Podcast Summary
The Future of Crypto with Base, Coinbase, and Transporter: This episode explores the transition to blockchain technology, Base's role in achieving a billion users and trillion-gigagas scale, Coinbase's move towards on-chain solutions, and Transporter's approach to security in Web 3.
This decade is expected to see the world transition to blockchain technology at an accelerated rate, with the goal of having a billion users and a trillion-gigagas scale. Base, a project co-created by Jesse Pollock, is one of the initiatives aiming to make this a reality. Coinbase, a centralized exchange, is also moving towards on-chain solutions, as seen in their partnership with Base. Transporter, a new bridging app, aims to address security concerns in the Web 3 space. The conversation between Jesse Pollock and David explores the importance of scaling Ethereum and the role of layer twos, as well as the process of a centralized company moving towards decentralized solutions. Listeners should tune in to gain insights into these topics and the future of the crypto industry. Sponsors like Kraken, Toku, and Celo provide essential services and solutions to the crypto community.
Reducing Gas Fees and Expanding Accessibility with Celo and Base: Celo and Base, two layer 2 solutions, are making significant progress in reducing gas fees and expanding accessibility to crypto transactions. Celo offers community governance, low fees, and native payments, while Base, the Coinbase layer 2, has seen impressive growth and attracts top builders with the launch of Farcaster frames and support for EIP 4844.
Both Celo and Base, two layer 2 solutions, are making significant strides in reducing gas fees and expanding accessibility to crypto transactions. Celo, with its community governance and low gas fees, allows for native payments using ERC 20 tokens and even cross-wallet transfers to phone numbers. Base, the Coinbase layer 2, has seen impressive growth, becoming the third-largest layer 2 by total asset value, with daily active users trending at 1.3 million and fees under 5 cents. Base's co-creator, Jesse Pollock, shares that they're still in the early stages, but have made substantial progress in the past 8.5 months. Despite a brief lull, they've seen a resurgence in Q1 of 2023, driven by the launch of Farcaster frames and support for EIP 4844, which has attracted top builders and significantly increased their market share. Both projects are working towards bringing more people and applications on-chain and shaping the future of Ethereum.
Ethereum Merge leads to cost reductions and surging demand, but high L2 fees: The Ethereum Merge brought cost savings, leading to a surge in demand and low L1 fees, but high L2 fees due to fee market mechanism. The focus is now on increasing Base's gas limit to support growth and maintain ecosystem health.
The Ethereum Merge to Base brought significant cost reductions for rollups, leading to a surge in demand and low L1 fees but high L2 fees due to the fee market mechanism. The goal now is to increase Base's gas limit to reach 1 giga gas per second to support the growing demand and ensure continued growth in the ecosystem. This iterative cycle between infrastructure and applications is crucial for the scalability of both Base and other blockchain networks. The Ethereum community is focused on solidifying Base's position as the go-to platform for building and investing in its ecosystem to reach the ultimate goal of onboarding 1 billion users.
Scaling Ethereum: Increasing Data Availability, Optimizing Gas Processing, and Managing State Growth: Ethereum aims to increase gas processing capacity 400x by addressing challenges like data availability, optimizing EVM, and exploring state management techniques.
Scaling Ethereum's target requires a principled approach and addressing three primary challenges: increasing data availability, optimizing gas processing, and managing state growth. To achieve this, Ethereum is investing in data availability solutions like Pure DaaS and optimizing EVM for faster processing. Additionally, they are exploring state management techniques such as Fercal trees and state expiry. The ultimate goal is to increase gas processing capacity to 1 giga gas a second, a 400x increase from where they started. This will require continuous optimization and engineering efforts.
Contributing to Ethereum's Scalability as a Base Engineer: Base engineers address complex challenges to help Ethereum scale, leading to increased demand and significant transaction growth. Their focus on decentralization and open-source development benefits the entire industry.
Being a base engineer involves addressing complex challenges to help Ethereum scale from 1 to 10, with incremental improvements in multiple areas. Base's contributions to Ethereum and the OP stack benefit not only the team but also the entire industry. The introduction of Ethereum Improvement Proposal (EIP) 4844 led to increased demand for base transactions, likely due to a combination of factors including developer go-to-market efforts and the timing of the launch. This demand was more pronounced on base than on other networks, leading to a significant increase in transactions processed. The team's focus on decentralization and open-source development has led to numerous contributions to the industry, with the base team leading recent upgrades and the upcoming Fjord upgrade. These upgrades bring benefits to any network running on the OP stack.
