WTF is a Layer 2? | Jesse Pollak, Coinbase

[00:00] So there's a lot in here and you'll hopefully learn a lot and come out a big fan of Jesse and Coinbase and Boys Club. So win, win, win. [00:08] Really? [00:09] Coinbase, sponsor us. Thanks. [00:31] Hi. [00:31] Dina. [00:33] Who is Boys Club? [00:34] Boys Club is a community of people who... [00:38] or thinking about the new internet and do that together in a group chat. [00:42] With a shared bank account. With a shared bank account. Yeah. [00:45] And this is our podcast, one of our podcasts, one of our many podcasts. [00:48] Today we had Jesse Pollack. [00:51] from [00:52] Coinbase. [00:54] and base and stand with crypto. [00:56] on the pod. [00:58] Jesse is an engineer. [01:00] And... [01:01] I couldn't help but start the conversation by talking about this as well, just because it's such an insecurity that I feel the need to overcorrect and talk about it all the time. [01:09] Whenever we have engineers on the podcast, I feel really insecure about it because... [01:14] I... [01:15] feel like so much is revealed in what [01:17] I don't know about how this whole world that we are inhabiting works. [01:23] and that there will be a dunk moment where someone's like, you don't know. [01:28] this protocol interacts with this other protocol in that way. And of course, that's

[01:33] Not at all. [01:34] Zero. What, Jesse? Brought zero of that energy. Zero of that energy. But I will say that's not all engineers. That's not all engineers, but he... [01:41] was so generous. [01:43] So generous. With his explanation. So kind. [01:46] It was recommended to him. [01:48] prior to the podcast to not mansplain, which is an incredible recommendation. [01:55] And he delivered on that. No mansplained energy at all. Zero. Just like chatting, having a good time. Really enjoyed it. I learned a lot. I have... [02:04] been working in crypto now 18 months and i don't know what a layer two is and i brought that i felt like i was in like a [02:10] Catholic confessional. I had to bring it up immediately at the beginning. [02:15] And we got into it and now I feel so much better. I feel like a weight off my shoulders. [02:21] *puff* [02:22] Um, and so it's great. You'll learn about layer twos. You'll learn about what is energizing to Jesse about what's possible in the space, what's possible for creators and for commerce and like stuff like that, what some of the work Coinbase is doing. So hopefully you'll learn a lot and enjoy it. [02:46] Jesse Pollock is the creator of Base and he is the head of protocols at Coinbase. Jesse has also been involved with building Coinbase Pro and Coinbase Wallet and he's also up to a lot of other cool things. Welcome to the show, Jesse. [03:00] Thanks for having me. Excited to be here. Hey, y'all. [03:02] We're excited to have you. I do feel a little nervous because I feel like

[03:07] how stupid I am around this stuff is really gonna shine in this episode. I was prepping for this pod and I was like, "Oh shit." [03:14] Yeah, well, my number one thing that I always say in every conversation is there's no stupid questions. Great, great. And like... [03:20] This stuff is... [03:22] It's crazy. We're rebuilding the entire internet world and there's a lot of complexity wrapped up in there. [03:28] Okay, so Jesse, we're going to play explain the tweet with you. Yes. Explain the tweet is when we ask our guests [03:34] to explain a tweet that they did that either was like really popular or just totally inscrutable. I have no idea what it means. I'm hoping it's the former, not the latter. [03:46] For you, we chose one that is your pinch tweet. So we know that [03:51] you're proud of this moment and i just want to come in saying [03:55] I'm not tracking, so I'm excited to hear where we go. So the tweet is on chain [04:01] is the next online. [04:03] Hmm. [04:04] Natasha, what's your level of comprehension in this week? Okay. So, like, spiritually, I'm, like, excited about this. I'm like, okay, we're on the bleeding edge. But... [04:13] the first thought that comes to my mind is, well, on-chain is online. [04:18] So, [04:19] How do we deal with that? [04:20] What this tweet means is [04:22] Basically, if you think about [04:24] the early 2000s, there was this moment [04:27] where the internet was coming. Some people knew that the internet was coming, but a lot of the world didn't know that the internet was coming. The internet didn't replace our offline world. [04:36] it built on top of our offline world, but it enabled new experiences.

