Coinbase launched Base, its new blockchain, at the end of July, and it has already become a major player among Ethereum-based layer 2 chains.
On September 21, for example, the chain jagged about 677,000 transactions, with 870,163 “new addresses seen,” according to Etherscan.
In comparison, Arbitrum, a leading layer 2 that launched in June 2021, had 925,000 transactions and 54,233 new addresses on the same day.
Base now hosts hundreds of decentralized projects, Jesse Pollak, head of protocols at Coinbase, told Cointelegraph at Messari's Mainnet conference in New York City on Wednesday, September 20, including decentralized inflation oracles, restaurant rewards projects, an insurance aggregator and everything you need. between.
Pollak, a major force behind the Base project, sat down with Cointelegraph on Mainnet for a Q&A session covering Coinbase's vision for its new platform, the growing promise of decentralized applications (DApps), and the evolution of the technology. blockchain.
Cointelegraph: You have said that Base was created with a “clear vision: incorporate the next million builders and billion users into the chain.” Those are big numbers. How long will it take them to achieve it?
Jesse Pollak: It's less about Base specifically and more about a billion users joining the chain and embracing the power of this new platform. [i.e., blockchain] that is transparent, open, global and that develops applications that can improve people's lives. Obviously, the base is going to play a big role in that, but it's much bigger than just us. We really see our role as helping to grow that pie.
CT: And the timeline?
Japan: I see this happening in this decade, i.e. one million developer jobs by 2030. There have already been massive changes in the 2020s, not just in the industry but around the world. It will happen faster than people might expect.
CT: What remains to be done before we see widespread adoption?
J.P.: Three high-level things need to happen. First of all, we must make the use of these applications that are being created cheaper. We have achieved the first orders of magnitude of cost reduction with Base. Using the same app might have cost $5 or $10 and now it costs 5 to 10 cents.
But we don't think it's enough. We really want to reduce it to the point where the cost is almost imperceptible to users.
Second, we want to make it easier for people to use these apps. A lot of that is building better wallet experiences.
Third, we need to have better on-chain identity infrastructure. Today, most consumer loans in the United States and other developed countries are unsecured loans in the form of credit cards or buy now, pay later agreements. And almost none of this is possible now on-chain because we don't have trusted identity systems.
So to enable that next wave of big use cases, we'll need lower costs, better wallets, and better identity.
CT: You've said that what most people have done with cryptocurrencies so far is speculate on the cryptocurrency markets, and it's time to move on. Has it been a mistake to focus so much on the market price of Bitcoin, say?
Polish: I don't think it's wrong if you look at the way technology life cycles evolve. Carlota Pérez, for example, writes that financial bubbles are almost inevitable when there are significant technological innovations such as the Internet or electricity. You have this S-curve of adoption. [See chart below.] At first, much of the innovation is driven by speculation, as people see potential in the technology. This speculation attracts capital, which essentially funds innovation and ultimately creates world-changing impacts.
CT: Where are we now?
J.P.: We've reached the point where it's time to get out of it. [speculative] phase and in the phase of really providing utility to ordinary people. The infrastructure is ready.
Even two years ago, if you wanted to use an app on Ethereum, it cost you $5, $10, or $100. That's simply not something that supports creating everyday use cases.
CT: Speaking of Ethereum, why did Coinbase decide to build its layer 2 on the Ethereum blockchain? Have you ever considered using another main network?
Japan: In fact, we looked at building a chain three times: in 2018 and 2020, and then more recently in 2023. And the first two times, we looked at building an alternative layer 1, one that would have been competitive with Ethereum. Our conclusion was that we did not want to locate ourselves on an island disconnected from the rest of the ecosystem.
The third time, we looked at all the options: Ethereum, alternative layer 1s, layer 2, etc. What seemed natural to us about Ethereum was that it is the largest crypto ecosystem by value, by activity, by developers, by order of magnitude. or two, so by building Base as a layer 2 of Ethereum, we could contribute to scaling Ethereum and be part of this ecosystem that is bigger than us.
CT: What about Ethereum's much-discussed scalability shortcomings, including network congestion and sometimes skyrocketing fees? Have they largely been solved by extensive use of layer 2 rollups like Optimism and Arbitrum (and now Base), where transactions are "bundled" and added to the mainnet in a single batch?
Japan: If you look at the history of Ethereum, the original vision was: we will do all this at layer 1 and scale up through sharding. But around 2020 and 2021, when layers 2 emerged, the Ethereum community and core development groups basically said: What if we changed our strategy and instead of trying to introduce all this complexity into layer 1, let's build the infrastructure to enable innovation at the layer? 2?
That was something that Vitalik [Buterin, Ethereum co-founder] I wrote a lot. And for the last two years, that's what happened. Coinbase supported an initiative for the last year and a half called EIP-4844for example, which introduced data availability for rollups, resulting in reduced fees and higher transaction throughput.
But do I think we have solved the problem? No. These things take years to resolve, and I think we're two or three years into those investments now, and potentially another two or three years or more to go. But I think we have made a lot of progress.
You can see this in L2Beat. [See chart below]. Two years ago [Sept. 21, 2021]there were eight transactions per second [on average] in layer 2 and 13 TPS projects on the Ethereum mainnet. Today, there are 58 TPS on layer 2 and 11 TPS on the Ethereum mainnet. So we've gone from less than 1x to 5.7x faster in two years.
CT: Are you surprised that a “Trendy” social media DAPP — Friend.tech — was Base initially the top performer after its summer launch? His fees exceeded $1 million in a 24-hour period. Still, perhaps this wasn't the serious use case some critics were hoping for.
Japan: Well, when the first social apps were released on the Internet, some people looked at them and said, hey, these things are toys. When are we going to do serious things like put newspapers online? If you look at where we are today, billions of people use social apps every day. They will continue to be a way for people to connect and social apps will play a key role in the chain.
The powerful thing about this next generation of on-chain social applications is that they will allow people to have sovereign ownership. They will still own their creativity and will still be in control, instead of the big corporations that control them now.
CT: Can you tell us about a DApp launched on Base that you're excited about?
Japan: Check out Blackbird, a customer engagement platform for restaurants. You walk into any participating restaurant, touch your phone and it instantly knows who you are. They personalize the experience for you. Regular visitors can earn rewards. It's currently in 10 or 15 restaurants in New York City, but will soon expand to California. A lot of people are talking about it on Twitter.
CT: Where will blockchain finally find its “killer app”: doing for the cryptoverse what email did for the Internet? Or in your opinion has it already arisen?
Japan: There won't be one great app. There will be many amazing applications. We're starting to see some of them emerge. The one that has the most adoption in the real world is stablecoins. If you look at the total stablecoin transaction volume over the last year, it is a huge number. It will be a great driver of economic freedom in the next decade. It gives people in places like Argentina or Turkey access to a stable currency like the US dollar.
But stablecoins will not be alone. We will see many on-chain applications that will improve people's lives.
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