Layer 2, Rollups, and Building Onchain (with Base)

Jesse Pollak

So when we were thinking about building base, probably our largest concern, the thing that was like holding us back from building it was, will people take us seriously when we say we're going to decentralize because it's coming from a big centralized corporation? I think that a lot of people might look at that and be like, okay, who are these jokers? What are they doing? Why are they trying to co opt this?

Robert Hackett

Hello, and welcome to Web three with a 16 Z, a show about building the next era of the Internet by the team at a 16 Z crypto that includes me, host Robert Hackett. Today's episode covers the bustling area of layer two rollups, a technology for scaling layer one blockchains such as Ethereum. Joining us is Jesse Pollock, who previously led engineering for Coinbase's retail side, and who now is the company's head of protocols, where he founded and leads the popular layer two roll up base. We're also joined by Noah Citron, an engineer at a 16 Z crypto who works on many open source projects and protocols, and who closely tracks developments in this area. Our conversation digs into the shifting history and future of Ethereum, the arrival of upgrades like EIP 4844, experiments in futarchy, and the difference between leading and innovating inside companies versus within decentralized communities.

We also discuss the challenges of winning developer mindshare, how to refine business metrics and measures, understanding the tangled interactions between rollups and bridges, and whether you should ever hyphenate the word on chain. As a reminder, none of the following should be taken as tax, business, legal, or investment advice. See a 16 zcrypto.com disclosures for more important information, including a link to a list of our investments.

Noah Citron

Okay, so I want to start big picture here, which is, what is a layer two, and what is it about a layer two that enables you to run things cheaper and faster? That a layer one, like ethereum or many of the other multitudes out there, what is it about a layer two that enables that? Yeah, I might think about a layer two, just using analogy. Kind of like a carpool lane in a highway. So ethereum has built a highway.

Jesse Pollak

You have all these cars that are going on. It's. But what layer twos do is they make it. So instead of trying to have every individual transaction via car, you can take a ton of transactions. You can put them in one car.

So maybe it's a bus, or maybe it's actually public transit. And now all of those transactions can move together at a much faster pace. And so the way that that works is layer twos basically take big batches of transactions, so thousands of transactions that people submit and they batch and compress them and then publish them to layer one. And what that means, it means that all of those transactions that are being published onto layer one through the layer two get the same security, they get the same kind of platform benefits, they use the same technology, but they're batched and compressed, which makes them much, much cheaper. And so you can get all of these benefits from a speed perspective, from a cost perspective that comes from that compression.

Noah Citron

I wanted to also add a little bit on the how and the why we got to this design and to go just a little bit deeper, a little bit more technical, because it wasn't. Initially on the roadmap for Ethereum. Ethereum had a different plan for how they wanted to scale. Yes, Ethereum had a different plan, but they kind of wanted the same outcome of they had this realization that they can't scale just one lane. So let's make multiple lanes.

And the original design behind this was sharding. And it turns out roll ups are, in a very roundabout way, implementing sharding. But what the realization that I think Ethereum had, and a lot of other blockchains had this realization too, such as Cosmos, was that blockchains are very good at taking things, putting them in order, and then keeping those things around for a little while. And it turns out we can do that at pretty high scale. At the time, we didn't realize we could do that one thing on a very high throughput, but we can.

What blockchains are not so good at, though, is re executing all these transactions. You sort of put all these things, these transactions in order. You kept them around for a little while, but every single person who wants connecting the network needs to rerun every single transaction. And of course you can do that, but when you do that, you need bigger and bigger and bigger machines. And eventually, like, you run out of machine, there aren't computers big enough, there aren't data centers big enough, there's not enough network inbound and outbound from your data center to run the entire Internet on a blockchain.

And what you're describing is this issue that if you want to run things off chain and then you end up having to re execute everything to prove that it's all true and everything is like, valid, you run into an issue where basically you're just recomputing everything and it gets to be an even more complicated problem than it was before. You tried to offload all the computation. Exactly. And the problem isn't really at first that you can't just have many people re executing things, but rather that you cannot get a high enough stake of each thing and re execute it. So at the time you wanted to build a new thing and you needed high throughput, you could build a new blockchain.

You can convince people that your token is valuable, get a lot of stake on that blockchain, a lot of money backing it, make it hard to sort of 66% attack for a proof of stake chain. And that was sort of the way you did it. But now you're into the problem with every blockchain. Again and again and again it gets some capital efficient chains like Pos was, had this cool idea recently of like, oh, we could sort of share about stake around. And that is interesting, but roll ups went in this opposite direction of saying, you know what?

We figured out that we can order things and keep them around for a little while. Really, really well. So let's make one blockchain like Ethereum, that orders things, keeps them around for a little while, and then let's make lots of roll ups that prove what the outcome of the things that the transactions that were ordered and kept around for a little while on Ethereum. Yeah, exactly. And so like Noah said, what was originally a vision of, okay, we're going to take this one blockchain, Ethereum, and we're going to break it up into a bunch of parts and that's going to let us scale instead said, hey, actually we're going to take this blockchain like Ethereum.

Jesse Pollak

We're going to make it work really, really well for this ordering component that's super important from a decentralization perspective and security perspective, then we're going to create a free market where we say, hey, we're going to build a platform that then lets other people do all of the transaction processing on top of us, and we're going to give that security, we're going to give that ordering as a service and everyone else can innovate in the space of how do we process more transactions and put them into that ordering security that Ethereum is providing. And I think what we've seen is that, like Noah said, we're kind of converging back to where we started. We're ending up in a world where there are going to be many shards of execution that are happening in parallel, that are all scaling Ethereum. But instead of that having been like top down where Ethereum did it all in place, instead we've had being built bottoms up where you now have all of these roll ups that are coming together. They're taking sometimes different approaches to scaling Ethereum and are making a pretty big impact so more users can come on chain.

Noah Citron

Thats really interesting. The initial plan around sharding the blockchain was this top down approach from the community of developers that work on Ethereum. This new approach, this roll up centric approach is really more of a bottoms up movement where youre like, okay, well weve got this part, the blockchain that can do the sequencing, it can tell you the ground truth for a little while and then really its up to everybody else to come up with these extracurricular systems that are going to take care of the real load. Exactly. One credit I'll give to Vitalik as a leader, Vitalik Buterin, who created Ethereum, is I think he's done a really great job of creating the like, strategic context from the top down for creating that market.

Jesse Pollak

Like if him and the Ethereum foundation and other core developers have been like, yeah, like we don't really know what to do. So like you guys just go figure out, I don't think that would have worked. But instead in 2021 they basically said, hey, we were going down this path of scaling Ethereum in place with sharding, but now we actually want to change our strategy and we want to embrace this Rolex centric strategy and here's how we're going to start evolving Ethereum to do that. And we want all of you other folks to contribute to this role centric strategy. And I think that kind of leadership from the center of Ethereum, where they've been really clear in what the long term strategy is, they've invested in long term research and technology investments and then they've created space with clarity for a bunch of other teams to crop up and execute the core parts of that strategy that are decentralized and bottoms up.

