if it's less than a second and so in early 2022 before we started working on base we we' started contributing and kind of co-leading the effort to bring 4844 to ethereum which was a big uh kind of scalability upgrade um that ultimately took about two years to make happen um so we started working on that with the op Labs team who who built optimism and a bunch of the ethereum core developers um throughout 2022 in uh 2023 we helped lead working groups on that and we did prototypes we did core development um and as we kind of got to 2024 we had line of sight on that shipping and we

weren't really sure what would happen when that shipped I mean at the time the bulk of our costs and the bulk of user costs um were made up in ethereum L1 costs um and we were kind of unsure hey when we drop those costs by creating this new blob space um are we going to uh have a a different uh you know behavior in users is the pricing mechanics going to change like what is it actually going to look like and then it happened March 13th of this year we we switched over to 4844 uh and um pretty immediately we saw a massive amount of induced Demand on base um you know we just saw way more people transacting because transaction fees dropped by more than 10x you know they went from you know High tens of cents to generally Subs scent um and the bulk of

that cost I mean all of that cost reduction was because the L1 cost dropped very precipitously now the the thing that then happened was okay now we reduced the L one cost essentially to zero but the L2 throughput um was still constrained and so we started having more and more transactions and that led to uh kind of us kind of going above our gas Target um which then led to increasing L2 execution costs uh and so that was a shift in kind of where we needed to focus our efforts to scale base we we' done a good job on L1 scaling although there's still a lot more work to do there um and now we needed to shift to focusing the actual kind of like how fast could the chain itself run and there's a bunch of different um kind of uh constraints and

challenges in that one you actually need to make sure that like node software can run fast enough um two you need to make sure that you're you're solving the kind of long-term um uh like State bloat challenge of you know there's just being so much data that you have to manage um three you have to obviously uh keep up with that on L1 to make sure there's actually enough data availability and so at that point we basically just started making the list of here's all the things we need to work through we we we have a full dedicated engineering team that's just focused on protocol scaling um across L1 and L2 um and we we kind of took this mindset of okay we're just going to start incrementally increasing our gas Target as we build confidence that we've been making progress on the performance uh State Management uh

characteristics of the chain and so since you know the middle of March when 4844 happened uh We've Forex the throughput of the chain we've gone from 2.5 megag gas a second to one uh 10 megag gas per second and we've kind of like St planted a flag in the ground on what our Northstar is which is a giga gas per second which is uh a thousand million or thousand megga gas so we have about 100x more to go um and there's a lot of work that we need to do to get there but I think one of the things I feel really grateful for is there's all of these different teams that are working on this um from folks like Paradigm who are pushing it with ref um to you know the GU team who's been doing great work on this for many years uh to

to kind of new entrance like Mega eth and um others who are kind of pushing uh L2 and evbm scalability with par parallelization and so I think the really cool thing that's going to happen over the next year is you're going to have this kind of collective effort um to figure out how do we grow throughput uh and Bas is going to be putting uh kind of all of our resources to help accelerate that as much as possible so we can scale to kind of support the world's needs on chain gotcha now that's really helpful Jesse and uh you know would love to touch on the paralyzation part uh you know just in a second but you mentioned a really great point where like after for EIP 4844 based on this explosion of uh of usage you know I think it's very clear that crypto users

and Traders are very uh you know affected by the cost transact on chain and and Bas was a perfect case study for that but we've seen instances on like polygon even optimism and arbitrum where we see these like higher revert rates or even reorgs when you know increasing the gas limit lowering the cost transact on chain for a variety of reasons it's not purely just because of increasing the gas limit but what we've noticed is that b does not fall into that category we haven't seen those reversions or those reorgs on bass and so I was curious how you know what was bass's strategy in ensuring that you know let's lower the cost to transact on chain but somehow maintain this very consistent user experience has been very clear on Bas so curious on how you guys achieved that

yeah well first off I I think if you compare base to polygon I mean it's just a different technical architecture you know polygon has a very you know it's a proof proof of stake it's an L1 essentially um you know side chain it has some anchoring that happens to ethereum but you know it's running a proof of uh of State consensus and um it it has a bunch of performance characteristics that as you increase the the kind of gas limit or gas Target um it's going to be harder to run that proof of stake Network and I think that's where we've seen um challenges with performance there challenges with lots of reorgs um challenges with error rates and that's been something that's pretty been pretty consistent over the last you know five years of polygon's existence I mean polygon's been an incredible leader in space and super

grateful for all the work that they've done um and you know they built the POS chain before l2s were really a thing but this is why we have an L2 architecture because it lets you make different trade-offs um you know you can bootstrap off of the centralization characteristics of L1 so you don't have to run a full proof of State consensus uh at the L2 that can let you have kind of like a tighter you know in in the case of all l2s today kind of single single sequencer setup um although over time I expect that to change to multi sequencer decentralized sequencer whether that's round robin um or some kind of like tender proof of stake type setup there um uh but you can you can basically constrain how um uh kind of distributed that needs to be because you

have this uh kind of force entry uh kind of bootstrapping off of the L1 decentralization and so I think we've we've really been able to lean into that with Bas and that's been able to um give us uh you know good performance characteristics even as we scaled the the second thing I think this is kind of like Bas versus uh you know maybe other l2s is um first off I'll say like we're not perfect you know we've had issues uh there have been uh failures um you know the first time I went on vacation you know this is before we started raising gas limit it was like immediately there's like 10 minutes of downtime on base like right after onchain summer last year um since then I don't think we've had like a minute of uh kind of a stall of the chain um but I think one of

