Coinbase launched Base, its new blockchain, in late July, and it has already become a major player among Ethereum-based layer-2 chains.\u00a0<\/p>\n
On Sept. 21, for instance, the chain notched<\/a> some 677,000 transactions, with 870,163 \u201cnew addresses seen,\u201d according to Etherscan. <\/p>\n By comparison, Arbitrum, a prominent layer 2 that launched in June 2021, had<\/a>\u00a0925,000 transactions and 54,233 new addresses on the same day.<\/p>\n Base is now hosting hundreds of decentralized projects, Jesse Pollak, head of protocols at Coinbase, told Cointelegraph at Messari\u2019s Mainnet conference in New York City on Wednesday, Sept. 20, including decentralized inflation oracles, restaurant rewards projects, an insurance aggregator and everything in between. <\/p>\n A major force behind the Base project, Pollak sat down with Cointelegraph at Mainnet for a Q&A encompassing Coinbase\u2019s vision for its new platform, the rising promise of decentralized applications (DApps) and the evolution of blockchain technology. <\/p>\n Cointelegraph: You\u2019ve said Base was created with a \u201cclear vision: <\/strong>bring the next million builders and billion users on-chain.\u201d<\/strong> Those are big numbers. How long will they take to achieve?<\/strong><\/p>\n Jesse Pollak<\/strong>: It\u2019s less about Base specifically and more about a billion users coming on-chain \u2014 embracing the power of this new platform [i.e., blockchain] that\u2019s transparent, open, global \u2014 and developing apps that can improve people\u2019s lives. Base is obviously going to play a big role in that, but it\u2019s much bigger than just us. We really see our role as helping grow that pie.<\/p>\n CT: And the timeline? <\/strong><\/p>\n JP:<\/strong> I see it happening this decade, i.e., one million developer jobs by 2030. There\u2019s already been massive change in the 2020s \u2014 not just in the industry but the entire world. It\u2019s going to happen faster than people might expect.<\/p>\n CT: What still needs to be done before we see mainstream adoption? <\/strong><\/p>\n JP<\/strong>: Three high-level things need to happen. First, we need to make it cheaper for people to use these apps that are being built. We\u2019ve done the first few orders of magnitude of cost reduction with Base. The same app might have cost $5 or $10 to use now costs 5 to 10 cents. <\/p>\n But we don\u2019t think that\u2019s enough. We really want to lower it so far that the cost is almost imperceptible to users.<\/p>\n Second, we want to make it easier for people to use these apps. A lot of that is building better wallet experiences.<\/p>\n Third, we need to have better identity infrastructure on-chain. Today, most consumer borrowing in the United States and other developed countries is under-collateralized borrowing in the form of credit cards or buy-now-pay-later arrangements. And almost none of this is possible on-chain now because we don\u2019t have reliable identity systems.<\/p>\n So, to enable that next wave of big use cases, we\u2019ll need lower costs, better wallets and better identity.<\/p>\n CT: You\u2019ve said that what most people have done with crypto until now is speculate on the crypto markets, and it\u2019s time to move on. Has it been a mistake to focus so much on the market price of Bitcoin, say?<\/strong><\/p>\n Pollak: <\/strong>I don\u2019t think it\u2019s wrong if you look at the way that technology life cycles evolve. Carlota Perez, for instance, writes<\/a> that financial bubbles are almost inevitable when you have meaningful technological innovation like the internet or electricity. You have this S-curve of adoption. [See chart below.] In the beginning, a lot of innovation is fueled by speculation as people see potential in the technology. This speculation draws in capital, which basically funds the innovation and eventually leads to impacts that change the world.<\/p>\n CT: Where are we now?<\/strong><\/p>\n JP<\/strong>: We\u2019ve reached the point where it\u2019s time to move out of that [speculative] phase and into the phase of really bringing utility to everyday people. The infrastructure is ready.<\/p>\n Even two years ago, if you wanted to use an app on Ethereum, it was going to cost you $5 or $10 or $100. That\u2019s just not something that is supportive of building everyday use cases.<\/p>\n CT: Speaking of Ethereum, why did Coinbase decide to build its layer 2 on the Ethereum blockchain? Did you ever consider using another mainnet? <\/strong><\/p>\n JP: <\/strong>We actually looked three times at building a chain: In 2018 and 2020, and then most recently in 2023. And the first two times, we looked at building an alternative layer 1, one which would have been competitive with Ethereum. Our takeaway was we didn\u2019t want to put ourselves on an island disconnected from the rest of the ecosystem.<\/p>\n The third time, we looked at all of the options: Ethereum, alternative layer 1s, layer 2s, etc. What felt natural to us about Ethereum was it is the largest crypto ecosystem by value, by activity, by developers \u2014 by order of magnitude or two \u2014 and so by building Base as an Ethereum layer 2, we could both contribute to scaling Ethereum and be a part of this ecosystem that\u2019s larger than us.<\/p>\n CT: What about Ethereum\u2019s oft-discussed scalability shortcomings, including network congestion and sometimes ballooning fees? Have those been largely solved through extensive use of layer-2 rollups like Optimism and Arbitrum (and now Base), where transactions are \u201cbatched\u201d and added to the mainnet in a single lot?<\/strong><\/p>\n JP: <\/strong>If you look at the history of Ethereum, the original vision was: We\u2019re going to do all this at layer 1, and we\u2019re going to scale up through sharding. But around 2020 and 2021, as layer 2s emerged, the Ethereum community and core development groups basically said: What if we changed our strategy where instead of trying to introduce all of this complexity at layer 1, we build the infrastructure to enable innovation at layer 2? <\/p>\n That was something that Vitalik [Buterin, Ethereum co-founder] wrote about a lot. And over the last two years, that\u2019s what happened. Coinbase supported an initiative over the last year-and-a-half called EIP-4844<\/a>, for instance, that introduced data availability for rollups, leading to reduced fees and more transaction throughput.<\/p>\n But do I think we\u2019ve solved the problem? No. These things take years to solve, and I think we are now two to three years into making those investments, and we have another two to three years or more potentially to go. But I think we\u2019ve made a lot of progress.<\/p>\n You can see this at L2Beat<\/a>. [See chart below]. Two years ago [Sept. 21, 2021], there were eight transactions per second [on average] on layer-2 projects and 13 TPS on the Ethereum mainnet. Today, there\u2019s 58 TPS on layer 2s and 11 TPS on the Ethereum mainnet. So we\u2019ve gone from less than 1x to 5.7 times faster in two years.<\/p>\n![\"\"](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-09\/4c5882fa-fae6-4002-b2bc-356c50a0c82b.png\" "\\"\\"")