I think it's been very, very impressive and I think it's a certain type leadership that we can all learn something from. For any of the sort of Ethereum historians there who want to see the defining document of when that was laid out and actually see what happens to have that leadership, there's a fantastic post written by Vitalik was post on ETH research as well as his blog called the Roll up centric roadmap of Ethereum I think was written in 2020 or 2021. So it's getting somewhat old now, but at the time it was the first time in public there was this admission that we're not going to do this sort of execution sharding based approach and set the stage for everything that's happening right now. Yeah, and mentioning Vitalik's leadership when I interviewed him like many moons ago back in like, I think it was 2016, I was working at Fortune as a journalist and I did a profile of him. One thing he told me was he wanted to take inspiration from Linus Torvalds of Linux fame.

Noah Citron

And I think he's been able to do that pretty successfully if less of a surly presence. It's like nice Linux. Yeah, it's like nice Linux. That's great. Not an easy thing to do.

Jesse Pollak

And I'd say this isn't the only place he's done it. I mean, I think another place where Vitalik's really been an incredible leader is the roadmaps that he's published on a yearly basis for Ethereum for the last couple of years. Like literally he's diagrammed out, here's what's happening in Ethereum, here's where we're going. And I think that that sort of clarity from kind of the spiritual leader of Ethereum has been such a valuable shelling point and coordinating function for clarifying for all the other teams that are working on Ethereum. Oh, this is how I fit it.

This is where my work contributes to this broader mission. And I think with decentralization sometimes it can be easy for people to say, oh, like we're going to leave it up to the community. And actually that's totally backwards. Like with decentralization you still need leadership. You still need people who are willing to come out and say, here's our long term strategy, here's where we're going.

It's just a lot harder form of leadership because there isn't the sort of command and control where you can just tell people what to do. Instead, you need to inspire people and you need to get them to follow you and to trust you and to influence them. And I think Vitalik has done such an incredible job of both articulating those strategies and roadmaps and building the sort of like trust and confidence from the broader Ethereum developer community that let them execute out the vision that he's doing, that he's articulating with many other people in a totally decentralized way. I mean, just to extend that, like Brian Armstrong of Coinbase also is managing to toe this line. He's obviously leading a centralized business and exchange, but with all of his interest in decentralization and just a really interesting vision on how he's going to take the company.

Yeah. And if you look at Brian in 2016, Brian published the Coinbase Secret Master plan, which talked about four stages, where you have a first stage, which is building out these core protocols, like Bitcoin, Ethereum. Then you have a second stage, which is building out these exchanges that let people get into those protocols. Then a third stage, where you build consumer interfaces so people actually access the protocols, and then a fourth stage, where you have millions of apps that billions of people use. He wrote that in 2016, and I feel like we're on the verge of that fourth stage.

Now we have the protocols, we have the exchanges, we're starting to have the wallets and browsers, we're starting to have these apps. But Brian didn't know exactly how to get there. And as we built base inside of Coinbase, I think it was much more emergent and bottoms up. In many ways, base was a result of a team of people inside of Coinbase looking at the strategy and the vision that Brian was articulating and saying, hey, we think we know a path to help. And that sort of bottoms up innovation happening inside a large corporation.

It's very rare, and I think it is enabled by Brian's leadership and by his willingness to articulate that clear vision, but then also make space for other leaders in the organization to really step up and make an impact. Let's talk about base. Yeah, well, it's a good segue. Where did it come from? Where is it now?

Noah Citron

Where is it going? Yeah, so I've now been in the Coinbase orbit for seven years. I led all of our consumer businesses for five years on the engineering side. So Coinbase, Coinbase pro, Coinbase wallet. And then in about 2021, like early 2021, I decided I wanted to get closer to the metal of crypto.

Jesse Pollak

And that was kind of for me. Just like I've been doing it for five years. I had a big organization. I am still a hungry kind of founder. I come in through an acquisition, and it felt like I needed to figure out how to push forward, like global crypto adoption.

And the best way to do that was by getting into the infrastructure, because it felt like there were still a bunch of really hard infrastructure problems that needed to be solved. So, late 2021, after taking a little bit of a break, I came back to Coinbase and took on what felt like a kind of clear mission without a clear strategy, which was figure out how to bring Coinbase on chain by building infrastructure and products that let us move our customers, our products, our assets on chain. That begun what was quite the journey and honestly felt like wandering in the desert for about a year, we iterated through four different products that we tried building. It was me and a small team. None of them got product market fit internally.

We talked to customers, didn't really feel like there was a fit there. We kind of wound down each one of them. And I think as we were going through that process, we kept running into a bunch of the same problems in particular, like, we were starting to build these on chain products, but we kept running into a bunch of foundational technology decisions that were platform decisions, like, where do we build these things? How do we make sure that when we build them on chain, they work well with Coinbase products? How do we make sure that the platform we build them on works at the scale that Coinbase needs?

I think after literally a year of trying and failing at the product level and running into a bunch of these same infrastructure challenges and starting to do the exploration, the decision making around, how do we solve some of these infrastructure challenges? The small team that I was working with got together and said, hey, what if instead of just continuing to operate at the product level, we go down to the platform and say, let's solve this for ourselves? First and foremost, let's build a platform that we would have wanted if we were starting to build new products on chain of Coinbase. Let's solve that and then let's see if that's useful for Coinbase and let's see if it's useful for the world. And so that was late 2022.

We started with an internal prototype that we called Basenet, which was an internal l two that was launched on a testnet that we opened up to Coinbase developers to say, hey, here's a playground for you to play around with stuff on chain. People loved it. They had a lot of fun building things on it. And so that gave us the confidence to say, maybe we should make this a real blockchain. We decided in December to do it.

And then we launched the Testnet in February, like two months later at East Denver, and opened it up from a developer perspective. And then we launched the Mainnet in August 2023. And then here we are after the mainnet launch, which was August 9. And if you look at the number of transactions, the number of daily transacting addresses, the number of daily transacting and monthly transacting builders who are deploying contracts, the amount of Dex volume basis, number one, across all of them, I think we're seeing a groundswell of energy of people starting to come on chain. So that's the short tldr of base.

We have a lot ahead of us. I like to say to our team, it's still day one, we're just getting started. And I think when we think about what a successful outcome for base looks like, it's building a global on chain economy that increases innovation, creativity and freedom. What I love about this story about it being an internal project, you guys had a problem and you were trying to come up with a solution for it for yourselves, let alone in external parties, is that there's a rich product history of companies that do just this. And I think maybe the top example might be Amazon coming up with Amazon Web Services to solve their own web hosting problems and then that becoming just a huge profit driver for that company.