[04:40] And in the beginning of the internet, people would say things like on Dashline, [04:45] and people would say things like "e-mail" [04:48] And people would say things like, I'm going to send you an e-mail when I connect on dashed line with my 20% [04:55] 4-kilobyte internet connection via AOL. And then we got through that phase and everyone was like, "Oh, wow, actually the whole world just got transformed by the internet." [05:05] and now we all live online and there's no more on-line. [05:09] If you wrote that you would be like [05:12] booed out of the room. Yeah. And I think what this tweet is trying to convey is we're kind of in a similar place right now. [05:19] Where with crypto, it's hard to say it's early days because we're 10 years in, but we're still in those like [05:24] moments where it's not abundantly clear that crypto is going to change the entire world and that everything's going to be rebuilt on top of crypto. And so people write things like on Dash chain [05:36] And... [05:37] What this tweet's trying to say is like, [05:40] Maybe people don't know it, but in five years, it's not going to be on NASHCHAIN, it's just going to be on-chain. And yes, on-chain is online, but on-chain is going to be the foundation for all of these crazy new experiences that all of us are going to get to be doing every day for the rest of our lives. [05:55] And let's live in that future now. [05:57] instead of waiting for that future to come. And so it's [06:00] If you go down deeper in my tweets you'll find me just like fighting the on chain wars [06:07] where I just reply to people who write on-chain, what do you think about on-chain? One word.

[06:12] I think it's really just about like [06:14] trying to pull us into the future, right? We are at a similar inflection point where the world is starting to be transformed. And if we start to step into that and say, hey, it's, [06:24] It's here. How do we live that? How do we feel that? How do we experience that? That's powerful [06:29] way of making it come true. [06:31] What I'm hearing from you is that it's layered. So the top layer is we have a stylistic [06:37] an editorial choice, which is that you believe we should be removing the dash. [06:42] Yes, strongly. The style guide of Jesse Pollack says, let's remove the dash whenever we're saying on chain. But what I'm also hearing is that it will be our native space. [06:50] Yeah. And [06:51] we don't need to other it as much as what we're doing now. Is that accurate? Yeah, yeah, that's exactly right. It's going to become the platform like people build apps on. [07:01] it's going to become a part of everything. [07:03] I love this vision. I'm inspired. I am curious when you think about [07:07] THERE WAS -- [07:08] Okay, early 2000s, there were all of these... [07:11] ways in which being online [07:14] completely changed people's lived experience that they never could have anticipated prior to that. There were businesses that were like internet companies, and then now every business is an internet company. [07:24] one thing that Dina and I think a lot about is on-chain commerce and how [07:28] having a footprint on chain with our listeners or with our audience, [07:34] what that can open up in terms of a commerce relationship with individuals later down the line. And so from your perspective, what are some things that you think this new on-chain world

[07:45] opens up for everyday people living their lives. [07:49] You guys are already on to it with the commerce stuff. I think the other one that I think about a lot is creator stuff. [07:54] if you look at the last 10 years of creators online [07:58] They've been given a huge platform, right? Like musicians can now reach billions of people through Spotify. Content creators can reach billions of people through TikTok. [08:07] the terms of that relationship are pretty one-sided. [08:11] right? Like, [08:12] musicians aren't making that much money through Spotify and they're like subject to Spotify. And like if they do something like create AI songs that Spotify or the record labels don't want, sorry. [08:22] that's off the platform. Content creators, they're publishing their work on TikTok. Maybe TikTok pays you, but like, [08:29] TikTok makes the decision about how much to pay you and they're optimizing for growing their profits, not for growing your profits. [08:36] as the creator. [08:37] And I think that [08:38] this is going to be one of these huge shifts that happens on chain where [08:43] that relationship is renegotiated. [08:45] and instead of that relationship being a one-sided relationship, it's actually going to be a relationship that's two-sided, and, you know, platforms and the people who want to kind of aggregate all this content are going to have to start to [08:56] negotiate with creators who are going to be publishing on-chain, who are going to be putting their content on-chain, who are going to be using that to make more [09:03] money for themselves. We're going to be using that to have more autonomy, to have more direct connections with their fans and people who want to engage with them. And the big companies are going to have to [09:13] come and negotiate with us. That for me is probably the thing I'm most excited about.