Base sees surge in revenue generating deployers due to EIP 4844: Base, a popular Ethereum layer 2 solution, has experienced a significant increase in deployers due to EIP 4844, resulting in lower transaction fees for users (around 1 cent), but potential future blob fees could impact overall costs.
The implementation of Ethereum Improvement Proposal (EIP) 4844 has led to a significant increase in revenue generating deployers on Base, making it a popular choice for entrepreneurs and small businesses looking to set up shop in the new "suburbs" of the blockchain world. This shift has resulted in lower transaction fees for users, with costs currently around 1 cent, a decrease from the prior median fee of 80 to 90%. However, as usage of Ethereum layer 1 increases, blob fees may no longer be free and could make up a larger portion of transaction costs. Base is aiming for an internal north star of 1 second, 1 cent transactions, and plans to scale to accommodate more users while maintaining low costs and fast speeds. The cost breakdown of a transaction's 1 cent fee reveals that most of the cost is not from Ethereum layer 1, but rather from the layer 2 market-based fees. Base is open to exploring non-Ethereum dApp stack solutions as an additional option for reducing fees.
Ethereum's Data Availability Scaling: Puredas and Parallelization: Base focuses on Ethereum's data availability scaling, implementing Puredas and optimizing for trust and long-term outcomes, with layer threes providing cheaper on-ramps and potential fee reductions through parallelization
Ethereum's current roadmap for data availability scaling, including the implementation of Puredas and the execution of optimizations like parallelization, is a top priority for Base as they aim to build a global on-chain economy with high trust and security. Layer threes, which can be thought of as servers that run slightly more connected on-chain, are expected to proliferate on Base and provide cheaper and easier on-ramps for users. While parallelization and state isolation are potential solutions for reducing transaction fees and gas costs, they may require breaking changes and careful consideration. Overall, Base is optimizing for trust and long-term outcomes and believes they can solve their needs on the Ethereum side.
EVM evolution at Layer 2 leads to developers covering transaction costs: EVM evolution at L2s reduces user costs and accelerates innovation, as developers cover gas and compute expenses.
The evolution of Ethereum Virtual Machine (EVM) at Layer 2 (L2) and the decrease in costs on L2s and other compute environments will lead to developers internalizing more transaction fees into their business models, making transactions free for users. This shift towards developers covering gas and compute costs is not a new concept, as it's how businesses have operated online for years. Ethereum Core Devs, in collaboration with L2s, are working on the Roll Up Improvement Proposal (RIP) to evolve the L2 EVM while staying connected to L1. Additionally, gas grants are being given to developers to fund transactions and experiment with gasless experiences while generating revenue. This approach will improve user experience and accelerate innovation, as infrastructure development is the best place for implementing economic mechanisms to price transactions efficiently and ensure network stability.
Addressing challenges in Ethereum for dApp growth: New technologies like Mantle and Arbitrum offer stable, affordable solutions for building and interacting with dApps, addressing Ethereum's high gas fees and volatility. Infrastructure for hedging future gas costs and securely storing crypto assets are identified needs.
The Ethereum blockchain, with its high gas fees and volatility, is limiting the growth and stability of decentralized applications (dApps). To address this issue, new technologies like Mantle and Arbitrum are being developed to provide more stable and affordable solutions for building and interacting with dApps. One specific need identified is the lack of infrastructure for hedging and pricing future gas costs, which could give developers more consistency and predictability. Additionally, taking self-custody of crypto assets is crucial but can be challenging, and services like Casa can help ensure that assets are securely stored and inherited. Overall, these advancements and solutions are crucial steps towards making web 3 development more secure, fast, cheap, and friction-free.
Exploring advanced building blocks for Web 3 development: Cartesi provides powerful solutions for developers to access a full Linux OS and rich code libraries, while Coinbase's decision to store USDC balances on Base enables cheaper, faster transactions, leading to cost savings, global access, and seamless integration for on-chain projects.
Traditional tools for developing decentralized applications are limiting, and there are more expressive building blocks available for developers. Cartesi offers powerful solutions, allowing access to a full Linux OS and decades of rich code libraries for building in Web 3. Additionally, Coinbase's decision to store more USDC balances on Base enables cheaper, faster, and globally available transactions, paving the way for a more on-chain economy. For developers, this means lower costs, wider availability, and seamless composability. Companies like Coinbase leading the way in this transformation can result in significant benefits, such as cost savings, global access, and seamless integration with other on-chain projects.
Coinbase Transforming Business on Chain for Better User Experience: Coinbase is moving parts of its business on-chain, starting with USDC, to offer cheaper, faster, and globally available services. The new Smart Wallet aims to provide a simple and unified experience for users and developers.