the things that we have um you know that's a little bit different than other l2s is we have a lot of experience running like production scale infrastructure um and you know my my prior to coinbase I mean prior to base what I was responsible for at coinbase for five years was leading coinbase.com and coin Pro and and the coas wallet product and in from 2017 to 2021 like boy do I have some horror and War stories about what it took to keep coinbase.com up and not keep coinbase.com up because at times coinbase.com went down and we had these really brutal incidents that kept us up all night that we you know we had to kind of learn through um and you know me the C of Base uh this guy Michael um uh

we we were the two people who led that charge for four years and um we helped scale coinbase and and uh I think that gave us so many learnings uh and then coinbase has built so much like kind of infrastructure as a result of that you know for the scale of a big public company and the base team gets to benefit from those learnings we get to benefit from that infrastructure um we get to benefit from kind of that mindset and so just like to give a concrete example of that one of the things that we've been leading um this has gone kind of under the radar for the last couple quarters but we've been leading a whole effort to um really increase the resiliency of the the sequencer um uh so that you know if there were kind of like a a region outage or availability Zone

outage um we could hot swap over in you know seconds to a new redundant sequencer we've been doing that all fully open source it's it's actually a contribution to the core op stack code base um and what that is going to let us do is it's going to let us shift our availability goals from the current four nines of availability or I guess three and a half nines of availability that's what we target like 99.95 um to four and a half five nines of availability and that's really what we're trying to get to is we're trying to get to five nines um which is a very ambitious Target like I forget exactly what the number is let's see if I can uptime that is 9999 I think it's like one minute or two minutes of downtime a year uh it's five minutes of downtime a

year um so very ambitious Target but I think our perspective is like if we're going to build a global economy that's going to support the world like we need five nines of we probably need six nines of availability like we need to be always available that's the kind of guarantee that ethereum's had and that's the same guarantee that base should have and so that's just the mindset that we bring to it I think it's a very serious mindset and it's backed up by a lot of years of experience doing this at scale uh and a lot of kind of resources and infrastructure that's coming from coinbase that's letting us accomplish that but I I'll say like I say all of that and shit's going to happen you know like you know this is this is like at the edge uh you know uh Cutting Edge infrastructure building and we're

scaling the chain more aggressively um then everyone else will of course managing the the decentralization components of that and the the kind of like node runting components of that um but we're going to have failures we're gonna have learnings um and and for me the the key is just like taking those learnings and integrating them into how we work and making them like the systems better and better and better and so we actually have a whole you know retrospective process that we run at base uh you know that comes from you know the the whole culture of coinbase where anytime anything happens um you know we're that that's bad like we're running a retro we're giving it a severity we're taking up action items we're putting those into engineering work like it's getting converted into a bunch of concrete learnings to make sure that whatever happened like never

happens again uh and we kind of seal up that issue uh to make sure that we get more and more resiliency that makes a ton of sense and uh I like that sort of delineation that You' provided earlier between you know the benefits of having an l to is that by by not having this sort of large validator set there's certain benefits that come from that uh that you know we can kind of see with base and makes a ton of sense in terms of you know what sort of differentiates Bas from other l2s that may have higher transaction reversion rates and so uh double clicking on the thing that you had mentioned uh regarding uh implementations and upgrades that you've provided to the op stack for these sort of redundant sequencers was curious if you could elaborate a little bit more on

like uh how are the bass sequencers uh relatively different from other l2s uh to sort of achieve this lower reversion rate of course there's this one part of their being sort of redundant sequencers to keep the you know uptime for base as high as possible uh but you know curious are there any other additional things you could share about the sequencer that may maybe differentiates it from arbitrum or like traditional op stack rollups that achieve this lower version I don't think so I mean not not that I'm aware of right now um I think we have like one of of the things that is different about bass versus other chains I think we have a very different like composition of people who are transacting on bass versus other chains um like for instance I think you have a lot more retail people who are

transacting on base and so when when you look at like failed transaction rate or reversion rate um a lot of that ends up actually being like it's it's not that the chain is doing anything wrong it's that people who are transacting with the chain are doing transactions that are maybe trying to exploit me um or or do some other kind of behavior that it's like you know it's a bot Behavior where they're trying to kind of like do something with the chain uh and I think what what you see on Bas is actually you have just like a lot of regular people who aren't doing that they're just like sending usdc or they're just like doing a meme coin trade like whatever it is and that means that um we have um like a a much higher I think just like success rate um the other place that you see

that and this actually isn't I don't think talked about that much but um uh like and it's mostly a hypothesis right now I wouldn't say I have hard data on it but if you look at the like priority fee on base um uh and you look at the revenue that base is generating um that's generally like it's a lot more than all the other l2s and the the reason my hypothesis why that is um is that sorry uh is that you you again you have a lot of kind of like retail folks who are there um and those folks are executing trades and then um it's all in happening in a private men pool um which means that they're getting kind of best execution um in that private me pool but then that best execution is creating me opportunities in the form of back running um and that's then being uh kind

of capitalized on by uh Searchers who are paying priority fees to capture those kind of back running opportunities I mean that's kind of like a healthy form of me you know it's not something that we think is super problematic um but it does mean that uh kind of like the the overall like Revenue generation for Bas is higher because there's again more like real organic activity versus if you look at I think other block space consumption um in other chains you end up having a lot more like either like highly sophisticated um or programmatic execution um and that is like it's it's highly sophisticated in programmatic you basically have like people pvping each other um uh and that just leads to a very very different characteristic of the block space characteristic of the

