Jesse Pollak on the Base app launch: a crypto everything app with social feed, payments, and creator monetization

We have Jesse from Coinbase coming in. Yesterday, Jordy went over to Coinbase's launch event for Bass. Let's bring him in. Jesse, welcome to the stream. How you doing? Welcome. The walk-in camera. The walk-in camera is working. There we go. Let's go. Thank you. Thanks for having me. How you doing? Good to see you.

You too. Good to see you. Thank you. We got one more juice for you. Oh, fantastic. We're drinking. We're We're drinking juice today. Virality juice. How's that? Viral juice. Fantastic. Fantastic. How's it going? How's the show been so far? Super fun. It's been a crazy day on the internet. You guys are lucky.

You launched yesterday and this morning. One cold play conference changed the timeline forever. I know. I saw that this morning. I woke up. I was like, "Wow. " Glad this happened yesterday. Oh, yeah. Because I mean, it's so hard to watch these days.

We're having a couple people from OpenAI on and it's such a big day for um legislation in the United States. I mean, the Genius Act. The Genius Act and the Clarity Act just passed. I'm finding out. Well, the president is going to sign I think tomorrow. Yes.

Genius app stable coins will be passed and signed into law in the United States this year. I mean this week, which is an incredible milestone working towards it for three years, four years, 5 years.

I mean, the impact is that for the last decade of crypto, there hasn't been regulatory clarity in the United States, which means that entrepreneurs and consumers haven't actually been able to benefit from this technology.

And we've been working to build bipartisan consensus that we need rules of the road in order to make sure that crypto works. And I feel like Coinbase has always been like the conservative one. And it paid off because during the end of the Zerp era, basically all of Coinbase's competitors went out of business.

It was it was chaos, right? And and and I remember talking to a to a public markets investor at that time and he was just saying like like I feel like Coinbase has the mandate of heaven. Like they are making it through. What was the what was the low? Was it like $7 billion at some point?

Uh yeah, in in 2022 the share price went to $32 which was below I think the series E price and and and I had joined you know like a couple years before the series E price but you know we all experienced that like Yeah. What was your path to Coinbase? Did you get Were you building something else before?

Okay, break that down. I dropped out of school and started a company. It was called KFF. We did identity and so the whole idea was how do we build an identity that's the next thing after passwords that was decentralized that anyone this was cryp a crypto company?

It wasn't quite crypto but we worked with crypto companies. So, uh, you know, Bitfinex, we were actually providing like kind of off and login for them. And so, Paulo, like we go way back because we've been building forever. And so, that business didn't work.

And then when we were winding it down, I was basically trying to figure out what do I do next? And I love crypto. And is identity like KYC like I upload my I take a picture of my photo. It was actually a passwordless login mechanism. So, almost like you hold your phone up to log into WhatsApp.

It was like that but back in 2012. And so, we were a little bit before the time. But when you look at the security architecture that we built, it's actually almost the same as what we're doing now on base and what people are doing with pass keys.

And it's this incredible thing where I've now been working on it this same problem space for almost 12 years and we're feel like finally we're finally getting there. Okay. So you so you land at Coinbase and the way uh Brian Armstrong tells it, you go to him and you say, "I need $1 billion to not right away.

Not right away. Not right away. But I want to get to the $1 billion. I know you did it for a lot less, but I want to know what I That's my question for the future. But tell me tell me two pizzas. That's two pizzas. No. Um, so I joined I joined as an engineer. It was an it was an aqua hire process.

My whole team actually sold to another company to Twilio. But I was so excited about let's go. And so I joined Coinbase, joined as an engineer. And then uh pretty quickly on uh I just started leading teams. They asked me, hey, can you take on a team? I took on more.

And for the next five years, I led all the consumer businesses on the engineering side. So if you know Max Bransburg, he runs our consumer product. Me and him were product and engineering counterparts with him running product and me running engineering.

And then after five years of doing that, I thought I wasn't going to start another company. I'm like a founder. I I actually put in my notice and said I'm leaving in six months. In those five years, what products were you building? I was building Coinbase, Coinbase Pro, and Coinbase Wallet. Okay, got it.

So like anything that you've touched as a Coinbase user, those were my teams. We rebuilt the whole product from scratch. Migrated us to react native coinbased wallet the first like decentralized product in the Coinbase ecosystem.

So I think I think the context here is like the the core business and the and why the launch yesterday is exciting is the core business was always uh centralized and it was a gateway to get on chain custodial um and and we'll get into base in a bit but you were working on these sort of decentralized experiments early.

