Fireside Chat I Jesse Pollak and Kartik Talwar I Ethereum’s “Onchain” Future | Pragma Paris 2023

foreign [Music] let's get right into our next interview which is with Jesse from coinbase or base I want to talk about all the things that have been happening in this world and especially as we think about scalability there's a lot more going on for all of you to to know about and we're going to cover all those things and without further Ado please welcome Jesse on stage that was my water right welcome Jesse we'll get this on there we go hey kartik how's it going it's Friday it's Thursday you actually almost had me it's been a long week um well I want to start off by kind of just understanding some of the context around how did base actually happen what was the Inside Story here how did you get coinbase on board or who got who on board and uh how did this come to be hey everyone happy Thursday I'm Jesse I have been in the coinbase orbit for six and a half years now um so I joined as a through an acquisition of a company I started and then I led all of our consumer facing businesses on the engineering side for four and a half years so coinbase coinbase Pro coinbase wallet um and then starting late 2021 I stepped into a new role and the role was figure out how to bring coinbase on chain you know if you look at coinbase's business historically it's mostly off chain centralized exchange brokerage uh but we started building new products like usdc like CB wallet and there was a lot of appetite to say okay like how do we transition everything over the next decade um and so that started what was a long journey to base a lot of trying and failing we spent about a year just like trying products to see if those would be a catalyst to bring coinbase on chain um we kind of got stuck at every point a lot of the time we got stuck on like where do we put this and how do we make it actually work at coinbase scale um after a bunch of trying and failing there they actually shut down my team they were like it's enough failing go find something else to do um and so that was uh kind of the late summer of last year and then kind of out of the ashes of them shutting down the team um me and one of the other people uh were like maybe we should just launch a test net of a chain because that's been this thing that's just been like blocking us again and again and so we launched that internally people started using it and then we were like maybe we should give this one more shot so we made the pitch uh people were uh begrudgingly said yes go go do that um and then we've kind of been Off to the Races and I think I don't think anyone really thought it was going to be people didn't really know what to make of it until we launched the test net and then we launched the test net and I think that kind of connected like it was like oh like this is this is kind of the platform for the future of the business this is where we're going to bring the next million developers next billion users on chain I don't think uh anybody knew that story this is awesome um well that's a big mandate so we're gonna go into uh how you execute on that uh but maybe maybe before we get it started like what's the separation here between coinbase and bass in terms of kind of how you think about how what to do or what not to do yeah absolutely so base is being incubated inside of coinbase you know it's similar to the way other chains have been incubated inside of labs companies you know op Labs incubating optimism um off-chain Labs incubating uh Arbitrage one Anova um so we're we're incubating based inside of coinbase that operates as basically a startup inside of coinbase I'm kind of you know created it leading it day to day it's still really small Scrappy team um so we're we're just heads down building um but we're given a ton of autonomy uh kind of to figure out what does it actually look like to build a decentralized network out of a centralized public company that's the kind of like phase of crypto for much of the world um and there's no there's no prescribed path you know there's no answer it can't be you're gonna be the one to figure out for others to copy we're figuring it out so um it's definitely a journey but I feel super grateful to have you know I think having Brian Armstrong our CEO who's uh such a Visionary you know in 2016 he wrote this thing called the coinbase secret master plan where he was like there's gonna be four phases and the fourth phase is we're going to bring a billion users into the crypto economy to use millions of dapps and I think that like founder CEO energy who gets it and gets crypto and gets them wants it to happen and wants it to happen that's kind of what uniquely enables us to exist and uniquely it has enabled us to experiment for two years to figure out what's the path and I think now we're on a path that feels like it really can can make it happen um and he's still you know just there supporting believing um and helping us make it happen amazing so you've been experimenting for a lot of this on chain stuff for a couple years uh you try it out with the test net what made you kind of pick the op stack and and kind of what were things that you were considering in terms of kind of trade-offs and sort of how did you land on an OPI stack yeah we um so in the beginning of 2022 as we were kind of iterating through those products we um realized that we needed to decide how we were going to build kind of holistically for the business like there wasn't Clarity of like okay do we build on evm or rust or Cosmos SDK app chains so the first decision we made kind of in the first half of 2022 um for for all of coinbase was evm and ethereum uh because that's where we saw the most organic activity happening