Noah Citron

You mentioned that you like to say that it's still day one, which maybe tipped me off to this because that is a famous Jeff Bezos ism. Famous Bezos ism. Absolutely credit to Bezos for that one. That's not a Jesse innovation. But yeah, I think about base as the AWS to Coinbase.

Jesse Pollak

This really is the platform. It's the developer platform that's going to enable developers to build on chain. And it came from Coinbase, who spent ten years building the infrastructure to let our teams build on chain internally. And now we're opening it up to the rest of the world. We're trying to say, hey, it's time for everyone to come on chain because you can get better outcomes for the products you're building, better outcomes for your customers, better outcomes for the economies that you want to be a part of.

Noah Citron

You talked about base as being a top l two, and you listed a bunch of attributes in support of that. One of the measures that a lot of people in this industry like to use is TVL, or total value locked. And there are plenty of people who take issue with that as being like the North Star that a lot of people cite. When it comes to TVL, bases ranked third. You got arbitrum up at number one, optimism, or the op main net at two, and then base at three.

Jesse Pollak

So we got a long way to go there. And I think the reason why we look primarily at the daily monthly metrics is because they're much more in our control. If you look at the TVL, which we actually call assets on platform, because there's two metrics that people look at that they call TVL. One is the total value of assets bridged and natively issued on a blockchain. And that's what l two b reports.

Another, which DeFi Loma reports, is the total value locked in DeFi protocols. So it's like how much is in uniswap, et cetera. People call both of those TVL. Internally, we call the former assets on platform, we call it the latter TVL. And so assets on platform describes all of the value of all of the assets that are secured by base, whereas TVL describes the value of the assets that are locked in protocols.

On both of those, we still have some catching up to do to be number one. And I think the reason why we're less indexed on those day to day is they're very time dependent. If you look at optimism and arbitrum, they've been around for three plus years at this point. And once assets flow into l two s, they're very sticky. And so you don't see that much reshuffling of assets once they're into an l two.

And, you know, based in the last eight months grew from zero to 5 billion. In the last three years, arbitrage and optimism has grown from zero to whatever they're at today. But the productivity of those assets, the size of the economy, we think, is much more reflected by basically how many users are actually transacting how many people are building, what's the volume. So that's what we're focused on day to day. But we think that over the next couple of years, we'll see the TVL and AOP grow as well on base.

And we're excited for that. To clarify, let's talk about those measures and metrics that you care about. You mentioned a few of them. I just want to make sure that we have them. So, yeah.

Noah Citron

Interested to know how you measure your success and sort of how you're performing on those fronts. Yeah, and I was actually just talking about this with someone who was thinking about joining our team. And the base team is still very small, but we're slowly starting to grow it. You know, it's not quite a two pizza team. The team is like ten people, but it's a handful of pizza teams.

Jesse Pollak

Yeah. That's like a good measure of, like, how many people you want in a room to get something done. Yeah, exactly. So we're like a few. Two pizza teams.

So we think about base as an economy that we're trying to grow. Global economy, a global on chain economy. And from a strategic perspective, we're focused on four things that make up that economy. The first is the developer platform, which is where developers actually come to build. They write EVM code, they deploy it on base.

This creates apps. The metric that we look at for whether we're building a successful developer platform is what we call QMTV or quality monthly transacting builders. So we basically look at all of the people who've deployed smart contracts. Then we add some quality filters to it to make sure that they're not just spam or bots. And that's our QMTB metric.

Got it. So that's the supply side. Our developers being successful building our developer platform and able to build apps. The next is the demand side, which we think about is, are we building an app ecosystem that consumers and businesses actually want to use? And the metric that we look at there is QMTA, or quality monthly transacting addresses.

So this is basically who are all of the people who are on chain doing transactions, whether that's a buy or swap, or a mint, or playing a game, or sending USDC to a friend. And then we apply some quality filters there as well to filter out bots and spam and try and get to real humanity. Can you say anything about what sort of filters you apply to get a quality determination? I can't explicitly define it, but what I'll say is we look at activity. So, like, what kinds of transactions are they doing?

We look at like, identity characteristics that are starting to be on chain, for instance, like social graph from Farcaster, or verifications from or world coin. And all of that lets us get a pretty clear picture. It's not perfect, but it does give us enough clarity and filter out enough noise, and it's pliable across all contexts, all chains. So that basically allows us to then do market share and look at how much market share base have versus other people pretty consistently. So that's the second metric, the third metric.

And the third North Star is really about growing the largest capital market in the world on chain and making base the center of the on chain economy. And there we're looking at assets on platform alongside TVL and Dex volume. So assets on platform is the total value of assets secured by base. TVL is the value of assets in DeFi protocols on base. And then volume is how much trading is happening on a daily basis.

And like you called out on AOP, assets on platform and TVL were still lagging. But on the DeX volume we're seeing that base has been growing very quickly. We have some catching up to do to get to Solana and BSC, who are bigger and have been around for a little bit longer. That's the third North Star, and then the fourth one is we need to decentralize and scale this platform that we're building on. And so the metric here is not just a number.

Instead, we're looking at basically a four pronged goal, which is we want to achieve a stage two level of decentralization, which is the maximum level of decentralization on a roll up that has at a minimum, four nines of availability. So 99.99% availability, that can process one gig of gas, a second of gas, which is kind of a throughput metric for how much gas it can process at a less than one average transaction cost. And so those characteristics of the underlying technology platform is the fourth major pillar of what our teams invest in. Okay, so I want to get Noah into the mix. Noah, as somebody who is tracking these l two s, how are you evaluating them?

Noah Citron

Like, what metrics are important to you, as somebody who's observing all this take. Shape, I guess there are two metrics. One is sort of this highly practical right now metric of like, how's the chain doing? How are we doing on transactions, how are we seeing quality developers build on? Basically the traction from an ecosystem perspective.

And that stuff is probably the most important. And what's unfortunate about a lot of that is you can win on the ecosystem without winning on the tech. So the thing that I spent a lot of my time focusing on is how do you win on the tech side? Like, you can make a lot of concessions to build something that seems to be scalable and sort of works. And if you win the ecosystem and you do that, you might actually end up as the winner.

So I think the thing that's most important to me is that the one who wins the ecosystem is also the one who wins the tech. And we need to make sure that's actually how it lands. So I spent a long time thinking a lot more out into the future is like, what are the end games of these roll ups going to look like? Sort of what is their ability both to get to this stage two decentralization thing, as well as what stage two decentralization looks like for that roll up? Because each roll up has a lot of somewhat interesting characteristics where what stage two looks like, the security model of it looks ever so slightly different.