Coinbase is working to move more parts of its business on-chain, starting with USDC, to provide cheaper, faster, and globally available services with better experiences for customers. This transformation will not only benefit Coinbase but also accelerate the base ecosystem and set a playbook for other businesses worldwide. The Smart Wallet, a new platform being built on top of base, aims to provide a simple and unified experience for both users and developers, eliminating the need for them to worry about complex onboarding and gas fees. Coinbase's goal is to move on-chain while maintaining a consistent product experience for its users.
Building a user-friendly wallet system with DeFi security and centralized exchange ease: Coinbase is developing a platform to merge decentralized finance security and centralized exchange ease, allowing developers to build powerful apps and users to access both first and third-party products, promoting transparency, decentralization, and innovation in the crypto economy.
Coinbase is working towards building a user-friendly wallet system that provides the security and transparency of decentralized finance (DeFi) while maintaining the ease of use of a centralized exchange. The underlying compute platform they're building will allow developers to create powerful applications, and users will have a seamless experience accessing both first and third-party products. This shift towards on-chain management of funds aims to increase transparency, decentralization, and innovation in the crypto economy, and it may represent a significant transformation in the space that many people may not fully understand yet. The goal is to create an open global economy where users have control over their assets and can easily access various financial tools and services.
Coinbase's Commitment to Decentralization: Coinbase, a centralized exchange, is working towards decentralization by focusing on governance and technical aspects, expanding decision-making power, and launching fault proofs.
Coinbase, as a crypto company founded in 2012, is working towards a more decentralized and open-source future, despite its centralized exchange and publicly traded status. The company values decentralization but recognizes the need for careful pacing and deliberate decision-making to build a trusted platform. Coinbase has addressed criticisms of centralization by focusing on governance and technical decentralization. They have set up a network with no single point of control, and are working towards expanding decision-making power to a geographically distributed security council and allowing anyone to challenge malicious behaviors. The next steps include launching fault proofs to further decentralize the network and remove points of failure. These changes demonstrate Coinbase's commitment to decentralization and its belief that the world will eventually follow suit, recognizing the benefits of cheaper, more transparent, and globally accessible systems.
Coinbase working on decentralizing L2 platform Base: Coinbase is decentralizing L2 platform Base technically and governance-wise, expanding decision-making power to the community and experimenting with community-driven institutions for funding allocation.
Coinbase is working on decentralizing its L2 (Layer 2) platform, Base, both technically and governance-wise. Technically, they aim to turn more slices of the "pie" or "pizza" from red to yellow and green, progressing from stage 0 to stage 1 and then to stage 2. Governance-wise, they plan to expand decision-making power from the base core team to the community. Coinbase is also experimenting with leveraging community-driven institutions to make decentralized governance decisions, such as funding allocation through Base Builds on Farcaster. By doing so, they aim to create a more efficient and effective decentralized ecosystem. This innovative approach sets Coinbase apart from others in the industry.
Bringing people and projects on-chain during summer: The On Chain Summer initiative provides funding, resources, and support for people and projects to build on the blockchain during the summer season, with a goal to bring millions on-chain.
The On Chain Summer initiative, which started last year and continues every summer, aims to bring people and projects on-chain by providing funding, resources, and support. This program, run by Rounds, has seen great success with high-quality and diverse submissions. The summer season is seen as an especially good time for building on the blockchain due to increased energy and availability of resources. The initiative includes a global hackathon, funding for builders, and partnerships with brands and communities. It's not just limited to developers but encourages anyone to build on the blockchain, including businesses, brands, and creative practices. The goal is to bring millions, if not tens of millions, of people on-chain and help them realize their vision for the future.
Exploring the On-Chain Economy with Base this Summer: The on-chain economy is growing rapidly, with Base leading the charge. Decentralization is crucial for an open global economy, but it comes with risks. Learn and get involved through the On Chain Summer initiative.
The world is moving towards a decentralized, on-chain economy, and it's happening faster than anticipated. This summer, artists, small businesses, students, and more are being encouraged to join the on-chain economy. The Base team, which operates independently within Coinbase, is leading the charge in growing the base ecosystem. Decentralization is key to building an open global on-chain economy, and it's expected that the best versions of these things will be the decentralized versions. The next decade is predicted to be the decade where the whole world goes on-chain. However, it's important to remember that going on-chain is risky, and people could lose what they put in. Despite the risks, the excitement and potential for innovation make it an enticing frontier. The On Chain Summer initiative is a great resource for those interested in learning more and getting involved.