[09:18] is the next generation of [09:21] taking all this incredible [09:23] brilliance that we've unlocked over the last 10 years. And instead of just running it through corporations that like suck out 90% of the value and leave us the scraps, [09:32] like giving 100% of the value or 90% of the value to the people [09:35] and then see what the people do with 90% of the value. [09:39] I think it's going to be pretty awesome if we look at the history of what happens when [09:43] people who are creating incredible things are given more resources and are given more autonomy. Like it leads to more brilliance. That's why I wake up every morning and think about it. There's so much in that that I would [09:54] I love to unpack. I think the thing that stands out for me most distinctly is that you're [10:00] clearly a protocol level thinker. And I think that that shines through. And I think what you're speaking to is really... [10:08] How do we set up the sort of rails and the plumbing around how this new world is coming around? [10:15] to be in a way that [10:18] the sort of pathway from [10:19] user or end user or consumer to creator is... [10:23] unfettered [10:24] by corporations does that feel true to [10:27] What do you think? Mr. I think that's exactly right. And how do we also make it so that those tools are just [10:33] available to everyone, everywhere. You don't need to be in the United States to access those tools to reach the global audience. [10:39] You can do that from anywhere in the world. I think, again, it's a thing where we've had some of those components in the online world, [10:45] But like, for instance, money has been a really hard one to make available to everyone, right? You can't necessarily be anywhere in the world and start accepting payments for commerce.

[10:54] Like, [10:55] Imagine you guys have some experience of that, of trying to accept payments from all over the world, or trying to be in some other country and get payments from somewhere else. That's super hard. [11:04] with this new platform that's emerging [11:06] Everyone's gonna be on a level playing field. [11:08] and it's going to create all this brilliance. It's going to unlock all this brilliance. It's already there. [11:12] but is currently just hampered. [11:14] and like [11:16] nitpicked at every turn and instead it's going to be opened up. [11:21] Okay, let's talk about bass. [11:23] So I want to use this opportunity [11:27] to learn really quickly [11:29] deeply in my soul what a layer two is we're five years old what's a layer two [11:34] Yeah, the way I think about this is [11:38] Imagine that there's an app store [11:40] And you go into the App Store and every time you want to do anything in an app, it costs $5 to do it. [11:46] How much would you use that app? Layer two is the solution to that. It's basically like, okay, let's take all the apps [11:51] that have already been built on layer one Ethereum. So this is the NFT minting apps, and it's the trading apps, and it's the lending apps, and it's the USDC app. All of those things that have started to be built, which are fundamentally a new kind of app, [12:05] that are available to anyone in the world [12:08] on a totally level playing field, like exactly what we're talking about with creators, where the terms are set by the people who play. [12:13] create, the access is global, but today they're very, very expensive. [12:19] Let's take those apps [12:20] and let's just make them available at a hundredth of the cost. [12:23] Because if instead of paying $5 every time you were going to do something, it costs $0.05, it's still a little bit of pain in the butt to pay $0.05 every time. But you're like 100 times more likely to do it. Basically, we're just taking the same apps.