revenue Generation Um and characteristic of the the like Hest like the capital markets um you can have a ton of volume but um it doesn't really matter like especially for institutional Traders um like volume isn't the thing that they're looking for the thing that they're looking for is they're looking for opportunities to profit off of kind of like Arbitrage and and other things and that is uh enabled by having a healthy Capital Market with a bunch of different participants and I think if you if you pull back the curtains and you look at the base Capital Market it's far and away the healthiest Capital Market on chain right now because you do have this really or organic mix of everyday people and institutions who are coming together to create kind of like a neutral um like Capital Market where anyone can participate

that makes a lot of sense you know tldr guys base is the real user chain uh so that's that's that's awesome to hear and uh I know you had touched on this earlier you know when we were talking a little bit about raising the gas limit and how you know the it's a sort of multifaceted thing you know discussing the actual like node client that's being run you know with the the work that the Paradigm team is doing with re specifically and then there's State growth condition uh you know considerations here so we love to understand you know what is sort of basis efforts on the paralized evm side because I know there's multiple things to sort of consider like for example a lot of people talk about how paralyzed evm uh implementations are typically like optimistic paralyzed implementations and by the new ethereum pectra update that might make the evm uh

you know more object-oriented which could reduce like re-execution Risk so we love to understand you know how is BAS thinking about uh you know paralyzing the evm and uh how much of that is you know working directly with the Paradigm team with re and I know that you know coinbase likees still you know of course put their own implementations as well so how much is coming internally yeah yeah it's a good question also I just want to say I'm so enjoying this podcast I think this is the most like technical in the weeds podcast I've done since the launch of base and so I think people are gonna find it really interesting and hopefully I'll demonstrate that I'm like I'm not just a person who tweets I actually like understand all the tech to um okay so par parallelization um uh so so first off is we're working really closely with

WTH on this um you know we've we've now been running WTH um uh production um sequencer and uh kind of like node clusters on our test net the Bas ofoia test net for I think a few months um we we've been running ref nodes um on mainnet for a few months we we have been contributing all of the like kind of op stuff um that's needed for getting fault proofs going uh with WTH using using their kind of like uh State engine and and uh Witnesses um and doing a bunch of other work to just make sure that reth is a best-in-class client for um uh basic for other op stack chains and that that's because like at least today if you look at the architecture of w you look at the architecture of um gu uh the

there's a lot more Headroom on the rest side um uh both from a like execution speed perspective but also from a state growth perspective for instance like if you if you project out the current state growth with with base on our gu node infrastructure we'll be at like 30 terabytes by the end of next year um and that that's like you can you can do like a you know uh you know a bare metal rack back with 30 terabytes or more of um storage that's like SSD or mvme that's you know tightly connected not networked hard disk but you can't get that on an AWS like you you you can't have a cloud offering that gives you more than 30 terabytes it's just not offered today and so that that's like not that viable for us to continue running nodes and continue to have like other people

running nodes now if you project that out with W it's way more manageable like we're talking single terabytes um uh at the same scale of through put and you know that's at 10 megga a second if we're talking about 100 megas per second it's like everything blows up you know in a way more intense way and so um that that's thanks to the hard work of the the par the Paradigm team who's been working on this for two years and you know took a lot of learnings from kind of the whole space and has built a really incredible client and so this is actually a place where I'd say coinbase is really excited to lean in with the ecosystem I mean when we built our own L2 we didn't go our own way we said we're going to build on the op stack and this was part of the thesis it was um

we're going to get a lot further if we can contribute to an open standard that everyone else is contributing to and building on and if everything we do can help everyone else if everyone else does if everyone if everything everyone else does can help us and I feel like WTH is like the prime example of that so we are going deep with WTH um we are currently like working to to move our default clients to ref our sequencer to ref um uh you know we're gonna have more announcements on that in the the next couple months um and we're actually working right now on a four-part I think it's going four-part but a four-part Blog um that's going to talk about how are we thinking about data availability execution scaling State growth um and one other thing I forget what like on the path to a gigas um because what we

we observe is that um this isn't something that we can do alone like we could scale the execution of Base really really far but if L1 isn't also doing the work to get that data availability for us it doesn't matter um and so kind of putting our uh like uh planting a flag and saying this is where we're going this is the road map this is the rate at which we're going to increase I've actually been pushing our team to like explicitly say we're going to increase by X rate every week forever and then we'll keep you know increasing the rate until the curve bends up because that gives everyone else a predictability of like this is what we're coordinating towards so that that's kind of how we're thinking about it now in terms of parallelization in particular I'd say that most of our um

effort on that right now is going towards W uh where there's really good kind of research happening um you know they were just at Frontiers uh I think a week half ago and you know folks were looking at kind of optimistic parallelization on rest they were seeing that you could you could get like a two to 3x um increasing performance with the current uh like uh state tree structure um and the current um uh kind of like you know lack of uh upfront specification of access calls Etc um but I think what you're getting at with um kind of pectra if we're talking about eof Landing uh if we if we're talking about access lists and potentially a future where l2s um require you to specify access lists um combined with eof which gets us like potentially much

uh uh greater ability to say hey for these new classes of code um we're going to have you know more uh constraints on how what you can specify and what you need to pass it on the transaction type um I think we can go a lot further like a lot a lot further you know we're scratching the surface of what's possible here and that's going to be a really deep collaboration with um The Ref team at the same time we're also like looking out into the industry and looking at all the other incredible kind of Open Source research that people are doing and saying hey what can we learn from this how can we pull this into kind of our our way of thinking and how can we help help push the best things forward that are going to make us more successful and you know this is a thing

