Coinbase's 'Base' Powering Layer 2 Summer

that's division skill ethereum together and it may be that we're creating all of these kind of mini chains or you know bass and uh op mainnet and Zora Network and PGN even you know our arbitrum one and and scroll and all these things but the thing that we're all contributing to is scaling ethereum and bringing billions of people onto ethereum and that is the rallying cry it is about coming together to create a new platform that can create a new open global

economy that can change the world Nation today at Etc I talked to Jesse Pollock of bass it's interesting to that everyone seems to associate Jesse Pollock with bass he's actually at coinbase building base and that actually is a difference one of the nuances that we unpack in this show about bass of course is that bass is its own independent chain being incubated by coinbase but it is not coinbase it is a decentralized or will be a decentralized

layer 2 incubated by a the perhaps one of the largest centralized company in crypto but will eventually be cast off on its own to join the super chain the op stack super chain so we we unpack a lot of these conversations of course we're all very excited about the seemingly knock on wood incoming layer 2 summer and I feel like I start this conversation off here that base the layer 2 is at the spearhead of what might be a layer to Summer and of course layer two bull market is what that really means

coinbase is going to funnel potentially thousands tens of thousands hundreds of thousands of users and developers onto base at the same time that all of these other layer twos have been building out their own groundwork the ZK Roll-Ups the ZK stack polygon optimism all of these things are have been growing roots for the past three or four years now and with coinbase funneling people into this industry through base these are the ingredients that have gotten so many in the ethereum community excited for a potential layer to Summer and so we talk

about this we talk about what coinbase is doing to not only Pioneer the layer Twos for the outside world but also contribute back to the layer 2 ecosystem specifically through the op Collective and soon in the short term future we're going to be hearing from Ben and the optimism team about something called The Law of chains bass is an OP stack chain that makes it a part of the op Collective the optimism Collective and this is just a really important point coinbase is a centralized organization that is forking the op stack but meaningfully being a part of the op

Collective part of the base validator fees the fees that coinbase receives for operating the base chain is going to go to the op Collective the optimism Collective which of course also goes to retroactive Public's good funding and so not only are they pushing forward the frontier of the op stack and contributing to the code base with things like rust ethereum they're also donating the revenue part a share of the revenue to the op Collective and so it's just such a strong commitment to the values in the ethos of layer 2 of

ethereum through the optimism system the beauty of this is that coinbase is allowing base to be optimism not coinbase they are allowing base to be governed by optimism and contributing the fees and being a part of the whole public goods system that is powering optimism and I think that is such a good move by coinbase because it's such a firm vote of confidence for both layer twos but also just a permanent political and Technical Bridge into the world of decentralized Technologies into to the

world of decentralized finance and this whole blockchain system that we know and love I think you can tell maybe I speak for for many of us in the ethereum ecosystem that Jesse's just become a fantastic leader everyone in the LA or twos has really appreciated all the effort that he has done both for coinbase and for the layer twos I really hope you enjoyed this episode with Jesse and if you are enjoying all of these ECC interviews and all the other abroad interviews that I have done well all at all of my conferences consider going to permission list permissionless is the next conference that is out there it is

September 11th through 13th it is the conference that me and Ryan and the rest of the bank list team collaborate with blockworks who know a thing or two about throwing conferences and so it's the only conference that Ryan actually goes to is the one time of the year that actually do see Ryan on a consistent basis and so maybe Paris is too far from you maybe all the Asian conferences are too far from you maybe maybe devconnect is too intimidating but you just want to go to what might be familiar well you're a listener of bankless and what I I think permission this is fairly called a

reunion of all historical bankless podcasts guests and episodes and all the other fans that are listening to bank lists and so if you want to step into the world of conferencing which there's immense value there and immense fun permissionless September 11th through 13th Austin Texas it's my first time in Texas uh it's going to be my third time meeting Ryan uh and so if you meet Ryan for your first time you're only two times behind me and so there's a link in the show notes to get started getting a ticket for promotionless if you're a bankless citizen you get 30 off of your permissionless ticket which basically means a banklic citizenship pays for