[12:37] and we're putting them in a scaling environment that makes them 100 times cheaper. The really powerful thing to know about the layer 2 versus layer 1 is it's not like you have to rebuild the app to put it on layer 2. [12:48] It's the same app. [12:49] It's just deploying it to a new place. [12:51] And so this is one of the really powerful things. Base is a layer too. So we're one of the places that takes those really expensive apps that people want to use and makes them 100 times cheaper. But the incremental cost for someone saying, hey, let's make it 100 times cheaper on Base is not [13:05] Okay, let's spend six months rebuilding our app. [13:07] it's like let's press the button that's like let's put this on base 2 and then it's 100 times cheaper. And then if there was like another layer 2, you could be like oh let's put it there too and it'll be 100 times cheaper. And all that's going to be the same code. [13:20] It's the same work product, but it's going to be put in a new place that's 100 times cheaper. [13:26] What has always been confusing to me about L2s is... [13:30] Am I transacting in [13:32] ether and how do I get on and off? [13:35] that layer too. [13:36] The easiest way to think about it, I think, is that it's the same, right? Like you're transacting Ethereum on layer one, you transact in Ethereum on base. It's just 100 times cheaper. [13:46] That's kind of our starting point in terms of how you actually get money onto base. [13:49] I think what we are seeing and what we expect to see happen is people will just [13:54] start on base. [13:56] and other layer twos. [13:57] So if you're like, hey, I want to go mint an NFT or buy some crypto, you're going to buy Ethereum to mint your NFT, and that Ethereum will just be on base. And that's going to be facilitated by some on-ramp, like a Coinbase or like a Rainbow with an embedded on-ramp that just makes it so you can put in your credit card or do Apple Pay, and then your money is going to show up on base.

[14:17] And so that native 2L2 experience, I think, is what our expectation is going to be for the vast, vast majority of people. [14:26] the other alternative is you start on layer one so you like put your money on layer one and then you do what's called bridge to layer two which is like you move it from layer one to layer two [14:36] But A, that's going to be really expensive, because you have to pay those $5 to do those actions on layer one. But then B, it just adds a ton of complexity. It's exactly what we're talking about here. It's like, what's this layer one thing? What's this layer two thing? And again, the magic of layer two is it takes the same apps [14:53] and it makes them 100 times cheaper. [14:54] And so for [14:57] 99% of people just giving them access to the apps [15:01] and making it so they can go from "I downloaded this app" to "I'm using this app and it's cheap and easy" like all of that's going to happen natively on layer 2 [15:11] And then if folks [15:13] build up their sophistication or whatever it is and they say, "Hey, now I want it for some reason to go to layer one or I want to go to another layer two." Like they'll still have the tools to do that, but that's not going to be where they start. It's just too, it's too complex. [15:23] I buy an NFT [15:27] on a DAP that's built on base. [15:29] whatever, there's a [15:31] a zaddy NFT that you buy and it's and it's the DAF has been built on base. So you're like, OK, I'm in a I'm in a base ecosystem over here. And the NFT is now in a little base ecosystem. [15:42] I want to send that NFT to my friend who [15:46] just has a

[15:47] wallet that's not been built on base. [15:51] Do I need to find some pipeline to get [15:55] the on base NFT to her? Well, it's a two thoughts on that. One is if your friend has an Ethereum address, that same address will work on base. [16:04] And that's, again, the magic, right? So you can deploy the same apps, but you can also have the same addresses. So you could just send her the NFT on base. [16:11] and it will show up in her wallet. The wallet needs to support base, but increasingly we're moving towards the world. This is the second point. [16:18] where [16:18] Layer 2s are going to be just as well supported as Layer 1. There's going to be a bunch of these Layer 2s. [16:23] And so it may be that you send her this NFT and it's on base. [16:27] and then Natasha sends her another NFT and it's on optimism. [16:31] And she'll be able to see both of those in her wallet. And it might have a little sign that says, this is on base. And this is on optimism. But I think increasingly, for the everyday user, [16:42] they're just not going to be thinking or worrying about that. It's like this is all on Ethereum, [16:47] Ethereum has multiple layers. There's multiple layer twos, but they're all secured by the same infrastructure. It's all secured by Ethereum. And I know that I can receive an asset on Ethereum, whether it's on layer one or layer two, whether it's on base or optimism with this wallet. [17:02] Okay, so what I'm hearing... [17:04] from you is me as a consumer, a crypto consumer, [17:09] Who... [17:10] doesn't, [17:12] dig in that much to [17:15] what I'm doing. Like, I'm like, I like this thing. It's cool. I'm on this app. It's interesting. Like, I'm not...