So it's really about how the choices that they're making now and the way they're thinking about it right now is going to lead to the optimal endgame future. And just I'm here crossing my fingers that the one who wins the ecosystem is the one who sort of wins. Also, this long term technical story. Explain what you mean by that. Winning the ecosystem versus winning the technology.

There's nothing stopping you from having a gazillion users. You can build chains that have relatively high throughput. Eventually you do hit a cap, but it can get very, very high. And you can clone those chains. You can imagine building roll ups, except each roll up is twelve validators who are a proof of authority.

You and eleven of your friends are each of the validators. And you clone these blockchains, run them across a bunch of data centers. You have something that looks like this multi road map. It scales a lot. Not very secure.

It's not really secure at all. You have very little ability to verify what's going on. You have very little trust in twelve, or it could be twelve or 20 or 100. You want it to be 10,000. There's nothing stopping that world from winning other than we need to have people who are sort of educated as well as the people who are winning the ecosystem to be also the people who care about these very long term tech, which one of the reasons I'm very excited to hear a lot of what Jesse's been saying is it seems that base to a certain extent, has been winning the ecosystem as well as cares quite a lot as well as really the whole op stack.

Your point about winning the ecosystem means like, you might be the product that everybody's using, even if it's not the most superior, most decentralized, most secure product in the market. And what you want to see is a product that is both the superior tech product and being used by everybody. Exactly. I mean, we see this all the time. We all still use visa.

Yeah, that's a great point. Yeah. Although, I mean, I think one of our thesis from the beginning on base is that the best way to build the biggest ecosystem is to embrace the values of Ethereum and to lean into the decentralization roadmap and take a path that we think gets us to the best endgame. And so when we were thinking about building base, probably our largest concern, the thing that was like holding us back from building it was, will people take us seriously when we say we're going to build a layer two that's going to decentralize all the way to stage two because it's coming from a big centralized corporation. I think that a lot of people might look at that and be like, okay, who are these jokers?

Jesse Pollak

What are they doing? Why are they trying to co opt this? And so from the beginning, our whole ethos was, no, we're going to build on open source. That's why we built on the op stack. So it's not a proprietary stack.

We're going to lean into multi clients. That's why we've worked with Magi from a 16 z and you know, and op rep and taking the whole stack approach that we've done with optimism stack that's going to let us get to stage two by having multiple clients. I think all of that for us has basically been a bet that yeah, we could build a great ecosystem, but the best way to build a great ecosystem is to attract incredible developers. And the best way to attract incredible developers is to live the values that they want to see, which in the Ethereum world is about decentralization, it's about open source, it's about building something that embodies those values. And so I think it's been cool to feel like, oh yeah, we're actually being rewarded for prioritizing decentralization and being rewarded for thinking about this in the right way.

And I think maybe there's another reality where someone could just build a chain or roll up that throws away all those things but still gets the most adoption. But I'm skeptical. I think that the hardest thing to win is mind share of developers. We see that again and again and again and that's what you need, because those are the people who are going to build all the incredible products in the world. And the best way to win that mind share is by being the same and caring about the same things that they care about and prioritizing them and earning their trust.

I think that we're starting to do that on base and I'm excited to see how much further we can go. I think that's something we're extremely lucky, right? Like this didn't have to shake out that way. You are absolutely right. Like if you're going to have a big ecosystem, you need great developers building great things.

Noah Citron

And fortunately we have this culture among Ethereum developers of really caring about these things. But it didn't have to be that way. It's something very special that landed Ethereum, and I don't know exactly why it happened that way. I have some guesses, but it did because of that. I think you're right that it's likely that the roll ups who do do it sort of the long term right way and say theyre going to do it the right way from the get go are going to build that ecosystem much more quickly.

Jesse Pollak

Yeah, I cant quite describe why its happened the way it has as well, although I will say because it was the beginning of 2023, we were working on 4.44, which is the scaling upgrade to Ethereum, that Coinbase and base started working on about two years ago that just shipped in March. And because we were doing a bunch of core development related to it, the Ethereum foundation put on a core development team summit where they brought all the core development teams, which are a bunch of different teams, a bunch of different companies building a bunch of different clients all together in Austria for a week. And someone else on my team, Roberto, who leads all of our core development, we got invited because we were contributing, and I went and was there for a week and watched all of these decentralized core development teams come together. And it was one of the most profound experiences I've ever had in my entire life. Wow.

Because I've seen corporations try and organize in a central, like, top down command and control way to get people to accomplish things. And seeing the counterpoint, which is, oh my God, none of these people work together. None of them work for the same corporation, but all of them have the same value set. All of them are aligning, and all of them are shipping incredibly complex software on like, a pretty intense timeline with a really high level of quality to build a global economy that's almost trillions of dollars value. That to me was like, oh, I don't fully understand this.

I don't know why, but there's something profound here that is happening that I want to be a part of. So I'm glad you brought up 4844. I do want to talk about that. But before we do, I also want to just clarify for people who are tuning in, Noah and Jesse, you both have cited various stages of maturity for rollups and have cited stage two as the fully decentralized stage. So maybe you could just elaborate on those three stages quickly.

Yeah, roll ups bootstrap off of Ethereum's decentralization security. So getting to the optimal state of, oh, this is fully decentralized. It's really fully like having the same security and decentralization characteristics as Ethereum wasn't something that was really possible on day one. Instead, like any system, you kind of had to build it incrementally. And so that's what people started doing three years ago, we started building rollups, or four years ago, the first ones went live in production two and a half to three years ago.

And when those first roll ups went live in production, they had a lot of training wheels. So there's basically a bunch of protections in place in the roll up, so that if there was a bug, it could get fixed, or if something went wrong, someone could react and respond and you could have a human intervention that could override some issue in the way that the program was designed. So we've had more and more of those roll ups launch. They've all had various stages of training wheels. And so about a year and a year and a half ago, Vitalik again, Vitalik proposed this framework for thinking about the level of decentralization of rollups.

And he articulated three different stages, stage zero, stage one, stage two, that have sort of become canon for evaluating where roll ups are in their decentralization journey. And the north star for all of them is to get to stage two, which you can kind of think about as having the same security and decentralization characteristics as Ethereum based today is at stage zero. But we're working to get to stage two, and the next stop is stage one. There's a couple things that we need to do in order to get there, both of which are on track right now. One is changing the Security council, which manages the upgrade keys for base.

The second is rolling out fault proofs. The Security council we've designed, we've composed, we've deployed it on Mainnet, we now need to switch base over to use it. And then the fault proofs we have live on testnet right now. We just went through audit and we're in the process of rolling them out to Mainnet over the next few months. And so I think there's a really clear path to us resolving both of those training wheels this year for sure, hopefully much faster than this year, and getting to stage one and then beyond stage one, the next big challenge is how do you start to remove even more of the human input that goes into the roll up.