that I often say to our team which is like you know I we set this one gigas goal um and I think sometimes even folks on our team are like scared about it you know they're like ah we have like a 100x from where we are today like I don't know how we get there like and I I what I say to them is like look you guys imagine that we are uh Google in 2001 or 2002 like how much did they scale over the next 10 years like literally thousands of X thousands right you know they built the whole internet and so you know it might take us another five years and we might need to hire a lot more people and we might have to run into a bunch of hard challenges and fail a bunch but we are going to scale this thing thousands

of x uh it's just a question of like how we do it and uh the opportunity to get to work on this at The Cutting Edge is the greatest opportunity of Our Lives to kind of Define how infrastructure um is is built to enable this next generation of the internet and so I think we just have to believe in ourselves and um put one in front of foot in front of the other and clearly communicate with the industry where we're going and what we're seeing and how we're thinking about it so that ideally all of us can coordinate um to get to that future and I think that coordination component I mean in the ethereum ecosystem I think that's one of the greatest strengths right you basically have you know probably at this point hundreds of teams that are parallel pathing on how do we

make the evm more efficient how do we get note execution more parallelized how do we manage State growth you know like hundreds of teams and all of them are publishing in open source they're they're they're publishing the smart contracts they're publishing the white papers and over time we're going to be able to pull in the best of that that's going to emerge in this new open- source infrastructure of the internet and we're going to be able to combine that to create something incredibly incredibly powerful and that level of you know like emergent creativity and emergent um solutioning across a very very diverse set of kind of actors I think it's very unique it's not something that Google had uh it's not something that Facebook had it's not something that any centralized corporation that was kind of bound to a single company had and I

think it's also not necessarily something that you know other ecosystems have where there there just so many fewer people who are thinking about how do we solve these problems great answer um I was going to say you know you've been enjoying the podcast so far I think we were enjoying having you you know I think normally what might be follow-up questions have just been you know you answering things uh before we get to ask them so that's been great exactly was gonna ask about da and then you immediately just touched on that and yeah no so yeah well I think I think I think da is an important one and again like the first part of the blog post for us is um is gonna be about da and I actually just was messaging with our team today it sounds like there was a really good uh like all all core Dev uh

call this morning like acde exec fing client there's talk about um raising the uh minimum uh gas fee for for blob space which I'm in support of I think it's great idea you know like I I think that we will get to a healthy like 1559 market for blob space but I also think it's fair for ethereum to kind of have a higher take rate in this kind of like early stages um I also think it's good for ethereum to have it be relatively low so that we can you know incentivize growth like it's still very early in all this but I just love that we're having conversations about this we're like testing we're learning um I do think as it comes to da you know like I'm we're just going to plant a flag on the ground we're at 10 meag gas right now I'm

pushing our team to get to 20 megag gas by the end of the quarter I don't know if that's going to happen but that's the goal internally um I want our team to take a goal of one megag gas per second uh one meag gas per second increase every single week in perpetuity and so if we stayed at one megas per second every week that would get us to something like 60 megas by the end of next year 2025 I don't want to be at 60 megag gas by the end 2025 I want to be at like 500 megag gas by the end of 2025 and so we'll stay at one megas per second until we feel confident we can go to two megas per second increase per week but now that we have that in our sites what we want to do is we want to

just draw the graph to the ecosystem and say hey here's the graph of our gas consumption that we're going to have uh because we believe that with every increase in gas consumption we're going to be able to saturate it just like we've done thus far like plan for it and I think once we have that Clarity the clarity of like Oh by the end of the year Bas is going to be consuming something like 30 Mega Gas a second that is way more capacity uh than all of uh ethereum is creating not way more it's it's about the capacity that ethereum has right now for data availability not including any of the other l2s I think that that's just going to be like a really clear um forcing function for the L1 teams who are incredible engineers and have been working so closely with us on the the L2

side to say oh like we are going to increase the gas uh The Blob Targets in the pectra release um we are going to make sure that P is in it you know there's no concerns about that right now p is definitely going to be in it but there's been a conversation about should we also increase blob targets and one of the big questions was is is there going to be consumption for it and I think like the thing I want to be clear about is yes Bas is going to consume it and we're going to consume it at an incrementally increasing rate of one megag gas per second per week um and so that's what we should all be planning for uh and if we all plan for that and work towards that and think about that as the the end goal that we're trying to

get to I think that's going to help us all be much more efficient and effective in coordinating all of the incredible work that has to happen in order to enable it hey guys permissionless the event for crypto natives is heading west of Salt Lake City and we're bringing the biggest names in crypto together for an incredible Camp Miss event join me on the rest of blockworks on October knife to hear for more than 200 Industry Titans including Nick white from Celestia shiram from Igan Lair and keone from Mona the conversations at permission list will be covering the hottest themes in crypto including modularity reaking the Bitcoin and Solon ecosystems Ai and crypto rollups l2s institutional adoption and of course the November election that will be right

around the cor we couldn't be more excited about this event and it's happening in one of the most beautiful places in the US ticket prices will be increasing towards the end of June so get your ticket today make sure to use the code so I get some credit and bragging rights from the rest of the team uh use ZX10 for 10% off on your ticket one more thing we're also hosting the permissionless rehack ofon in collaboration with ble box the theme this year is a multi-chain future to build a better cross chain experience so I don't have to have a heart attack every time I bridge to a new chain all hacka found participants will receive a free ticket to attend permissions so if you're a developer come join us in Salt Lake City team up with fellow devs and build the multi-chain future polygon

