The Delphi Podcast

Jesse Pollak: Coinbase Launches Base - An Ethereum L2 Accessible To 100 Million Coinbase Users

Mon Jul 24 2023

Coinbasebaseon-chain platformdeveloper platformscaling EthereumoptimismOP Stack L2crypto economy

Description

Coinbase is transitioning from a centralized exchange to an on-chain platform with their project called base. They faced challenges in deployment and product-market fit, leading to the decision to build a developer platform. Base aims to enable new consumer experiences and connect users from the off-chain world to the on-chain world. Coinbase is working on scaling Ethereum and collaborating with optimism. They are also transitioning to Optimism (OP) Stack L2 and creating a developer platform that contributes to the growth of the crypto economy.

Insights

Coinbase's Transition

Coinbase is shifting from a centralized exchange to an on-chain platform with their project base. They faced challenges but are now building a developer platform to enable new consumer experiences.

Collaboration with Optimism

Coinbase collaborated with optimism, impressed by their technology and decentralized governance. They chose optimism over ZK partners and are committed to a long-term collaboration.

Transition to Optimism

Several teams are switching from Layer 1 (L1) to Optimism (OP) Stack L2, driven by the desire to align with Ethereum and reach more developers. Coinbase is dedicating resources to building Dapps on base and creating space for external developers.

Creating a Developer Platform

Coinbase aims to create a developer platform that enables more useful things to do in crypto while still being a trusted interface for users. Base aims to be a bridge, connecting users from the off-chain world to the on-chain world through Coinbase products and experiences.

Summary

Transcript

Introduction

00:06 - 06:57

Jesse Polock is the founder of Coinbase's base.
Coinbase is transitioning from a centralized exchange to an on-chain platform.
They have been working on various on-chain products, but faced challenges in deployment and product-market fit.
As a result, they decided to build a developer platform called base to enable Coinbase to come on chain and bring the whole world on chain.
Base was launched in February of this year and is heading towards its main net launch soon.

Challenges and Successes

06:29 - 13:32

The failure of the base project led to a decision to allocate resources to other parts of the cloud business.
A test net for a layer two was launched as an experiment and proved to be successful.
Base aims to differentiate itself by enabling new consumer experiences in various industries such as music, media, gaming, food, advocacy, and politics.
Examples of projects being built on base include a restaurant loyalty platform and a chain card game.
Base's connection to Coinbase's large user base and assets is seen as a great starting point but requires building great products on chain that people want to use.
The success of base depends on working together with Coinbase and other teams to create excellent products while maintaining Coinbase's strong brand image.

Building an Open Global Economy

13:11 - 19:37

Coinbase aims to build an open global economy through decentralization.
Base, Coinbase's new project, will be open, permissionless, and decentralized like Ethereum and other chains.
Coinbase will continue to curate trusted apps on base while making the user experience easy.
There is a balance between curation and openness that Coinbase is working out.
Coinbase already curates apps on its platform and will continue to do so for base as well.
The decision to build on Ethereum was based on adoption, developer activity, and decentralization.
Coinbase is also working on EIP-4844 or proto-dank sharding to lower roll-up fees by upgrading Ethereum.
Coinbase believes there may be multiple layer two solutions that run in parallel and interoperate with each other.
By building base, Coinbase contributes to scaling Ethereum by providing capacity to the network.

Collaboration with Optimism

19:10 - 26:05

Coinbase decided to launch base as a contribution to scaling Ethereum by building one of these chains that provide capacity to the network.
Coinbase collaborated with the optimism team and was impressed by their technology and open-source approach.
The optimism team felt complementary to Coinbase, with their decentralized governance and focus on Ethereum scaling.
Coinbase chose optimism over ZK partners because they believe in the flexibility of the OP stack, which allows for both optimistic and ZK provers.
The optimism foundation published a request for proposals for teams to build a ZK prover for the OP stack, creating an environment for innovation and parallel development.
Coinbase is committed to a long-term collaboration with optimism, contributing revenue to fund public goods and participating in system processes.
Other teams have also joined optimism's OP stack, including Zora, Gitcoin, Celo, and more.

Transition to Optimism

25:37 - 32:15

Several teams are switching from Layer 1 (L1) to Optimism (OP) Stack L2.
The transition is driven by the desire to align with Ethereum and reach more developers.
Choosing OP Stack is based on its great technology, open-source nature, solid team, and decentralization story.
Technical decentralization of layer twos in the OP stack is a priority for Coinbase.
Building incredible products with aligned teams is crucial for adoption and bringing more people on-chain.
Coinbase is dedicating resources to building Dapps on base but also creating space for external developers.
Coinbase launched Basecamp and Base Bootcamp to educate and train smart contract engineers.
Navigating decentralization within a big public company is challenging but Coinbase has developed a neutrality framework to address it.

Creating a Developer Platform

31:54 - 38:19

Coinbase is focused on creating the social and technical systems that make decentralization possible.
Coinbase expects to earn some small amount of fees from operating the sequencer on the network, which may cover the cost of infrastructure and team.
The opportunity for Coinbase lies in creating a developer platform that enables more useful things to do in crypto, while still being a trusted interface for users.
Coinbase looked at launching a chain twice before but felt it would be disconnected from other parts of the crypto economy. This time, they can build a chain connected to Ethereum and other L2s through open source technology.
Base aims to be a bridge, connecting users from off-chain world into the on-chain world through Coinbase products and experiences.
Builders can start building on base today, with plans to open up the mainnet in the next few weeks.
The goal is to grow the crypto economy and increase economic freedom globally.