[17:22] I don't think about the tech that much. She's not in the stack. I'm not in the stack. Not like deep. [17:28] I'm not deep. I'm as shallow as possibly can be. And I'm... [17:32] And I'm loving it and it's so fun because of all the stuff that's being created around it. [17:36] I probably wouldn't [17:38] even [17:39] know necessarily that I'm, especially if my world is Ethereum, I wouldn't even really necessarily know that it's base versus another layer too. Yeah, yeah, exactly right. We're in this weird moment right now. And [17:52] it's been where it's been for the last five years where it's like, [17:54] Every time someone wants to do something, it's like, hey, [17:58] Do you want to do this thing on [18:00] AWS or Google Cloud Platform? Yeah. [18:03] Which is like crazy. Could you imagine if every time you opened up TikTok, TikTok was like, would you like to run this TikTok on AWS or GCP? [18:11] So we're moving out of that phase, right? That's been a phase that has allowed us to build all these use cases. [18:18] And it's worked for like... [18:19] the hundreds of thousands of people who use crypto today [18:23] like it's kind of worked for them honestly. But like in the next phase, that's a ridiculous idea. Right? That that would be the experience that most people have. The experience that most people are going to have in the next phase is like, [18:34] here's this cool thing. [18:36] Done. It's done. I did the cool thing. I didn't have to pick whether I was going to do the cool thing here or there and analyze like, [18:44] what are the different implications of doing it here or there? That was actually how I was making sense of it in my mind was [18:50] Yeah, there's some websites that I interact with all the time that are on Amazon Web Services, and there's some that are on Google Web Services. And I have no idea, and I never think about it. And, like...

[18:58] The only reason I knew that is because at one point in my life, I was building a product. Otherwise, I would have no idea that there were those two types of things. Yep. So that that brings it to life. [19:06] Yeah, and I think that's the same way the Internet [19:08] is and was. We are connected via, you know, Riverside right now doing this internet thing, but that's a series of layers. There's the tier one ISP and the tier two ISP. [19:19] But all of that is [19:20] not something that we think about. But like in the 90s, [19:23] this was the thing that they thought about. People had to be like, "Which path am I going to take to get to you in the Internet?" [19:29] And [19:31] We're going to go through the same thing. And all of us have to reckon with this unfortunate reality. Or not unfortunate, just the reality of where we are today. But I think increasingly, and really with base, this is our goal. Listening to this, I'm... [19:44] very bullish on on L2s. [19:47] But what would be... I'm like, why is everyone not building 1L2? It seems like... [19:51] Yeah, what's the trade off? Yeah, I mean, I think most of what we see from a pushback perspective is like the L2s don't have the same level of tooling, infrastructure, ecosystem in order to make them easy to build it. [20:02] let's say boys club was like we want to start boys club on l2 instead of starting on l1 that would be [20:07] cheaper for you as the founders of it, it would be cheaper for all of your participants, but if none of the tools that you use to start Boys Club [20:15] were available on the L2, that it's practically impossible. And this is kind of this intermediate phase that we're in right now, where like L2's only started being a thing two and a half years ago. [20:25] And they've only started being really viable from a kind of infrastructure perspective in the last year.