Labs is developing the next generation of open-source ZK Tech to aggregate crypto liquidity and user bases empowering developers to grow in a unified web of interoperable chains with the a layer the a layer is a machine for Network effect don't worry about bootstrapping liquidity just build anywhere in the a layer to tap the liquidity and users everywhere to support the aggregated future and boost scrap quality project the polygon Community grants program was launched with 1 billion tokens All For polygon Builders season one of the community grants program is live right now and features 35 million in madic to support the next generation of polygon project for Builders on polygon or projects interested in migrating these grants are for you join the a gated future and feel

empowered to grow in an infinite web of unified interoperable chains apply today at polygon.com scaling the evm um scaling the L1 scaling l2s um I think there's a related conversation in there around thoughts around decentralizing L2 sequencers for example and and just you know further decentralizing l2s as they stand today as you know there are centralizing aspects of them um I guess for Bas that's a a pretty interesting question as well with coinbase sort of um behind the effort you know can you

outline or detail any specifics around are there plans for um decentralizing the base chain and like what that road map maybe looks like yeah I mean we've been we've been very clear from the beginning that being decentralized in open source is a core value for base and a pzero priority for the the the L2 straight up we we wrote that the first day when we announced announced the test net we reaffirmed it with the um kind of uh collaboration we did with optimism that we announced at the main net where we're contrib contributing to optimism governance we're a core contributor to the op stack um we set up the network in such a way where there wasn't a single point of control explicitly so that we could start from a sufficiently decentralized point um that we felt comfortable bringing this thing to the

world in an open and permissionless way and so from the absolute beginning we have have been public and uh committed to being decentralized and then we've made progress quarter over quarter towards that goal the most recent progress is we just launched fault proofs on testnet uh we're working to get fault proofs live on mainnet uh we expect that to happen very soon um and that's going to get us to a stage one uh rollup which is you know comparable to the other kind of like leading uh l2s um and then we're going to be working fast towards stage two and so like I just want to be clear to anyone listening to this podcast base is going to be decentralized it it already is meaning decentralized it's just going to keep being more decentralized and the place that that comes from is like hey I've

been in crypto for more than a decade at this point and I deeply believe in decentralization like that's why we're here and the only way we can build a global onchain economy that increases Innovation creativity and freedom is if we build it on a decentralized platform because if we don't build it on a decentralized platform inevitably that economy will end up being coopted and coerced by a corporation or country full stop we know we know that that's what's going to happen and so you could get to a local Maxima if you don't decentralize and I think a lot of people look at base inside of coinbase and they're like oh like coinbase is just a corporation like they're just going to get to the local Maxima of like a not decentralized base that looks like an extension of coinbase

and like that's what we need to be critiquing and stopping I don't I'm not working towards the local Maxima I'm working towards the global Maxa which is a global onchain economy that increases Innovation creativity and freedom and the only way to get there is by being a decentralized platform and so that's my belief as a leader of Base the other person who really believes in this is Brian Brian Armstrong the CEO of coinbase day one when we launch the test net of Bas um you know it's 11:50 PM uh long day for me I get a message from Brian Armstrong and it says two things he says great job Jesse that was really impressive love the launch Blue Dot incredible first off you just launched a test net and you can't pat yourself on the back until you launch the main net and you're solving

real problems for real people so go launch the main net and make sure that actually works second off you must decentralize this thing if you do not decentralize this thing all of this is for not all of this is for not it must be decentralized and from the beginning of Bas that has been the message that I've gotten and that that has gotten to our team and has gone to the industry we have a a CEO founder of coinbase who has been working on crypto and decentralization for longer than almost anyone in the world who supports a uh you know creator of BAS and me who's been working on crypto for a decade and uh the two of us and our whole team and the whole company believe that the only way to build a global onchain economy is

to build it on a decentralized platform and so that's how we're coming at this from like kind of a philosophical perspective now there's a lot of hard problems in order to decentralize now2 a lot of hard problems that's why uh you know it wasn't something that we started with uh you know started at stage zero that's why all all L2 started at stage zero and then we're incrementally making progress um you know we're getting fault proofs out really excited about that we got it on testnet we're going to be integrating the security Council into our upgrade Keys that's going to bring us so that there's a even more decentralized group of folks who are um uh kind of needed in order to enact any changes you know it's at the point we integrated the security Council we're talking about like full geographic distribution across the world full

entity distribution um uh like very very very very distributed uh set of folks who are going to have like a scope down set of permissions and then we are speed running um the kind of next things that we need to get to in order to get to stage two which is uh multi prooof um so we actually have multiple proofs that are uh operating the fault proof game which then lets us constrain what uh roles and rights a security Council has um because you can say hey the security Council could only intervene if there's uh you know disagreement among the different proofs um and um the way we built the op stack uh fully open source collaborative folks like wrath and G and nethermind and others who've been building execution clients is is built

and the way we designed bedrock in collaboration with OP Labs is built to enable multi prooof and today we have proofs that can actually multiple of them we have fault proofs uh that are running on gu we're about to have fault proofs that are running on WTH um we have uh early experimental fault proofs that are running in kind of like fully different virtual machines like myips the first ones are myips VM but we're also looking at a risk VM um and then we also have teams that are standing up ZK proofs you know for for instance uh we just saw one that uh is ZK proving um with a succinct like sp1 ZK proof uh op stack and so I think next year we're going to get to a point where we actually have like multiple production proofs ready there's going to then be a

bunch of upgrade work that we need to do in order to get to that being live and you know have that kind of permissions constraining happening on the security Council but I feel like we have a like a really clear path there and it's mostly just executing so that's kind of fault prooof decentralization um uh and kind of like security Council governance decentralization I think we're making really good progress there on the sequencer decentralization which is another um uh uh you point of decentralization and I I was I was on Twitter yesterday and I think there's like a lot a lot of noise about sequencer decentralization right now and someone was like oh like how coin will never decentralize a sequencer like people are gonna say whatever they want on Twitter but um we're making progress on decentralizing the sequencer like literally we did an RFP uh you know at