internally it's where we saw the most adoption externally tvl developers Etc I mean at that point we kind of identified um okay it's going to be evm it's going to be ethereum um but it's got to be layer two two because you can't do anything at coinbase scale on layer one it's just too expensive um and so that was first half of 2022. at that point we started working on just scaling ethereum period we were joined up with optimism uh on 4844 or Proto dang sharding we've been now working on on that contributing core engineering resources with other ethereum core contributors and that's going to scale Roll-Ups by you know 5 to 10x lower costs and then we spent the second half last of that year basically going out and talking to everyone and just trying to build a mental model for how is this architecture going to shape up like what's it actually going to look like two to three years from now five years from now and how do we want to fit into it and I think as we went through that process um we we kind of landed on a few things one is that we convinced ourselves that whereas we kind of started thinking that there was going to be just one massive L2 we kind of ended thinking oh no actually there's gonna be many of these things and so what's going to be really important is having interoperability between them and having kind of an open standard that enables them to scale together in like a mesh We Now call that thing super chain but you know when we first started thinking about it was like the mesh of layer too they're going to scale there one and then I think on the technology side I think we were um I think we're just really impressed with uh the op stack um it the we started working with the Bedrock version which wasn't the one running on optimism it's like v0 and you were really in the we were watching it but I think we started getting in there and we said whoa like this is not just an optimistic roll up it's really like uh it's a foundation that you know can support an optimistic approver but can also support a ZK approver as we're seeing with some of the new developments that are happening just in the last few weeks um uh it's built in a really thoughtful way there's really strong engineering team behind it um uh and it's open source and it's fully free an MIT licensed and that meant that we could just start experimenting we just started experimenting you know and like our lawyers were like great that's awesome don't worry about it you don't hear that sentence often right exactly it was rare it was um it was pretty cool like we literally launched a test net and I think in like a week um internally on the op stack on Bedrock um and so it was kind of that combination of the technology plus the open source nature of it and then as we started getting more serious um the two other factors I think really played into it was when you think about coinbase we are like uh you know obviously an important brand in crypto but we're also centralized business um public company and I think one of the things that was really appealing to us about the op stack was it gave us the opportunity to work with optimism Collective who's kind of at the other end of the spectrum like they are pushing the limits of decentralization of decentralized governance and it felt like bringing those two strengths together of like the centralized public company and the decentralized like leader of governance was just a really powerful combination in that there was like really nice kind of strength weakness fit there and then the other I think big big contributing factor was we've been working together for a year at that point on eip4844 scaling ethereum and so it was just a context where it's like we knew that we were in this together we love the technology it was open source we felt like there was team fit and kind of uh strength weakness fed um and we we knew everyone and it just clicked together it's been awesome really awesome and everybody can tell it's it's going well um super team is what we say one super team one super dreams guns oh we got to get the stickers of this or a t-shirt uh one of these days well both of those are in a way from an organizational standpoint at opposite ends of that Spectrum you kind of have lots of people on the centralized side that kind of powers going to business and gets more people here optimism is pushing the boundaries of what it means to be a massive decentralized Collective um how does bass fit in here how do you kind of think about decentralization here and kind of what does that mean to to you from the context of the chain and you mean on the technology side kind of like how are we just technology or even ethos but primarily technology yeah yeah yeah so and I actually talked a lot about this and my talk at UCC on Wednesday um but we believe that decentralization is absolutely critical for bass because decentralization is the key characteristic that enables us to build an open global economy like without decentralization we don't get an open global on-chain economy um and so no big Global online chain economy that enables all the things that we care about it enables you know stable currencies for everyone enables equal access for everyone regardless of where you're born enables stronger property rights uh so that is like why decentralization in terms of kind of like how are we pushing forward decentralization on the technology side it's really about decentralizing the op stack um we're doing a bunch of things there um you know one of the recent kind of announcements is that we're teaming up with Paradigm on Opera so we're going to be adding op support for ref and helping us get to a second fault prover with Opera so that's been a really cool collaboration that we're