[20:33] Finally, we're getting all those same pieces of infrastructure, those apps, [20:37] deployed there so people can actually build and use them. I think that's going to be the next year or so. And then it's going to be like, oh, this is, [20:44] as good or better than the L1. [20:47] Everything's going to start being built here. [20:48] okay that makes sense and I think that makes sense as to why we haven't [20:53] encountered it as a decision that we've had to make yet because the [20:57] tooling isn't quite there [20:59] to support the things that we're looking to do with it. But what part of how you explained L1s when you start was like, you can [21:07] easily deploy onto an L2. [21:10] So why hasn't [21:11] all these dApps just flip the switch over to L2s yet. [21:15] Yeah, and a lot of them are flipping the switch over to Altuz, right? Like if you look at the OpenSea, all these things are starting. [21:23] But it's easy, but then it's also, it's not zero, right? Like you still have to hit the button, right? And like if you're an organization who has a million buttons to hit of all the other things that you have for you. I'm just like, you restart the computer, that's all. [21:37] No, exactly. So I think it's happening. [21:41] It's happening and then there's like the complexity of if you start on layer one you have to move some more things to layer two like you guys have your community there So it takes a little bit more work for you to do that. So like you know, this is all just a process but I think what will start to happen is a like a Quorum of all that infrastructure is almost there now for layer twos and then B I just think that increasingly people are going to be

[22:06] be natively layer 2 rather than natively layer 1. For all of us who have been in crypto for a while, we had to be on layer 1. [22:13] because that was the only thing that was available. But soon, people are just going to be on layer 2, they're only going to be on layer 2, they're never going to think about layer 1, they're going to start the new [22:21] you know, Boys Boys Club, [22:23] on layer two and [22:25] they're not even going to have to worry of like, oh, we have to, [22:27] press another button and it's just like no this stuff just works. [22:30] I'm always struck by like [22:32] Yeah. [22:33] How many of the things that I get stuck around in crypto... [22:37] are [22:38] conversations that are happening because [22:41] everything's in its like still in its infancy and it's still nascent and trying to figure itself out and [22:48] There's also the spirit of like building in public and talking about it openly and working through the problems together and all of [22:55] The upside of that is great because people can then do their things and learn from each other and whatever. But if you're a passive consumer of crypto or if you're into crypto but you're not building a dApp or deeply technical, I'm struck by how much of the conversation is around building and developing and all of these different things that... [23:15] I'm listening to this conversation and I'm like, oh, it actually doesn't matter that I know what a layer to. Like, that's what I'm struck by in a really positive way where I'm like, great. If I was building a DAP, like then I would need to be considering these things. But. [23:26] Mm-hmm. [23:26] It's really encouraging to me and actually makes me much more excited about the future of Web3 and crypto because... [23:33] It's... [23:33] it's back to really what you were saying at the beginning of [23:36] How are these tools...

[23:38] unlocking greater creativity for creators, what type of new commerce experience is it opening up, and all of the other stuff that I get really stuck in. [23:46] doesn't really matter and in five years or ten years or whatever it may be we won't be talking about these same things and that's really that's exciting because it [23:55] it allows more people an access point in. So yeah, I'm tracking, I'm feeling encouraged. Yeah, you know, we're early. We're early. And that comes with a lot of this complexity and burden of having to know or wanting to know all these things. But I think you're exactly right. Base is kind of our bet of like, we can come and help accelerate that moment. [24:14] where for the everyday person it stops being "I'm scared" or "I don't know" or "I don't understand" and it starts being "Wow, I did this thing that I couldn't do previously and that changed my life." [24:25] and [24:26] That's what it's all about. It's just making it easier, making it seamless, making it so that you don't have to choose between AWS and GCP. You can just do the things you want to do and that everyone can do the things that they want to do everywhere in the world on a level playing field. [24:39] that gives everyone the opportunity to live their best life. [24:44] So... [24:45] looking at base and... [24:48] what [24:49] I, as someone who's not a DJ and really likes about it, is that [24:53] there's this trust that I have in it because [24:56] I trust Coinbase. How is that experience of building [24:59] a layer two within this environment. Building base inside of [25:03] Coinbase is like greatest strength, greatest weakness. [25:06] you know, like it [25:08] allows us to