So, for instance, even having a security council, how do you constrain what the Security Council can do? How do you give it so that all the actions they take have to play out on a long time horizon? In order to get there, we need to have what's called multiclient, which is basically having multiple different clients that are all running the same software that enforce the rules of the roll up. One of the things we've really prioritized as we've built base and built it on the op stack, which is the framework that's open source, that we build along with the optimism collective is designing in such a way where it's easy to get to multiclient, or at least relatively straightforward. We have one client stack which is called op geth and op node.

And then in parallel, we've actually been working with a 16 z and paradigm and others on a second client stack, which is op ref and Magi, which is built in rust. And then there's third and fourth client stacks that are also being explored and built with op Aragon and op Nethermine. And so what's going to happen over the next year is once we get to stage one, then we're going to be kind of hardening all of these client stacks and getting them to work well together, so that sometime in 2025, we can have multiple of these stacks running in parallel, and we can actually get that kind of last milestone to get to stage two. And so it's going to be a journey. We don't have exact timelines for any of it, but I will say that I think we've made a lot of really good design decisions that are going to set us up to progress from stage one to stage two in a pretty straightforward way.

And I'm really excited about the collection of different organizations and people all around the world, all from different teams, who've come together to build this open source stack in the op stack that can make it happen. Noah, you got anything to add? I do, I guess maybe a little bit related to the fact that there's many clients, many teams, many folks working on just the op stack in general. And we run into a hard problem. And I think this has an interplay with how we get stage two is how do we govern this thing?

Noah Citron

When you look at l one s, you get this really nice thing, which is social consensus. There is no real l one state. You can disagree, and a minority or a majority can run a different node. Software on the chain somewhat peacefully forks off. There's a little bit of oddness that happens there, but for the most part, chains can just split in two.

When you have social pressures keeping it in line, when people are acting well, this is very, very hard to do with roll ups, so you need much more restrictive governance at the end, these roll ups are going to want to make changes. The EVM is evolving. It's not likely to stop evolving soon. So how do we decide together when there's a hard button of go or no go on every single upgrade? Yeah, I think it's a really hard challenge.

Jesse Pollak

When we were thinking about building base, we had a few different choices for how we built it. One of the choices would have been, okay, we're going to go build our own whole stack and just do our own thing. Another choice would have been, we're going to work with someone else to co build some of this technology. And where we ended up was deciding to build with optimism, build on the super chain, build on the op stack, which is this fully open source technology toolkit that lets you run a chain. And I think one of the big reasons why we did that was because we saw exactly what you're seeing now, which is that at the end of the day, a lot of this is going to come down to governance.

How do you govern the upgrades to these chains? How do you make sure that they remain neutral and open and permissionless in a global context, even as you have actors like Coinbase, who are obviously like us, domicile businesses, and how do we do all of that in a really thoughtful, meticulous, long term way. And when we thought about doing that ourselves or thought about doing with other folks, we really felt like optimism was really the leader in thinking about governance at the level of rigor and scale and longevity that would actually let us solve those challenges. And so I don't think we've fully built governance systems that can do that yet. But I'm really optimistic and confident that the path that we're on with the op stack, with optimism collective and the governance systems that they're building are going to let us do that in a way that works for base, works for the rest of the super chain, it hopefully works for the world.

Noah Citron

I'm curious if you ever looked a little bit at some of the governance designs that Aztec has been proposing. They've got sort of a whole bunch of different posts on their forum where they have been putting up rfps and discussing things. And they did land on this very interesting idea, which I think no one else has explored, and I hope others do start exploring it, because it's really a fascinating idea where they made the concession that the bridge does not define the roll up. And I think people have argued about this in the past for a while. I think Calvin Fitzgerald from optimism is the champion of the bridge, does not define the roll up.

And they really lean into this idea and say, well, if that's the case, there's nothing actually stopping us from having many bridges to a roll up. The only constraint you have is that each bridge needs to mint a unique token on the roll up. So if you have Alices Bridge and Bob's bridge, and they meant USDC, there's going to be a USDC and BUSDC, which is unfortunate, but it does mean that you can have many bridges, each with their individual governance, which starts to look a little bit more like social consensus. I'm curious if you thought anything about these kind of weird, maybe impractical designs, but maybe there's something we can learn from them. But just before you jump in, Jesse.

No. Maybe you can just define for our listeners what that means. That the bridge does not define the roll up. Yeah. No.

Jesse Pollak

Can you just define that in, like one sentence? Yeah, you just solve this theological problem. I could give you a link to twelve separate blog posts, each of which are like 5000 words. Well, that's great. Well, let's add that to our show notes.

This is like the most confusing, least intuitive thing about building these chains. And I'd say, I feel like I've had many existential crises. I'll try and give in 30 seconds or maybe a minute or less. An explainer in that roll ups. At the end of the day, if.

Noah Citron

You go by the theory of Kelvin, a roll up is a function. It has some inputs, which are transactions, and the function produces some outputs. You can compute this function yourself or have a proof that helps you compute this function or whatever. And that's the roll up. Like what the state of the roll up is when you apply this function to the inputs.

Now, a bridge, or any other way of computing this function is simply an instantiation of computing's function. The bridge can compute it wrong. The bridge can disagree on how you compute it. And Kellan makes this argument, and I think he gave a good talk called roll ups aren't real, where I think he maybe first made this argument. But what he argues is because the bridge is sort of just like an implementation of how you go from input to output.

The bridge doesn't really define roll up. The bridge can break. The bridge can disagree with the roll up state. At the end of the day, there's some social consensus that defines the function that the roll up computes on the inputs to get the outputs. And that function, when executed correctly, defines the state of the roll up rather than any individual bridge.

And what I was saying is really leaning into that and saying, okay, let's have a lot of bridges. It's maybe a little impractical, but it's certainly really cool. So the idea being that there should be some social consensus that ultimately determines the state here, rather than letting the bridges, which can do all sorts of funky, weird things that get problematic. Determinate. Exactly.

And this is sort of the point I was coming across is that even though we may have social consensus, we may all get together and sort of agree what the function should be or how to change in a normal blockchain. You can just run with that when it comes to a roll up. The contract doesn't care about your social consensus. The contract does what it's supposed to do and we have to grapple with that now. And I think it's going to be probably the most difficult thing we're going to grapple with as we go from stage one to stage two.

Jesse Pollak

Oh, I haven't read Aztec's posts, but I do think that this question of what's the relationship between the governance on l one and the roll ups on l two is a really, really important one. And it's one that we've been thinking a lot about and working really closely with optimism on. And I don't think I have any new insights to share here, but I think it's a hard one and it's one that we'll keep working on as we get to stage two. You cited optimism and their governance as a reason that you worked with them. Are you referring to their two house system where they allow token holders to have votes, and yet it's also guided by a sort of council of people who are in this tech for the long haul?