starting with George osen Team um you just talked about that 30 minutes ago even better yeah there we go we're coordinated um uh and then we've been doing a bunch of other things across the kind of like technology stack we built this whole open source model own toolkit called pessimism aptly named that's basically just meant to detect and respond to issues or anomalies in any op stack chain so base or op main net or Azure Network or public goods Network or any of the other ones that are coming and I think that felt like just a place where our strengths could shine like we have so much experience doing security and monitoring a coinbase this this is a really great contribution for us to make it it's already kind of surpassed all of the other monitoring tools for op stack chains so that's another really cool one and then another thing that we're working on right now with optimism is we're starting to design kind of the Next Generation Security Council that will do contract upgrades in a really secure way reduce single points of failure decentralize that that kind of uh process in a really substantive way and work across not just base but also op Mainland and also other chains that want to opt into using this single Security Council so that's really exciting on the technology side um so I might understand that so I think you kind of in a way indirectly pointed out something interesting so the seven Engineers that are there they're not just building things internally so that you can do this thing they're actually contributing back to the op stack yeah we joined as the second core developer of the op stack so amazing we're just building um that was that was kind of our commitment it felt like if we were going to use the technology um we had to give back to the underlying public good infrastructure and make sure that it was sustainable and make sure that it could improve and decentralize and scale and bring our best so that's what we're doing I mean this is well thank you this is great yeah we're excited people get to then use it and everybody is working and building and interacting with more safer code exactly I mean like we just right before we opened up uh base for uh midnight for Builders so if you're a builder you can go and Deploy on Base main net as of last Thursday uh mainnet for everyone's coming in a couple weeks um but before that uh we went through a whole checklist of things we had to kind of check off before we felt comfortable launching and one of them was you know a whole Suite of audits we did internal audits we did external audits with kind of a whole code contest and the really cool thing about that was those were like just extra like the nice to have yeah they're nice to have like the op Labs team had already run multiple dedicated audits they'd already run multiple internal audits they'd already run multiple code contests um and we were kind of coming in and saying okay let's just get more eyes more eyes and I think other teams that are building on the op stack are doing the same thing where it's like more eyes more eyes and in general I think that's how we get to confidence in the layer 2 technology stack it's like the more of us working on shared standards that are open source that are publicly available that are that are freely available like ethereum has kind of paved the way with their clients and I think the the safer more secure platform testing you can never do too much of it exactly exactly um so one of the super interesting things that when I took away when the announcement came out of Base as a project was coinbase effectively has 100 million plus users and one thing we haven't seen really well in the spaces yet we haven't seen distributions from people who are starting crypto projects protocols first and then trying to go to users you have the opposite problem or the direction is opposite a problem yet what's kind of the plan to introduce the 100 million people to uh to base and kind of how do you see that rollout yeah absolutely um I think this is the the big opportunity that we have it's like how do we connect up the bottom of the stack to the top of the stack and make it work really really well um and how do we make it incredibly easy both for developers to build applications on chain but then also for users to use them and you know obviously you know basis is an open ecosystem it's it's decentralizing you know we're working with all sorts of wallets you know rainbow and metamask and trust and coinbase wallet and coinbase and um frame and a bunch of others but I do think there's something really powerful about getting to just sit next to people building wallets and build a chain with them and so like a recent example of this is as we're we're working on mainnet and we're working on a bunch of uh kind of like what comes directly after mainnet how do we get people on chain I see some people in the audience here who've been collaborating with us on that um one of the things we said saw is like okay if you're an everyday person you're walking down the street and you see kind of like a wild posting or like a wheat paste you know those like cool signs in New York and there's a QR code and it says like okay something cool you scan it and you want to do that thing we were working through those flows and when you scanned it in coinbase wallet and you tried to do the thing there was 12 steps before you did the thing you had to like back up your seed you had to set a password you had to like set a username thing you had to accept face ID um and so just in the last month um we made it so instead of having 12 steps there's zero steps now you just scan the thing your the app opens and face IDs you and you have a wallet configured and then over time