[25:09] reach that scale, reach the distribution, bootstrap off of that trust and the kind of foundation that Coinbase has built over the last 12 years. [25:18] But then we're building a decentralized open network inside of a centralized Fortune 500 company. Yeah. And like, let me tell you, that's not it. [25:28] I woke up this morning so stressed. [25:32] Every morning. You know, just like, you know, and like candidly, like I [25:38] When I changed my role in 2021, [25:40] Because I've been doing all the consumer facing stuff, Coinbase, Coinbase, Pro, Coinbase, [25:45] I thought I was going to leave because I wanted to go get into it. I wanted to be in it, build some cool crypto things and push the industry for it that way. [25:54] And I felt like I couldn't do that quite a bit. [25:56] because Coinbase is this big company. [25:59] 4,000 people and like how am I ever going to [26:02] do this kind of work that [26:04] Um, [26:05] I want to do. I took some time off and then I came back, I did my toes and I was like, maybe I can. [26:11] And the last year and a half building towards base has been that journey. It's been like [26:16] Thank you. [26:17] trying to do that work inside of the big company and it's been the greatest strength and the greatest weakness. It's been awesome. You know, like so fun and it's been [26:25] horrible at times where I'm just like, is this possible? [26:28] Like literally, is it possible? [26:30] to do this here. [26:32] And I think that [26:34] It's like the existential tension of trying to do something [26:39] that changes the world, changes the company,

[26:41] I wouldn't change my decision for the world. I'm very grateful with where we are, but boy, [26:46] Has it been a hard [26:48] Do I expect it to be a hard time? [26:50] you know, two years ahead. Absolutely. [26:53] We're doing the impossible. [26:55] As I'm hearing you talk about that, one thing came up for me, which was that [26:59] I'm thinking about Coinbase, I'm thinking about 4,000 [27:02] Uh... [27:02] paychecks they've traded for two weeks and just the like this it's a huge publicly traded organization [27:09] And [27:11] you, as you're talking about layer twos, the value prop is that [27:15] it's like a hundred X reduction in fees. So how do layer two make money if at all? And like, [27:21] What's that look like? [27:23] Yeah, yeah. [27:24] Yeah, so how layer twos make money is that they charge fees like Ethereum and they're 100 times cheaper. [27:31] But I think the thesis is basically like, [27:33] Because they're 100 times cheaper, you can do 100 times more. OK. You know, or a thousand times more. But like honestly, today, like layer twos aren't making [27:41] that much money and at Coinbase we don't expect that to be like a huge revenue stream for our business. I think our bet at Coinbase from a like [27:49] What's the business case side is [27:52] we've made money for the last decade by making it really easy for people to use crypto. And historically what that's been is like making it really easy for people to use crypto and the only way that people can use crypto, which is trading. [28:04] and [28:06] If we can make it really easy for people to use crypto to do a hundred more things or a thousand more things or infinite more things, we're going to find...