the I think it was like late last year to look at round robin sequencing that RFP has turned into more work that's happening on the op stack core development to enable round robin uh sequencing I can't give specific timelines but there are plans to start moving op stack chains to round robin sequencing uh because we think that round robin sequencing is like a reasonable starting point um and potentially like a a reasonable ending point if we can get that round robin sufficiently decentralized um uh and so there there's really good progress there I also think that one of the the like fundamental misunderstandings with um kind of like sequencer decentralization is people look at sequencer decentralization and they say oh like you know no one's going to decentralize the sequencer because it's going to mean giving up the revenue for the chain um

uh and it's going to mean like divesting of the revenue to sequencer like decentralization participants um and and that they can make that critique regardless of whether you have a public company like coinbase running the sequencer or you have a foundation running the sequencer or you have a dow running the sequencer like it's the same critique which is like the the person who's running the sequencer won't want do that I I think that like I have a slightly different perspective on this um which is decentralizing the sequencer doesn't necessitate changing all of the economic value flows to make it so that all the people who are participating in decentralized sequencing are um uh you know capturing all that revenue for instance one of the big conversations that's happening on L1 right now is what would it look like if we internalized

more me and burned more Meb what does that actually mean it means the people who are doing proposing in Block building are not going to end up capturing all of that me value and instead that me value will be internalized into the network because the network is the thing that's providing the flow that people are then monetizing and it will then be made productive inside the network the same thing can be true for l2s if you think about decentralized sequencing not as oh this is an immediate path to kind of like willy-nilly give away all of the value of the network to like random participants but instead you think about it like your normal rationals business person just like ethereum can be a normal R rational business person what you're trying to do

is you're trying to get a new service into this technology stack which is a decentralized set of people who can propose and validate blocks and that service has a price it has a price and you can pay that price but my gut and my my current intuition is that that price does not equal giving up all of the valuable Network effects and all the value that flows from that to those participants it equals paying for that value and I don't know exactly where that will be priced but I do think that that is a common misunderstanding that kind of confuses people because they're like oh why would a chain ever decentralized sequencing if they have to give up all the value and I think that's just thinking about it

wrong right it's like why would a chain ever pay for this value which is a distalize sequencer set which can increase uh you know censorship resistance uh and can kind give more reliability redundancy potentially and help us kind of build a healthier ecosystem that has a value the chain can pay for that we need to figure out the technology for how the chain pays for it but that's a very very different calculation and I think if we think about it in that way you end up being able to think much more clearly and being able to be reason about okay what's the path to get there you know how much is that worth how much is that worth for ethereum L1 how much is that worth for l2s how do we build something that actually solves that that kind of solution set where the participants are

earning and and being valued for their contributions and the the kind of network regardless of how it's governed is still able to um kind of take the value that it's generating and use it to reinvest in itself because if you look at the revenue that coinbase is generating from base which is not that much revenue right now people are like tweeting incorrect numbers on it but if you look at that number where's that all going I'm spending it all putting it back in base like literally we're giving out millions of dollars of of funding and grants we're we're employing a team to do critical infrastructure research um uh I I you know like the the we need to keep enabling these you know ecosystems to invest in themselves and I think like that can happen alongside us

continuing to decentralize sequencer and contining to decentralize the entire chain if we think about it as you know just a technology upgrade that needs to happen and it has a price really detailed really great response I think you hit all of the relevant points um and even the recent discussion online that's been happening I'm following along and then I think like as sort of a relevant Point um you know you sort of mentioned the value for users and consumers of you know chains like this and the purpose of decentralizing you know sequencer for example I mean can you give go into any details around like the consumer app or sort of maybe socialy strategy for base like targeting consumers and building for them clearly that's like a very key purpose so um is there anything specific about how you're

going about that to kind of you know attract or or build for their sake yeah yeah I mean like consumer focus is been the focus of Bass from the beginning um and I'd say really right now there's two primary like primary northstars um that we are focused on um basis an economy there's going to have everything in it but when it comes to Consumer experiences the places that we are seeing the most current potential is payments and kind of basic primary Financial account financial services around that and then social and I don't use the word socialy like I just think it's bad it's like bad word it's just social and we're using this new technologies this platform to build better social experiences that have more direct earning potential for the creators who are actually bringing their

creativity on chain and so when we're thinking about kind of Bas and and our go to market and and kind of like what the top two areas are that that's it on the payment side it's about how do we get as many uh easy to use experiences on the wallet how do we get as many stable coins in as many different countries so people can on-ramp into a local currency that they're familiar with how do we give really great execution uh for cross stable coin um execution I actually just tweeted about this this morning if you look at euro to dollar conversion rates on chain they're currently 100 times faster and two to 10 times cheaper than anything into the traditional web World traditional Finance World 100 times faster and two to 10 times cheaper 100 times faster two to 10 times cheaper like what's crypto

good for well it's a 100 times faster and it's two to 10 times cheaper and so figuring out how do we make that just work in every single country in the world so that people can come on chain and it's not this like crazy thing but it's instead oh now your money just works 100 times faster and two to 10 times cheaper than it did before and we're building a really healthy Financial ecosystem of real products that let you borrow and lend and get credit uh and and earn U that are globally accessible and that work with your money like that's a really powerful payments plus primary Financial account product and making it so that a the infrastructure from a technology perspective is all there be the infrastructure from uh an economic and capital markets perspective is there you know stable coins uh you know trading