itself if you go to permissionless so I look forward to seeing all the bank list listeners there just like we did last year and hopefully again for every single year after that it is the bankless reunion the bankless meeting place and so I'm very very excited about that conferences always get me very excited but I know you ought to be excited for this particular conversation with Jesse Pollock from base so let's go ahead and get right into that conversation but first a moment which talks about some of these fantastic sponsors that make this show possible especially Kraken our preferred crypto exchange for 2023 we all need to to get our Boomer Fiat bucks into the world of crypto into the world of layer twos and

perhaps you can use Kraken on preferred exchange to get that done so let's go hear from them right now Kraken Pro has easily become the best crypto trading platform in the industry the place I use to check the charts and the crypto prices even when I'm not looking to place a trade on Kraken Pro you'll have access to Advanced charting tools real-time Market data and lightning fast trade execution all inside there's spiffy new modular interface kraken's new customizable modular layout lets you tailor your trading experience to suit your needs pick and choose your favorite modules and place them anywhere you want in your screen with Kraken Pro you have

that power whether you are a Season Pro or just starting out join thousands of traders who trust Kraken Pro for their crypto trading needs visit pro.cracken.com to get started today introducing polygon 2.0 the value layer for the internet for too long the limitations of blockchains have held back app development and stifled user adoption the internet allows anyone to create and exchange information what's missing is a value layer that lets anyone Exchange store and program value that's where polygon 2.0 comes in polygon Labs has unveiled a series of

innovations that will radically alter the polygon ecosystem and web3 as a whole by leveraging groundbreaking ZK Innovations such as polygon ZK evm the next iteration of the Best in Class plonky 2 proving system and a first of its kind ZK powered interoperability layer polygon 2.0 will give users and devs unlimited scalability and unified liquidity right now there is a polygon Improvement proposal regarding a potential ZK powered upgrade of polygon proof of stake if approved polygon proof of stake would become a layer 2 ZK evm validium so make your voice heard on

this proposal by joining the polygon Discord today you have a chance to help the polygon Community give the internet the value layer it deserves enter mantle an entire ecosystem dedicated to the adoption of decentralized token governed Technologies mantle formerly known as bit doubt is the first dowled web3 ecosystem all built on top of Mantle's first core product the mantle Network a brand new high performance ethereum layer 2 built differently from the other layer twos that you may be familiar with mantle asks the question how would you build a layer 2 if you had a technology

of 2023 mantle network is a modular layer 2 built using the op stack but uses eigenlayer's data availability solution instead of the expensive ethereum layer 1. not only does this reduce mantle networks gas fees by 80 compared to other layer tubes but it also reduces gas fee volatility providing a more stable foundation for Mantle's applications the mantle treasury is one of the biggest dow-owned treasuries in default which is seating an ecosystem of projects from all around the web3 space for mantle mantle already has sub communities from around web free onboarded to help the growth of mantle

like game 7 for web 3 gaming or edu Dow from the world of DSi and buy bit for TPL and liquidity and on-ramps so if you want to build on the mantle Network mantle is offering a grants program that provides milestone-based funding to promising projects that help expand secure and decentralized mantle if you want to get started working with the first dowled layer 2 ecosystem check out man mantle.xyz you can follow them on Twitter at Xerox mantle bienvenue uh bankless Nation we are here at ECC the 30cc since I think all of this crypto

Mania has really gotten started and things are only getting crazier with coinbase launching base soon TM I'm here with Jesse Pollock Jesse welcome to bankless once again thanks dude glad to be here hey bankless Nation glad to be here talking to all y'all so if you look at the reception of base on Twitter it's insanely positive how is it in real life it's been awesome I mean we've been so excited about the number of Builders uh who want to be coming and building with us and so you know I think when we were kind of in the pre-test net phase we had

a little bit of trepidation of like how are people going to receive this what's the response going to be um and I think it's landed really well I think people have understood our kind of strategy for decentralization they've appreciated the way we are collaborating so deeply with optimism leading into ethereum scaling ethereum I mean I think they see how bass can really help bring the next million developers next billion users on chain so it's been awesome I think that the story of base is hopefully a microcosm of the story of layer twos at large as well there is a