Exactly. Yeah. working on the decentralized experiments early. What were you saying it's so early at the time? You know, I'm an optimist. I've gotten from you. He said he hit he he typed GM uh and posted it probably 100,000. Yeah.

But um I thought I was going to leave, but I actually started having conversations with Brian about what did the future of Coinbase look like and what would it look like if we leaned even further into this kind of decentralized world, built more things on chain because Coinbase had started 10 years ago and it was, you know, traditional web 2 business.

And so again, the first thing I did was I went to Brian in the kind of fall of 2021 and our exec team and said, "If you give me a billion people and 60 employees, this was like peak 2021 60 employees, I'll turn Coinbase into a DAO. " Okay. And they were they were they were like, "Haha, okay.

Why would you have done we're a public company? " Yeah. If he had I I know what you do with a billion dollars if you're Meta and you build a big data center and you have to pay, you know, half of that to Jensen Wong over at Nvidia. But what would you have actually done with a billion dollars?

I I don't even know what is that. We didn't really have as good. Okay. It was more just like let's take the constraints off. Let's take the constraints off. let's go and do the thing, right? We have this big public company. It's a crypto leader, but it's still built on web 2 architecture.

How do we move it onchain in this new way? And so, it was the vision was there, but the execution strategy wasn't there. And so, well, the in and the other context is that Coinbase has been in this incredible position of being the gateway to get on chain. And you see this with the Circle IPO.

People were like, wait, Coinbase makes a lot of circles revenue as a stable coin issuer.

But you guys had always basically said everything on, you know, you guys do whatever you want on chain and and a bunch of great companies sprung up to to kind of service that market, but you had to be hands off, which I imagine was pretty frustrating. Yeah.

I mean, I will say that early on, so Brian has always had the vision of the self-custodial world. He's even had the v vision of a super app in many ways where the first version of Coinbase wallet was actually called Toshi. It was a messaging product with apps in it. Oh, interesting. This was in like this is in 2017.

It's green. put it out basically. And so then we we kind of pivoted Toshi to Coinbase wallet, which is the self-custodial wallet that millions of people use that folks know and love. Um, and we've worked on that for the last 5 years, and that was primarily focused on trading in money.

But as we've built base over the last two years, which has really been a builder ecosystem where people are building apps, we've seen two problems emerge.

The first is that um everyday people when they're trying to use crypto and trying to to kind of figure out what's going on here, it's really hard to actually find things to do and that are useful. You know, maybe they come on chain for a coin, but then they kind of get lost. They're like, "What are all these things?

How do I actually use it? " And then on the other side, we saw that we had thousands and thousands of builders and creators who had these incredible products that they were building, but they couldn't actually get them in front of people. Like, we were missing this connective tissue.

And so 10 months ago, I talked with Brian.

Um I kind of came back to running the Coinbase wallet team which I'd worked on for a long time prior and we kind of jointly articulated this vision of well what if we built the the kind of app that solved that problem and brought all those things together and this is what we launched yesterday.

It's the base app and it's an everything app that lets you create, earn, chat, trade and discover this pay for things with Shopify uh at er1.

you know, you can now pay for juice with base USDC on Shopify powered by Bass Pay, you know, like we're the whole thing kind of comes together in a new way where because we now can bring together this marketplace of kind of developers and builders and businesses on one side with consumers through a really easy to use experience, we're going to be able to to grow crypto a lot faster and spin the flywheel.

Okay. Would uh would I imagine launching Bass in the way that the product is today? I know it's a pure software business. So very different from the uh tradition you know Coinbase's you know traditional business which is effectively you know acting as this regulated uh or uh you know financial uh institution.

Would it have been possible to launch this a year ago or did you need the the White House to launch uh some tokens and and a few other events? Well I I think the biggest thing that we needed is we needed the technology to mature right.

So when we had this vision 3 years ago of building base, the the first thing we started with was actually the platform, right? It was the chain because we'd spent a year trying to figure out, okay, what's the product we build to kind of bring this next generation? Explain though.

So you had the chain, but there was no token attached to it like I feel like playbook. We went back to the tried andrude method that people had been following for a hundred years, which is that you focus on building a product that people love. Okay. Right.

Like I think there's been this whole distortion in crypto for the last 5 years where people are like oh you get a token you pay people to use your product and we basically said from the beginning no we're going to build a chain it's going to be a developer platform and we're going to figure out how do we make it the best place for builders to build and that's exactly what we did over the last two years.