infrastructure Landing infrastructure baring infrastructure um and then C you have really incredible user experiences uh in the form of wallets that are globally available that are localized um that is like a core part of our strategy and so there's been also all this noise on um uh crypto Twitter about like Defi and ethereum and like I don't it's it's onchain Finance we can call it defi but it's going to be massive like we're literally going to rep platform the entire Financial system onto things like base in ethereum and it's been the leading use case uh for the last six years seven years uh you know lifetime of ethereum it's going to continue to be a leading use case along other use cases that emerge because the whole internet's

going to come on chain and Bas is deeply deeply invested in it because we believe that the the best thing we can do for achieving coinbase's Mission which is increasing economic freedom globally is create a global onchain economy that lets people come into it and lets them live a better life and that's going to happen because we're going to build incredible tools incredible Financial infrastructure and incredible interfaces that let everyone just do that so that's my that's my take on defi the other one uh social if you look at the last decade of consumer growth of new apps that have emerged all of the apps that have gotten any meaningful level of consumer scale adoption when I talk about meaningful adoption I'm not talking about like meaningful crypto adoption I'm talking

about meaningful adoption like hundreds of millions or billions of users they all social apps period all of them 100% maybe there's like you know it's like payments I think payments is social maybe there's like shopping but even the shopping apps all of them are social and so if we're talking about what's going to bring the world on chain it's going to be social products full stop and so that's why kind of from the beginning Bas has been really focused on enabling social experiences that's why you saw us lean in really hard with forecast and still be leaning in with farcaster and frames and making it so developers can build these kind of like oneclick interactive social content units where you can buy

or Mint or pay or tip or nominate someone all in a single feed um that's why we've I think really been leading the way in uh talking about the the story of creators and how creators right now when they bring their creativity online they make less than 1% of the value and in the new onchain social World they can make 90% of the value that's why we've been been doing that ourselves with the Bas brand where everything we do is minted on chain and we have generated hundreds of eth of Revenue which we then given back in the form of Creator grants to creators who are creating onchain because we believe that once we get this flywheel going we're going to um just be able to suck in all the creators because they're G be like oh I can make 1% here I can make

90% there yeah I'm G to make 90% there that's way better for me um and that's also why we we have been kind of like helping in whatever way we can people build incredible social experiences with things like the smart wallet which lets you onramp in less than 10 seconds you know get a new wallet less than 10 seconds we're about to launch session keys that will mean you never have to sign a transaction again it all just works behind the scenes in a fully non-custodial way um uh and we're going to make it so the the login experience both for users and Developers for social products is 10x better on chain than online and when that exists then people will be able to build 10x better products that whenever you come to a new social product you're not going to have to set a profile you're not going to

have to set a description you're not going to have to set your picture you're not going to have to follow your friends you're not going to have to import your text messages you're just going to come there and it's all going to work because you're GNA have one onchain identity probably connected to and represented by your base name that will immediately know who you are where you can share information that you want to privately with that application and then we can build composable social products that all feed off of each other to create something that's you know 10x better than what ever exists today and so that is still very early but I think it's we're starting to seal real signs of growth and if we solve those two problems payments plus primary Financial account powered by really powerful decentralized Finance defi or onchain

Finance infrastructure plus uh viral social products that bring the world on chain through kind of natural virality everything else is going to follow we're going to see the games because they're going to get distributed through the social graphs and they're going to have really easy payments bu into them uh we're going to see the decentralized fiscal infrastructure again because they're going to be distributed through social graphs and they're going to have really good payments built into them like anything that is being done online right now will be able to be done better on chain because it will have access to a really powerful social graph that you can build on top of p plus incredible payments infrastructure that makes it easy for businesses to accept money from anyone anywhere in the world and so that's the kind of top two focuses for

us this year and as we head into 2025 and then of course you know again Bas is a really rich economy and we're we're working and supporting people across every single part of the the the economy that makes a lot of sense Jesse and and I have to say like if if we had more time I want to ask a ton more questions personally for me this has been my my favorite uh xerx research pod that I've been on so you know really appreciate you having on to to kind of close things out related to the conversation that you know we're having here at the tail end about the consumer app Focus for Bass and you know the sort of change of some of these traditional experiences that folks have have and how how base more specifically but also crypto as a whole augments that and so you know was kind

of curious like five years out from now you touched a little bit about like you know onchain identity and whatnot but you know what does the sort of General onchain experience look like or what do you want it to look like on base specifically and especially compared to a lot of the traditional financial services and traditional applications you know imagine the the next big social media platform and it's base or the next big you know Neo bank that you know maybe it's coinbase itself just you know built on top of Base whatever that is what does that look like five years from now and how does Bas enable that specifically well I hope it doesn't take us five years to get to what I want to get to I I think that we now have the pieces to um get there the next year and

like I was actually just talking about this with our CFO like I feel like in the last year we built a bunch of the pieces things like the smart wallet getting Bas really cheap um getting base names live um but still a little fragmented you know like they they don't work cohesively together for instance like we shipped a smart wallet because we want to get out as quickly as possible but like it doesn't yet work in the coinbase wallet mobile so people have like two wallets it's really confusing super broken experience but that was an intentional decision we made so we could get this thing out we could learn we could iterate and then we're now working of course to integrate it into the smart into the mobile wallet and will all just work um and so my goal is by by next summer by onchain summer

three like it's all going to just work and I think what that experience looks like is you see a new app that you like you download it whether it's a mobile app or a website you go to the website um you click create an account that pops up biometric you put in your biometric and immediately you've just created a smart wallet that smart wallet Works across all the other apps you want to um next if that app wants profile information about you it's like okay cool create a base name um and you create a base name that's free because it's going to be subsized for your first year and maybe it'll be 20 cents after that every year which is less than people pay for iCloud storage um and you you can start putting in information you know you could add a profile picture you