in the background will get you to set up a pin will get you to back it up if you need to if you overcome a certain balance um so I think like that kind of product work where it's just like how do we go from as a user I want to do a thing I have 12 20 50 steps that are confusing that take minutes hours to I am a user I want to do a thing and that thing just works I don't have to make a complex chain decision I think that's that's my primary focus right now and not to mention stuff around bridging assets if you're on different chains for a lot of these things so okay that's really good to hear you already set the the developer main net access kind of went out two weeks ago may not very soon very soon what are you worried about what am I worried about um you know I I think it's always a little scary I mean always a little scary I don't know this is the first time I've ever launched a network which I have no idea um no your real name the way I feel is kind of like the the the day before the hours before you're throwing a party you know or like a conference or like anything where it's like you have all the RSVPs like we know the people are coming but like are they really gonna come like that's what keeps me up at night you know it's like all of the final just like crossing the ah T's dotting the eyes making sure that we're doing everything we can to make you know the the day one experience and the week one experience and the month one experience really great for folks um and we're gonna try our best uh we got a lot a lot of fun things cooking but the thing that I also kind of tell myself when I'm uh lying awake in bed is it's not it's not about the first week it's not about the first month this is going to be a Year's Journey um and this summer on chain summer is the beginning of that Journey uh and it's a moment where I think we're going to start turning the tide and start growing the pie in a really material way but ultimately it's going to be years of hard work from the base team from the coinbase team from all the people in this audience to bring a million developers and a billion users and then eight billion users on chain and I think it'll be done by the end of the decade and you know I'm an optimistic I I loved Eli when you asked him I was like what would I say to that question and literally verbatim I would have said the same thing first thing it's like I'm uh pretty right on the things that are going to happen but I'm usually way too optimistic about the timeline on which they're gonna happen so maybe let's Force some some measurable predictions two years from now what does that look like for a base or the the overall L2 ecosystem from your perspective yeah I think that I think that two years from now so two years from now is like middle of 2025 you know I I think that will be past 100 million people who are on chain um and I think we'll be like working our way towards a billion people who are on chain I think one of the things that um is makes that feel a little more aggressive than I think it actually might be is that kind of our industry is um we're a little bit traumatized by a decade of kind of flat growth right we've had like flat usage of crypto with some spikes because of price but if you look at traditional kind of consumer product adoption curves that's not really how it works right system week over week month over month consistent week over week month over month growth right like that's how Tick Tock went from a small thing to billions of people that's how open Ai and you know chat gbt went from Windows got 100 million users how coinbase got a little kind of an equipment it was more correlated with the spikes I see yeah um but I I think that at a certain point it's going to change right and on chain and the platform that exists here is going to um start doing consistent week over week month over month 10 to 20 growth and it will not stop until literally the entire world is on chain and I think that that moment has probably started like literally just in the last six months or the last three months when I look at the like way I'm transacting and interacting on chain when I look at the applications that are starting to be released on chain um I feel like we've hit that inflection point and now it's just gonna be the growth phase and so maybe I'm off by six months I'm not sure but at some point definitely before the next two years um we're gonna stop being in this like when will it happen phase that we've been in for whatever 13 years 14 years and we will start being in the whoa It's Growing and I was talking to someone I was talking to someone on the optimism team because we were running around conferences you know we're I'm like in Paris trying to meet everyone but then also trying to keep our mainnet launch On Track and feel like my brain is literally melting and uh what I said to her was it's freaking crazy right now but we're not even really growing right like if you look at the rate growth rate of retainers like we're retaining but it's flat real growth like the three months four months six months of coinbase from you know April 2017 to the end of 2017 we grew a hundred acts in six months that is just like brain shattering and so I think that at some point in the next two years we're just going to hit that and it's going to not stop until we get to 8 billion people and that might take a few years but it's going to be like one of the craziest roller coasters I think all of us get to go on together that's a perfect note to end on thank you so much yeah thanks y'all for having me all right well this was the end of our first half of today so please enjoy the next 10 for 15 minutes of break and then we'll start serving lunch downstairs thanks everybody