growing boiling sentiment among the ethereum clan that we're on the cusp of a layer two summer and perhaps bass is actually the spearhead of that maybe we could just take a moment I know we've had this conversation every single time you've been on Bank list in the last like year or so but let's just go through just like why is base different from all the other layer twos we have optimism we have Arboretum we have the ZK Roll-Ups yep bass is just another rollout yep is it why is it unique yeah well I mean I think first off we do think that the pie is massive right and so what we're really focused on is

collaborating with everyone to grow that by um and make it so we go from the less than 10 million people we have on chain today to 8 billion people over the next few years and so that's definitely the focus in terms of the place where I think bass is going to be able to differentiate I think the intersection of base and coinbase is really an opportunity for us to kind of get the full end-to-end experience working right and that's not to say that baseball exclusively work with coinbase right like base is going to work with every wallet it's going to work with every dap um but I think having that kind of like test bed where we can say okay what does it look like to distill down this user

experience from you know 12 steps to do something and a bunch of really complex infrastructure choices that users have to make to I want to do a thing it's done um I think that's kind of the experience that we're really driving towards and I think once we get that down where we what we're going to be able to do is we're going to be able to bring all the coinbase users and all the coinbase assets on chain um but then B I think we're gonna have a template that's going to be able to bring all of the next million 10 million 100 million billion users on chain and this is of course bullish for coinbase because if people

want to be like hey what's that D5 thing coinbase has the answer for that exactly and and not just defy things you know I think we're really excited about D5 but we're also excited about all of the kind of emerging consumer use cases that are happening on chain I mean increasingly we're seeing uh gaming on chain we're seeing food on chain we're seeing music on chain we're seeing art on chain we're seeing media on chain like everything is coming on chain um and I think building a platform and building experiences that enable that for everyone that's what it's all about can we talk about what's it like for a

the probably the largest centralized company that we have in crypto to build a decentralized network so like how how is that interface because is base coinbase or is coinbase and base a partnership between two separate entities can you like parse apart yeah absolutely and you know I had a main stage talk today at ECC um uh the goal with base is to build a decentralized open network and the reason why we think um decentralization is so important is because decentralization is fundamentally what enables an open global on-chain economy

and an open global chain economy is the thing that's going to increase economic freedom globally and economic freedom globally means a better world it's like that's the through line it's like decentralization enables the open global economy enables increased economic freedom enables a better world um actually getting there absolutely a challenge um I think there's kind of like three primary axes of that challenge the first is that the technology is still relatively early right if you look at all of the Roll-Ups across the space I

mean you kind of stack them up against the stage zero stage one stage two kind of categorization which talks about training wheels um I I think you'll see that you know many of them are stage zero uh some of them are stage one there's no stage two and so making sure that we're actually contributing there that's I think a really important challenge the second Big Challenge is that we are launching out of a centralized company right and one thing that I think sometimes gets overlooked is we're not the only people who've done this right like if you look at other Roll-Ups you know optimism

mainnet um Arboretum those also launched out of labs companies right op Labs octane Labs but we are the first publicly traded large-scale U.S brand to do this and I think that that you know does definitely have increased visibility increased challenges in certain ways and it's a great opportunity too increase opportunity too absolutely um you know I think we're Paving the way and I think what you've seen over the last you know four or five months since we we started talking about base is that a lot of other people are kind of following our footsteps you have more and more op stack chains coming out

you have more and more folks who are saying wow is this a way for us to bring our users on chain um so I'd say I'd say that kind of like launching is is the Second Challenge I'd say the third challenge is just that we're still operating in a really um unclear and ambiguous policy environment regulatory environment right like everyone and I think you probably experienced this the whole crypto Community experience is this like we're spending more time and energy on lawyer fees and policy uh efforts then we are on like innovating and that's a really really hard context especially when you