Yeah, I'd say citizens is the way they call it. So it's a two house system, one that's market driven, where you have the token being like one token, one vote, which is proportional to ownership of those tokens, and then the other, which is one citizen, one vote. So they're basically gradually building concentric circles of different citizens who are optimism citizens. And I think it's up to like 500 now or something like that. Those two houses have different responsibilities.

They vote on different things, they have checks and balances. We're now introducing the Security Council, which is kind of a third governance component that's starting to have other checks and balances. And, you know, whether or not, like, the existing instantiation of that governance is perfect, certainly not, because it's just a system that, you know, is incrementally evolving. The thing that I think really drew us to work with optimism is the level of thought that they were putting into it. The way I think about this is, at the end of the day, a lot of this is just like human systems at scale that are informed in technology, are enshrined in technology.

And this goes back to what we were just talking about. A lot of what were even talking about with change is what do the people socially have consensus around when they're writing this chain? What's their consensus around the function that is a human problem. And when you have these complex human problems, I think one of the things that on chain potentially enables is it enables us to design much more flexible systems that can reflect human problems and then solve those human problems with code. And whereas we previously would have used laws that we write in paper and lawyers review and the courts judge, we now have the opportunity to write contracts and code that define programmatic relationships between different people and different entities and enforce things permanently, forever on chain.

And I think that opens up both a huge new design space in terms of what's possible, because we can define things that you could never have defined in a contract. And I think it basically opens up the possibility that we could build things that are way, way, way better, like 100 times better, a thousand times better than any governance system that we've ever had today. And that could let us better express human intent and say, hey, we have all these people who want to make the world a better place, but maybe we're just being held back by the way we can represent their intent in these governance systems that we're designing. And if we can, ten x or 100 x, our ability to represent that intent and to build these governance systems that reflect that intent, I think we can potentially build a much better place. And so that thesis and that intentionality that I think optimism is bringing to it is one of the big things that drew us to working with them.

And I think where we are is still day one. Like the governance systems that have been built are still very, very nascent. But that way of thinking, which is like, this is a tool. We have a new tool that's a new technology that can enable us to build better governance systems, is going to let us accomplish things I don't think anyone can even think of right now. Yeah, it's a hard challenge.

Noah Citron

It's sort of the fundamental proposition of Web three is this idea that you can have, like, networks that are community owned. Chris Dixon talks about this a lot in his book. Read, write owners, and yet how do you manage those things? You don't want direct democracy, mob rule, but you also don't want plutocracy. You don't want autocracy.

There are many examples of authoritarian sort of network systems in web two that exist today. And, yeah, so how do you actually navigate that practically? It's a really intriguing set of problems. If you look at the optimism governance system today, I think the theoretical or the philosophical governance framework that it most resembles, from my perspective, is something called futurchy, which was defined by this guy, Robin Hansen. In the late nineties, early two thousands, which basically posits that the market is very good at certain things, but very bad at other things in particular.

Jesse Pollak

It's very good at finding solutions if it's given a constrained problem, but it's very bad at defining values and outcomes that a society might want to drive. And so his thesis with futurearchy was basically, what if we set up a dual system where you basically had humans defining the outcomes that we wanted to drive, and then markets defining the inputs or the solutions that could drive those outcomes? You created these feedback loops between the human defined part of governance how is defining outcomes, and the market defined part of governance that was driving the solutions? And that could get us to this futurity world that could drive better outcomes. And when you look at optimism and governance today, you kind of see that we're starting to have some shape like that, right?

You have the markets, the token house, where you have people who are voting on specific proposals about what we should be doing. And then you have the citizens house, which is the human side of things, which is defining what are the value systems, what's the constitution, what is the impact we actually want to reward. And those two things can come together to get to basically better outcomes than a pure human system or a pure market system might be able to get to. And so, I don't know. Again, we're still very early, but it is cool to see that we're already being able to use this technology to take things that were previously ideas, but didn't really have a way to be actualized and actualizing them and then iterating on them and learning from them.

Noah Citron

Yeah, futarchy is absolutely fascinating. Prediction markets are one of the reasons I actually got into this whole industry to begin with. Noah, do you have any other questions on optimism, on governance, or any areas you might want to probe there? Yeah, I guess I have one question. I'm not sure how plugged into this you are, but I've been loosely following this interesting shift where Ethereum is spinning off the EVM into its own thing that is not really necessarily governed by it, but it's governed by the collection of rollups, and the roll ups are getting the VM and upgrading.

And from what I hear, the first upgrade that we think is going to happen is probably adding the SEc. P 266 r1. I can't remember. It's r1 k one. One of those curves, the curve that.

Works in the enclaves. Yeah, I'm curious to hear that you were plugged into how you think that's been going. Is there anything that's further down the pipeline? You're excited about it. You want to see the web development?

And also, what do you think end state is? How far off are we going to go from what Ethereum built EVM with? Yeah, so this thing. Yeah, it's been a process that's been forming just in the last six to nine months. It's called Rip.

Jesse Pollak

Rip, which is a funny name, but stands for roll up improvement proposal. It's not an auspicious name. It's like you guys. But hey, sometimes we're stuck with names. And I think one of the really cool things about ramp and rip is that it's kind of like the Ethereum foundation.

Ethereum l one innovating itself. It's rare that you see people be like, oh, we're going to give up control because we think that that's going to lead to a better long term outcome. And that's kind of exactly what they're doing here. They're saying, hey, what we're seeing emerge with this roll up centric scaling strategy where we have massive proliferation of l two s, is that those l two s are having different constraints than the l one, and they're able to explore more aggressively how to leverage those different constraints to get better outcomes for developers and users. And we want to figure out how do we make it so those people are actually power to do that while still keeping them close enough to l one that you don't see massive divergence.

And so that was the intent, I think about six to nine months ago, some people from the Ethereum Foundation Onsgar one other person who I'm totally blanking on started a telegram group and a bi weekly cadence where people are now meeting. We just, you know, are passing EIP 7212, which is the first thing that's gone through Rip, which is adding this signing system to l two so that people can verify passkey signatures and use less gas. I expect that to go back to l one once it's on l two. I think that that's a pretty good proof point that, like, we're starting to make some real progress with this. I'm generally very bullish on this.

I do think that in the medium to long term we will see some divergence from what makes sense for the l one evm versus what makes sense for the l two evm, because l two s are able to just push on different constraints. But I do think we get the best outcome if those things are not happening willy nilly. But instead we're in the same strategy and execution approach where it's like we're setting a long term strategy and then we're empowering people to execute against it. And I think that's the context that rip is starting to create, where it's like we can have this long term strategy which is we want the EVM to remain relatively compatible, but we also want to empower l two to start to diverge from l one, and we want to empower l two to stay standard across a bunch of different roll ups. So developers have a consistent strategy.