have a name um you maybe add some private information like your email account or your phone number your shipping information that gets stored offchain or stored in an encrypt VA that's accessed by you and then immediately that app has access to it um uh and uh that app then can say oh you want to uh you know mint something great first mint free um because we're using a pay Master that's makes this experience fully gasless you mint your first one you support a creator that you love um next you know you're scrolling again you me another one oh in order to do this mint you need like 10 cents or five cents um you know mints just Dro 10x they were $3 before now they're you know 25 cents they're going to go cheaper again it'll be another 10x cheaper um and it's like want to pay with Apple pay

great boom Apple pay first one Apple pay you paid with Apple pay you minted with Apple pay and now you have you know credit on your uh wallet to do 10 mins because you did a dollar Apple pay payment awesome totally seamless took two seconds next time oh you're out of balance um it's a lot cheaper if you fund with your debit card or if you fund with your a do you want to bring some money on chain if you bring money on chain you're going to get more money in your pocket because you're going to have a higher interest rate uh you're going to be able to send to anyone in the world boom now we get them to bring $100 or $1,000 do into their wallet they then use that to Mint in the social app they start following they build out a social

Craft um it's it's all working there and then they're like oh my friend just sent me this really cool new social app I download the social app it says log in I click login I log in boom everything is there I have a funded wallet I have a social graph I can see all of my past activity it all just works I'm like whoa this is a new internet like before I would have had to spend 10 minutes creating this account and now it just works awesome now I have a second social app same thing for third fourth fifth boom I want a new Financial Product download an app Financial product Oh I want to this is a more trading one because I'm getting more advanced download same thing log in just works have everything I need there oh you want uh you you just brought $1,000 on but

now you're bringing $5,000 on that sounds like you that's a lot of money you should secure this account more do you want to set up Social recovery oh here pick these three people to set up Social recovery now you're GNA need two of them to recover your account in the event that you lose it um do you want to set up a coinbase recoverer that we'll do a video call and a a a ID verification to make sure that you are who you say you are now okay great if you ever lose your pass key uh or your signing mechanism um that can recover it also we should set up two Factor authentications for you um here add another Hardware key or a second signer um for transactions that are above $1,000 you'll now need this second signer great set up boom now you go to

do some real Financial products oh great I'm gonna bring in $100,000 I know that if I ever lose access to my account I can recover from coinbase I can recover from social recovery I know that if a hacker ever tries to do something on my account if it's more than $ thousand doll I'm G to have to do a second verification that's going to be more secure than my bank um and I feel confident oh this is a new Financial product that actually works better for me it's more secure it's more transparent but one of the things that is making me a little nervous is my account is public and that's really good for social but I just brought $100,000 on and maybe I have more I don't feel comfortable having on that okay cool well great you have a private Vault too here's your private Vault bring money

into the private Vault your private Vault can do all the same stuff you can send money to friends you can uh invest in mem coins you can uh you know hold money in aate stable coin account and all of that just works you don't have to think about complexity um you just use this address and you have people send to private jesse bas now you have your full onchain privacy and all of this is encompassed in a simple base name that works everywhere that has all of your uh you know history attached to it can manage your privacy uh uh a simple smart account that lets you have sub accounts lets you have recovery let you have multiactor authentication and then it's running on top of a secure scalable L2 in BAS that doesn't just lock you to base but is a bridge not an island and

lets you do anything you want across all of the chains across the entire onchain economy because we can use intents and cross L2 execution with all the standards that we've written to make it so you can seamlessly use your balance that's sitting on base to transact across any other L2 to transact across salana to do things on L1 if you need to and we can trust that that's going to happen in the most efficient Capital efficient possible way possible so like that's what we're goingon to have next year like I'm just calling the shot like that literally this is what we're building we started building it last year it takes a long time to build things but that's where we will be next year the Privacy stuff might take a little bit longer um but like that's the Northstar and so I think that version of

onchain is going to be better than any internet product period full stop and it's going to enable more Innovation and more creativity than any internet technology platform that exists today by 10x full stop and we're going to enter this Golden Era that we've been waiting for that where we're not going to see you know hype driven by prices we're going to see hype and excitement driven by adoption and utility and people coming on chain because it gives them an opportunity to live a better life and because they they are seeing the impact of having a global onchain economy that increases Innovation creativity and freedom and so me and my teams and coinbase and so many other people in the industry that is what we are working towards and we've been working for a

long time like more than a decade at this point but our time has come and the moment is now for all of us to put our heads down to ignore the noise ignore the prices to keep building to stay based and to create the future of the internet onchain amazing I I love I love the optimism it's refreshing because you know CT is just constantly drowning in this doomeris and you know this is we need more of this energy and so I'm glad that you brought it Jesse yeah thanks for having you guys loved it Jesse love the the final sort of layout of the vision the plan um maybe hopefully we can have you on again next year and talk about let's talk about next year at the next excited for it see everything live um it was great having you on um any

final statements you want to make or no thanks everyone for listening and uh we'd love to build with you on base if you need help go to b.org we have tons of resources get your base name we'll automatically kind of Route you to whatever you need in order to be successful and we're excited to support you in whatever way we can awesome thanks so much for on and thanks everyone for watching stay based everyone are you currently building on polygon or interested in migrating season one of the polygon Community grants program is live right now and features 35 million in madic to support the next generation of polygon projects builders on polygon these grants are for you join the aggregated future today by applying at polygon.net [Music]