know a company like coinbase is so kind of at the front of that policy effort and so I'd say those are the three big challenges we've done a bunch of things um to kind of address those challenges we're investing really heavily on the technical decentralization side um you know investing in up up get the client and building up breath with Paradigm um and a collaboration uh Building open source monitoring tools like pessimism we have a whole team just dedicated to op stack core development because we joined in the second core developer we also are

um you know committing to a neutrality framework that optimism uh has been like working on it's still in the draft phases they're gonna be opening up for their whole Community um to kind of weigh in on and and contribute to and they'll be talking a lot more about that they're really leading the way but we've kind of said hey we're going to hold base to these neutrality standards because that's what's going to enable us to keep base open and permissionless we've also set up the network you know in the initial way we've launched it such that it is sufficiently decentralized to actually adhere to those neutrality standards so that coinbase nor kind of the base team

is a single point of failure in the system and then I'd say the third the third big way that we're really kind of addressing those challenges is we're creating sustainable funding mechanisms um for base uh to fund the public goods and the underlying infrastructure that actually makes it all possible um so we're going to be contributing a portion back of our sequencer Revenue to fund public goods through the optimism Collective we're also starting to spin up our own kind of public goods grants programs starting some of those in August I think all of those pieces the technical Investments the neutrality Investments and the funding Investments

are going to be able to get us that decentralization that's so critical for base in order to enable that open global on-chain economy I think a big theme of your answer just now is twofold it's really about trailblazing in two different ways one is coinbase is directly interfacing with a lot of the infrastructure and and pouring in resources to make the infrastructure to support space better and the beautiful thing about that is that it's reproducible across trains and it's also trailblazing in a signaling sense as in

planting a flag like Hey we're we're making a chain we're going to make it decentralized and we're not going to Silo it we're going to be building bridges to the rest of the ecosystem can you talk about just like the trailblazing nature of this whole project and what you're hoping to to get out of that and just signal to the rest of the industry yeah I'm just like getting a little emotional as you say that it's um you know I in uh at the end of 2021 uh I

kind of stepped into a new role and the goal was figure out how to bring coinbase on change it's like a 4 000 person public company um there's not a road map for that there's no like here's what you do to bring the company on chain um and the first year was like wandering in the dark like literally just throwing things against the wall and failing and uh you know they actually uh we shut down like my team at some point where I was like you've tried enough like try

again kind of out of the ashes of that shutdown I mean a couple people started like what if we had one more shot what if we took the learnings and we did it one more time and that was that was base you know it's like the developer platform that we needed for the first few tries um and then the last year has been just trying our best to do what we think is right and what we think aligns with the ethos of crypto and the ethos of ethereum and again there's been no Playbook like no one told us here's how

you launched a decentralized network out of a public company um instead we've just tried to bring together really smart hard-working thoughtful people inside of coinbase and then what what I like to call the super team of people outside of coinbase across op Labs across the optimism Foundation across all these other teams who are starting to build on the op stack you know Zora get coin uh cello countless other teams who are contributing here and we've tried to

just be like what do you guys think how do you think we should be doing this how do we think how do you think we should be leaning into the values of crypto and ethereum and I don't think we've been perfect and I'm sure we're going to make mistakes in the months ahead and years ahead um and it's been really really hard trying to figure it out but I'm I'm really proud of um the decisions we've made thus far the

way we've learned from some of the early mistakes that we've made um and I do think that we're having a positive impact on showing the world that it's possible to come on chain that whether you're a small company or a big company this platform the on-chain platform offers so much new opportunity because For the First Time it fundamentally puts everyone on the same playing field and says if you're a builder in the United States or in Paris or in Kenya or in Venezuela or or

wherever you can build an app that anyone else can use and if you want access to financial services and you're in any one of those countries you can access the same financial services and that opportunity the equality of opportunity the impact from an economic freedom perspective give it's worth trailblazing for it's worth fighting for it's worth doing freaking hard things that none of us know how to do and all we can do is just figure it out try our best make mistakes