[28:14] we're gonna find a way to make money. People are gonna continue being willing to pay us for that kind of trust, the ease of use, the confidence that they get for using apps through Coinbase. [28:23] create [28:24] more apps that people actually want to use. And then let's continue using Coinbase. [28:29] to make it really easy to use those apps. [28:32] And let's trust that if we do that and we encourage all this innovation, we let all this kind of millions of flowers bloom, like we're going to be OK. You guys have done such a great job of. [28:41] caring for the ecosystem as a whole. And I think a great example of that is Stand With Crypto and the work that you've been doing around that. So I'd love for you to talk about what that means to you and sort of how that came together. [28:53] Yeah. [28:54] Um... [28:55] Those who don't know, Stand With Crypto is a campaign that we're running to [28:58] kind of activate people all around the world and particularly in the United States to [29:03] stay with crypto and advocate for a common sense policy. [29:07] that can enable [29:09] both us to continue innovating in the united states and supporting entrepreneurs like you two who are trying to use this new technology to build new kinds of businesses that are good for the world and recognize the fact that like all technology we need to have a you know conversation and uh discussion about how we can have policy that makes that technology safe for consumers and creates kind of certainty for entrepreneurs and so [29:34] The last... [29:35] many years like that's not been the conversation we've been having in crypto instead it's been like [29:40] Hey. [29:42] You're doing bad things.

[29:44] You should feel bad. And I think we're trying to change that dialogue. [29:48] by saying, hey, it's time for us to have the right conversation. It's time to activate all the people who use crypto every day. [29:53] to make their lives better. [29:55] and for all of us to speak up and say, [29:57] we want [29:59] the common sense policy. We want to have a real conversation about how we get the best of this technology and we get the best of protecting consumers, etc. So, [30:09] Stand With Crypto is our campaign to do that. It's all NFT based. [30:13] And this [30:14] This actually, I think, one of the places where that came from is a lot of our learnings from the base launch. [30:19] uh, [30:20] For every moment in the base story, we've decided to, instead of just have a traditional Web 2 announcement where it's like, [30:28] Twitter. [30:29] we've actually said, hey, let's first start with what's the on-chain [30:32] component of this. Like what's the NFT that we can publish on Twitter [30:36] So like for the launch, we had the base introduced NFT. When someone gave us the base.eth [30:42] domain name because they just want to [30:44] support us and support the work that we're doing, we minted the email that they sent to us. Literally, I think we've done probably 15 different commemorative NFTs at this point. And what we've seen is that [30:55] those NFTs are actually getting more engagement than the Web2 [30:59] posts we're making. So like for the base.eth NFT, we had 12,000 unique people mint it. Wow. And we had 4,000 unique people like it on Twitter. Hmm. [31:08] It's really interesting. [31:09] three times as many people paid $5-$10, which is crazy. It's crazy that we pay $5-$10 to meet NFTs on L1. That's why we got to get out of here. They paid $5-$10 to meet this to be part of our story.

[31:21] And that was like three times as many as the people who did the social media. So I think as we've been thinking about Stand With Crypto and as we've been thinking about this campaign. [31:29] I think we've been thinking about how do we use this new technology? [31:32] itself to make the campaign more engaging, to make it so that it feels crypto native. And that's why you've had these shields. [31:40] that people can mint. Again, it's like you're donating $1 to the cause, and then you're paying $5 in gas. We know. That's horrible. It's bad. We hate it. We're working on it. [31:51] But I think we want to, as much as possible, be using these tools to tell these stories, because A, it's going to help us make the tools better, because we're going to get that first-hand experience. [32:01] And B, it's going to tell the story better. Because as people are doing the thing, as they're advocating, as they're saying, hey, I want to stand with crypto, they're going to be showing the world that these tools can be. [32:11] can do this, that they're possible, that's workable, and that's better. So that's the outcome. [32:17] It's pretty cool. [32:17] so cool yeah it's really exciting this was so fun genuinely had such a great time i'm so thankful that you want you're willing and wanting to come on and talk about these things so um jesse thank you thank you so much for coming and chatting with us thanks for having me this is a blast [32:33] Very grateful to be here. Dina, where are we going to be in September? We are going to be at Permissionless in Austin, Texas. Permissionless too. It's happening. And we're curating the culture track for the conference. So if you're into the stuff we talk about here, you should come and have a good time with us. So email your boss. Tell them that you need to go and buy your ticket now. They will never be as cheap as they are today. And we also have a promo code in our Discord for Boy Scout members. Come hang in Austin.

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