Now go and execute on that mandate. And I think it's going to work, I think it's going to work and I think we're going to get better outcomes as a result. I think it's going to help developers and help users. So obviously a lot more proof in the pudding, but I'm positive and bullish on where we're headed so far. And are you worried a little bit that unlike the Ethereum core devs, where not only do they have a shared goal, but the goal is very shared?

Noah Citron

They're working on Ethereum. The roll up core devs are working on their own roll up stacks for the most part, our own roll ups, some of whom view each other as being ruthlessly competitive. Are you worried about rebuilding, as you said, this fantastic core dev community that Ethereum has among the all roll up devs is going to be possible or. Yeah, I mean look, the hardest thing in the world is getting people to trust each other and build together. Regardless of whether you're in a decentralized ecosystem or a centralized company, there's no easy way to make it so people work really great together.

Jesse Pollak

I think this is a different environment than the l one environment. I mean I'm an optimist, so that's something you should know about me and everyone should know about me. But I do feel like having the anchor of all of us contributing to Ethereum and scaling Ethereum and having the leadership of Vitalik and the Ethereum core development community is going to be a pretty strong forcing function to align people to good behavior on this. And my sense is that as people step out of line, there will be not like repercussions, like there's nothing people can do, but there will be social pressure to continue to work well together. And so that's definitely the attitude that the base team is showing up with is like, we want to work with l one, we want to work with Ethereum, we want to work with Ethereum core developers we want to work with other l two s to find common ground and to figure out what are the things that we can push forward together so we can have more of that standardization.

And my hope is that if we set that example and l one sets that example, other people will follow the lead and show up with best intentions to drive what we think will be the best outcome for all of l one and l two. Okay great. One thing that we havent talked about is EIP 4844. We had the den kun upgrade go live in March, which kicked off ethereums scaling stage. I dont know.

Noah Citron

Are people still calling it the surge? Is that like a passe term? Thats what vitality calls it in the roadmap. Right. So yeah you had the merge this shift to proof of stake in September 2022 and then in March weve kicked off the surge, the sort of earliest stages.

How has life changed for you since then? Yeah, yeah. So that happened on March 13. I mean immediately we saw a really big reduction in fees that night. Fees were subscend for a long time and that was exactly what we've been working towards for two years.

Jesse Pollak

And so that was super exciting just to feel like, oh my God, the thing that we've been working on for two years actually is delivering the results that we wanted. Now the knock on effect of us reducing fees by more than 100 x was immediately we started to see a lot more demand. So in the last few weeks we've seen demand more than ten x on base. Basically that has brought a lot more people onto the chain, a lot more developers, a lot more users. But it also has started to expose other scaling bottlenecks because we solved one of them, like the data availability on Ethereum, we drove down those costs a ton.

But there's others. For instance, how many transactions can the blockchain process at one time that they then published to that data availability on Ethereum? And so we actually saw a couple of days in the weeks after that where fees on base started to go way high again because there was so much demand and we had scaled the chain to support all that demand from a capacity perspective. So we did our first two increases of what's called the gas target, which is basically kind of like how much gas or how many transactions can the blockchain process every block. We have about doubled that now from 2.5 million gas to 5 million gas.

And we've also set what we think is a very ambitious but also achievable medium term goal of growing that to one giga gas which is 1000 million gas. So it's 400 x where we originally were, which is 2.5 million gas. And so we're kind of anchoring to this idea of how can we get 400 x in 400 days. We like it, it's memetic. We think it's really ambitious, maybe a little out of reach, but we want to push ourselves to be ambitious in order to accomplish that, in order to scale base 400 x, there's a few different challenges we need to solve.

One is we need to keep scaling data availability. The data availability we created with 444 is great, but it's still pretty constrained. So we're going to grow that really significantly if we are going to support 400 x more throughput on base. The second is we need to actually support, literally the chain to run that fast. It needs to be able to process all the transactions in every block in less than the block time consistently in order to be able to process that much gas.

We've made some progress on that, but there's a lot more work to do. We're really excited about working with Geth, who powers the core client for base today. We're also really excited about new clients like Op Ref, which is a new client in rust that's really optimized for performance. And we've been testing now and seeing really good results. And so we think we're able to push the limits really intensely there and get that up to our goal.

And then the third thing that we need to solve is something called state growth, which is basically as you run the chain faster and faster, it creates way more data that now everyone who wants to run a node has to keep track of. And that means that the hardware requirements get bigger and bigger, and that state sometimes can't fit into memory, which means you need new kinds of storage, you need to start sharding it. And so there's some open research questions there that we need to solve if we want to push the chain to run as fast as we're talking. I'd say the way we're thinking about this now is we've set a very ambitious goal. We have a bunch of really important execution work to do, and we're just going to burn it down.

I think one of the really good things that I feel about this is that me and the whole engineering team that's working on base, we spent five years scaling Coinbase, and obviously we haven't been perfect there. There's a lot of challenges from 2017 to 2021, but we learned so much about what it takes to deliver 100 x scaling improvements in months or years. And I think we're going to be able to take all of those learnings and apply them to base into the op stack, into scaling layer two and layer one, and to build on the legacy of what we've contributed already with 4.84 and make a huge impact over the next couple of years. So that's what we're laser focused on right now. I have the gas cost on base in my menu bar right now, and we're at 90 way right now, which is not low.

It means that we're basically running at our target, which is 5 million gas a second. And that means that with more surges we're going to be over target and fees are going to start getting high again. And so every day I'm waking up and talking to our team about what can we do to increase data availability, to scale the execution bandwidth, and to solve the state growth problem so we can keep bumping those limits and keep driving down fees. Look, I mean, it's a good problem to have, right? The fees have come down and now you're seeing induced demand.

Noah Citron

You've got all these people who want to build and transact and you've got to deal with the reputation repercussions of that. Totally. It's a good problem to have. Definitely a good problem to have. We've been looking at the views too, actually, because Noah created some nice dashboards.

So we've been measuring the gas usage on base and how the blocks have been, how much they've been filling up. Yeah, it's pretty cool. And I mean, like base is the biggest consumer of blobs right now. We're seeing just so much demand for people to build on base, to transact on base, and we're just going to try and keep up and I'm sure it won't be all smooth sailing. I'm sure there's going to be a lot of bumpiness.

Jesse Pollak

And I met with our builder community on Friday and the thing I said to them is, give us feedback, share what you think we should be doing, but also be patient with us. We're going to try and scale this thing 400 x in 400 days. And that's going to be a hell of a journey and it's not going to be perfect. And so the more we can all just come together to figure out how to do that together, I think the better off we'll be. How are people using base today?

Noah Citron

And assuming that you're able to pull off these optimizations that you're able to bring the costs down for transacting on the network and the fees. How do you want people to be using it moving forward? Yeah, yeah. Well, I mean, if you go into an east end today, it costs a cent. And so even with the demand that we're at right now, it's still super cheap and way, way cheaper than it's ever been before to transact on l two.