learn um I think that's that's our ethos with bass it's like one foot in front of the other bring the world on chain I think a reason why so many people find themselves in the crypto industry after they get in here they kind of understand that are their old the old institutions are crumbling they're not really serving to the best sometimes to the best of their ability they're not really serving the needs of the people of the world the the institutions of old are just decaying and what's cool about and optimistic about the future of crypto I

think so many see that I definitely see and I think you see is that we are offering new platforms to build new institutions and we also we also have new institutions that look and feel like our old institutions like coinbase it's a new crypto bank and it does better things than old Banks but it's still the same form factor uh not to not to belittle everything that coinbase has done but when you tell me that coinbase and Zora and the op Collective and op labs and anyone building an OP stack chain has formed I don't know what it's like like a telegram group of uh of

what'd you call it the super team yeah and building this New Foundation that feels like a new institution as something a new system of collaboration that feels like the new the net new form factor totally and there's no like to be clear there's no telegram group where there's like a cabal of us like coordinating right like it it's around open source code right like we started building base without talking to the op Labs team or optimism because we looked at the code and we said this

is open source it's MIT license we can do whatever we want with it and we started and I know from talking to other teams that that was a similar experience that they had where they just started and then there's infrastructure for letting us communicate with each other right like optimism has you know incredible governance processes that they're building out slowly but surely you know the citizens house the um kind of whole missions uh process that they're starting to do the token house and the delegate platform there um but I think mostly what's happening is people are rallying around code and

they're rallying around the public goods that enable us to build this new economy and they're seeing that their values aligned with other people who are building with them and they're just creating in a permissionless interoperable way and that is it's a beautiful thing it's a little scary at times right because you know going back to your your original question or not original question but earlier question around like how does base differentiate or how is bass different than all these other Roll-Ups like we don't know yet I mean we do know

right like there's obviously ways that bass is different but also we're all doing different experiments and um like trying to figure out but I think the thing that I'm keeping in my mind throughout all of this is that our ultimate vision is to scale ethereum that's the vision skill ethereum together and it may be that we're creating all of these kind of mini chains or you know bass and uh op mainnet and Zora Network and PGN even you know arbitrum won and and scroll and

all these things but the thing that we're all contributing to is scaling ethereum and bringing billions of people onto ethereum and that is the rallying cry it is about coming together to create a new platform that can create a new open global economy that can change the world part of the collaboration between coinbase and the op stack decentralized network of was the decision to contribute some of the sequencer fees of Base to public

goods yeah can you just talk a little bit about that decision and why that's such an important part of the story yeah I mean it just felt obvious tasks kind of from the beginning right it's like if you look at the ethos of impact equals profit and you look at the models that we've started to build where we have new funding mechanisms for public goods the idea that coinbase would make benefit from those Technologies are basically benefit from those Technologies and not contribute back almost felt laughable

and so I think kind of from the beginning we took it as a given that if we were going to be building on this technology we were going to be contributing back to it and we were going to be funding it and not just the op stack but all of the public goods that make crypto possible whether it's ethereum whether it's the underlying like Linux infrastructure that makes ethereum possible like all of that stuff deserves to be funded and today we don't have good funding models for it but I think the the thing that's exciting for me is we're starting to build sustainable sources of income to fund it

right like base is going to drive more transactions and those transactions are going to drive more revenue and those revenues are going to drive more funding and then we're starting to build new and novel systems for funding right like I had the the privilege of participating as an individual not as representative of base or coinbase in the latest retroactive public goods funding round um with the optimism Collective and it was unlike anything I've ever seen before it wasn't perfect right like this

is round two uh it started out with like you know like vitalik and 15 other people like you know trying to figure out what's worth funding this one I think was like 70 people you know we you know looked at 300 projects people ranked them you know I shared my distribution people you know had thoughts and feedback everyone's distributions were different everyone's methodologies were different but it was like 75 billion people being like how do we do this right and that process