Jesse Pollak

And I think what we're seeing is that people are doing all sorts of things on base. I mean, obviously USDC for payments, both peer to peer and commerce, has been growing. We've seen a ton of trading activity where people have been trading on decentralized exchanges and doing perps and other things. A ton of borrow and lend activity. We've seen games proliferate on base pretty quickly.

In particular, a lot of casual games think, you know, early Facebook platform in 2007, 2008, those people are starting to build on chain and it works really well for the current transaction costs and the way people are engaging, we're seeing a lot of like local things start to come on chain. So Blackbird, for instance, which I think a 16 z is an investor in. They've been bringing restaurants on chain, which is dramatically improving their margins, driving more business through loyalty. This summer, we're going to have a lot of on chain stuff as a part of on chain summer. So I'd say, like I said at the beginning, we're seeing emerge on base is the next generation of the Internet.

And just like with the App Store and the Internet, you had things from every single part of the economy being transformed. We're seeing the exact same thing happen on base. I think as fees go down further and we increase capacity more, we're just going to see more of everything. It's kind of hard to predict what exactly will drive the most growth, but I'm very bullish in the next year on the consumer use cases, social things that can be driven by a feed like Farcaster, where we actually have the opportunity to take advantage and see the benefits of that viral growth that really can only come from sharing and then channel that into on chain apps. That's a place we've been really leaning in.

If you look at Farcaster usage across chains, it's like 70% base market share today. And I think that's going to be a place we continue to lean in because we think that social platform is going to be a huge distribution channel for new on chain use cases. It's very cool to be seeing all these new apps coming out now. Finally, we've been talking about for years that the apps are coming, the web. Three apps will be here, they're going.

Noah Citron

To be really cool consumer experiences. And now it's actually happening. Now it's actually happening. Yeah, it's epic. It's really epic.

Jesse Pollak

And I've been working on chain and crypto for ten, almost eleven years now. And I did not think it would take us eleven years to get here. But I do think that the industry is a little bit kind of traumatized from the last 15 years where it's like we're so conditioned to flat growth punctuated by these speculative manias, that we aren't that prepared for what's to come, which is going to be actually pretty normal, which is viral consumer growth. And it doesn't look like what we've seen. Like, it's not going to be flat with speculative maze.

Instead it's going to be, we're going to start going viral and then it's going to get steeper and steeper and steeper and steeper until the entire world is on chain. Well, that is a bullish prediction. I think we've hit the inflection point already. I think it's starting to show up in the metrics. For instance, if you look at l two usage month over month, I think we're starting to see that kind of bend up in the curve, and I think it's going to play out on the order of years.

But this cycle of growth is not going to be the same as the last ones. It is going to be driven by technology, driven by use cases, driven by people using on chain to build the next generation of the Internet. And that's going to bring in billions of people that otherwise just won't be here. Yeah, I liked your mission statement, the world on chain. I know you like to say on chain is the new online.

Noah Citron

It just reminded me of the latter day America online. Yeah, exactly. We really do think about this as the next generation of the Internet, and we think that the transformation and movement of the world from online to on chain is going to be equally as impactful, if not more impactful, as the movement that we did in the early two thousands from offline to online. And so it's going to be a sea change, but I think it's going to be a really positive sea change for the world. So, one more note, but I'll just say on the team, from the editorial perspective, we've had discussions about when and whether to hyphenate on chain.

Jesse Pollak

Where are you guys at on that right now, are you still hyphening or no hyphen? I've been no hyphen since day one. Thank you, Noah. We appreciate it. No hyphen on.

On chain. No hyphen on open source. Everything. One word. Yep, I'm in that camp, too.

Noah Citron

Teddy Roosevelt gave a famous speech about, like, not having hyphenated Americans. Like, you can't be italian american or german American. You just be american all the way. But anyway, yeah, I'm anti hyphen, too. I think that's right.

Jesse Pollak

And I think, you know, we saw this exact transformation with online. Right on dash line was what we originally called. It was originally e dash mail. And then as those technologies became a part of our lives, the hyphen disappeared. Because now this was just email, it's just online.

And it was just a part of our day to day experience. And I think the movement, the cultural movement that's happened around on chain and the kind of meme that, you know, has taken the Internet a fair amount about, like, not having the hyphen. So it's not on dash chain, but it's instead on chain. It's about embracing on chain as a. Part of our lives.

It's about saying, this is something that we all need to get used to. It's something that we all need to embrace, because it's going to be a part of our lives forever. And I think, you know, maybe we're a little bit ahead of the curve. Maybe we could wait a few more years to drop the hyphen. But I'm someone who loves to live in the future, and I think that it feels better and looks better, people rocking more easily, and I think we're going to be able to help the world come on, chain faster.

If we talk about it without the. Hyphen, is it working? Is it catching on? Or is this going to be like mean girls trying to make fetch a thing? I think it's catching on.

When we look at the data from consumer preference perspective, from a builder preference perspective, we see a lot of energy around the world on chain. Historically, people have tried a bunch of different things. They've talked about bitcoin, they've talked about blockchain, they talked about crypto, they talked about web three. All of them have had a fair amount of baggage attached to them. They've been pretty technical.

I don't think we've actually been able to build successful mental models for everyday people around what this thing is. And I think the thing that I really love about on chain is that first off. It's a very clear analogy. You can say on chain, like online, and everyone immediately gets it. Immediately they're like, oh, this is a new technology platform.

And then the second thing about it is that it is fundamentally about the platform. We're not talking about money. We're not talking about speculation. We're talking about technology, and we're saying, hey, this is a new version of the Internet that's on chain. And I think that grounds people in the right way of thinking about what we're doing, which is that we are building a new technology that enables people to build incredible new experiences that can, of course, use money and, of course, could include speculative things.

But that's just one part of it. And really what the outcome that we're trying to drive is like in the early days of the Internet, we're trying to build a better future by leveraging this new technology to build new kinds of applications that bring more people into this global economy that we're building. And I think that mental model, it removes a lot of the fear, the uncertainty, the threat that sometimes people can feel when they get into that kind of, like, money speculation grounded place. And they can instead think much more expansively about, oh, this is opportunity. This is something that I can benefit from in this new world that we're building.

Noah Citron

I'm all for that. The revolution will be on chain, not just online. That's exactly right. Cool. Thank you so much for joining, Jesse.

Jesse Pollak

Yeah, thanks for having me. It was a great chat. Yeah, I love it. Excited to keep building with you guys. Likewise.

Awesome. Thanks, guys.

Noah Citron

Wait.

Layer 2, Rollups, and Building Onchain (with Base)

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1. Introduction to Rollups

2. Technical Deep Dive

3. Decentralization in Corporate Settings

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