I mean it was it was inspiring and now we're gonna do it again right like retro pgf3 is coming um 30 million op which is 33 million dollars so some some large amount of funding um and we're gonna you know I've already been looking at the way they're starting to run it and it like we're four four months later and they've already made a huge number of improvements and so that iterative process of like we're going to fund we're going to

experiment we're going to learn we're going to fund we're going to experiment we're going to learn we're gonna fun we're going to experiment we're gonna learn until we have literally rebuilt the world on chain that's what it's all about metamask has something new introducing metamask portfolio metamask portfolio is the best way to view your crypto portfolio from a holistic level see everything across all the trains all at once in your portfolio metamask will report the aggregate value of all the assets in your metamask wallets and even the other wallets you import too but

metabask portfolio isn't just a passive portfolio viewer it is a place to do all of the money verbs that make defy so powerful you can buy swap bridge and stake your crypto assets so not only is metamask the easiest place to see your wallets in aggregate but it's also a powerful battle station for all of your D5 moves so go check out your metamask portfolio because it's waiting for you to open it up check it out at portfolio dot metamask.io arbitrum is accelerating the web 3 landscape with this Suite of secure ethereum scaling Solutions hundreds of projects have already

deployed onto arbitrum 1 with a flourishing defy and nft ecosis arbitrim Nova is quickly becoming a web 3 gaming Hub in Social daps like Reddit are also calling arbitrum homes and now arbitrum orbit allows you to use Arbor from secure scaling technology to build your own layer 3 giving you access to interoperable customizable permissions with dedicated throughput all of these Technologies leverage the security and decentralization of ethereum and provide a builder experience that's intuitive familiar and fully evm compatible faster transaction speeds and significantly lower gas fees are you a Dev but you

don't know solidity with stylus arbitrum's upcoming proposal for a programming environment upgrade developers can write smart contracts in Rust c c plus and many more coding languages arbitrim empowers you to explore and build without compromise visit arboretum.io where you can join the community dive into the developer docs Bridger assets and start building your first app on arbitrary are you planning to launch a token is your token already live and are you granting your employees in contract actors vesting token Awards and are you trying to figure out how to take care of taxable events for your team toku makes

implementing a global token incentive award simple with toku you will get unmatched legal and tax support to Grant and administer your Global team's tokens Toca will help you navigate across the life cycle of your token from easy to use pre-launch token Grant award templates to managing post-cliff taxable events with payroll for legal finance and HR teams is a huge complex task to have to comply with labor laws payroll and tax obligations tax reporting and crypto regulations in every country that you employ someone it's difficult time consuming manual and costly and is

drawing more attention from Global regulators and governments toku makes it simple for leading companies in the space protocol Labs hedera git coin and many more so if you want some help in navigating the complex world of token compliance go to toku.com bank list or click the link in the description below yeah I think that really fits in with this whole Layer Two summer that you know we're all in anticipating we all feel like we're on the on the cusp of slowly but surely uh the the when the we did retroactive public goods funding too I was I told a team like hey if you got

a retracted public goods like tweet at me and I'll retweet it so I was just retweeting all of these like all these teams getting somewhere between 1 000 and like fifty thousand dollars yeah and it was it felt like I was reminded of Andreas antonopoulos's meme of the Festival of the commons when more people use the same systems is actually improved so yeah this is the nature of Open Source yeah but now when you inject uh economics into these the Festival of the commons all of a sudden you have retroactive public goods funding and then you have that like raining little rewards on all these projects that are

asking for funding to build to build the collective yeah and the when I saw a retroactive public Lids one and two I was like man that is actually kind of a drain on the op token because these layer twos they're so young it's still like coming basically out of VC funding to start this whole thing but then if you if you tell me that the base op stock chain is contributing some of its validator rewards that secret rewards to the collective along with along with Zora chain along with the loudest chain along with the op mainnet Gene and you're also about to tell me that

there's probably 10 more op stock chains in development that we haven't heard about and we're on the cusp of a layer two summer all of a sudden that seems that feels very very Festival of the commons to me and it seems it makes me optimistic yeah I'm optimistic it's building um it's all coming together and I think it's happening this summer layer to Summer on chain summer it's it's summer and the builders are feeling the energy you know like the moment is now I think we've been waiting a long time for the infrastructure to be ready um but it's ready and the apps are here