But if I if I take it to like the Bitcoin analogy it's like the reason that people set up data centers to run the Bitcoin network is because they mine Bitcoin and that has financial value.

incentive that gets distorted all the time when people run the other participants to uh to help run the infrastructure or or or you splitting it across different groups like like how does the actual chain stay on? Yep. Well, the first thing to know is that Bass runs on Ethereum.

It's a layer two that sits on top of So, as long as the Ethereum miners are happy, then Bass runs. Exactly. And then there's a decentralized network that's also based that people use to get access to the network.

And the thing that's bringing people to the network is that they're building things and then they're using those things. And so here's two examples. Uh the first one is USDC. We're seeing a huge amount of growth in payments both in the United States and outside the United States in USDC.

And that's because people are using products like Shopify which has rolled out to millions of merchant where they're actually taking USDC in their wallet and they're paying for things. And that's global. It's fast. It's cheap. It happens instantly.

cool rewards that the the it's retailers effectively which is if you pay with USDC will give you one point back or something like that because you're not eating the debit card or credit card. Yeah. So it's 1% back with base pay and you can earn 4.

1% on your USDC when you're holding it which is pretty good right and it's an instant global payment method so any business in the world can integrate it and then anyone else in the world can pay for things. So that's one example people are coming to base for payments and stable coins.

The other example is a little bit more out on the kind of like ny curve in terms of what we're seeing, but we're really excited about this is what the focus of the event was yesterday, which is really around the creator economy, right?

If you look at the last 20 years, you've had so much creativity pour into the internet, but the vast majority of that creativity has been put into platforms where creators actually don't earn that much money. Right?

If you're an average creator who has less than 10,000 followers or if you're in another country like Nigeria or Argentina, you're going to be posting and filling up this kind of content world with valuable creativity that then other people are looking at, but you're not earning anything.

And so, one of the big things that we're focusing on with the Bass app and one of the reasons why people are are coming to use it is that when you post on base, you actually earn.

And this is because we've built uh a new economic system where the content is actually valuable and then the value gets flowed back to the creators. I think this is a novel use case for this platform that we built with bass and base chain.

But I think the question is if if somebody opens a base app, their wallet's loaded and they start scrolling, does that cost them money? Does that cost them money? How does that actually it doesn't cost them money, but like I can literally show you um you can decide if you want to support a post.

And so like here this is on my feed and I'm just like Jesse. I'm on my feed. I'm creating content. Uh, I posted this great base juice content and oh, there's a bug live classic. There we go. It happens. Base juice content, right? And you have the normal things you see here, the like, the comment, the retweet.

And then you have a new thing. Yeah. Which is market cap. Sure. And so this is basically the value of that content. And this one's worth $15,000. This one's worth $84,000. This one's How is that possible? I mean, I like my I've been on YouTube for five years.

Best video I ever posted got 8 million views and I got a check for 20K from YouTube. Well, that's actually pretty good. YouTube is one of the platforms that pays creators really well. Took 50%. And I thought that was fine because they brought me all the users. So, I was actually pretty happy with that.

But like how could how could something have a piece of content have market cap? Well, yeah. I have no one else wants to buy it unless they want to buy the revenue stream. And there's been some of those projects where I could sell the rights to my payout on that. Yeah. How do you startup startup CEO?

Well, this is on on X, right? Well, where where I Well, I where no market cap on this one. Startup CEOs can't even hug their chief people officer at a concert in this country anymore. 1. 6 million views, 50,000 likes. 50,000 likes. I'm sure I'm sure the creator payout will be decent.

But this this looks to me like potentially a a nine figure market cap on if I had ripped it on base. Yeah.

Well, well, seriously, like seriously, I I, you know, on these ones that I posted, like this one I posted yesterday that now has an $84,000 market cap, it's done like $4 million in volume, and I earned 1% of all of the volume. And so, that means I've earned like what 40 $40,000. That's insane, right?

So, you get a viral feel that doesn't feel like like economically fair. Well, but think about this. The place where that value comes from is the fact that your content is valuable, right? How have these platforms, right?

How have these platforms built multi-undred billion dollar businesses if the content isn't valuable running ads but what's bringing you there the content and then they pay you to bring more content because an ad is a way of monetizing the value of the content but the content itself is valuable and what's happening on the base app now is that that value is being uh kind of figured out in a free market and then the the kind of the the economic offloads of that value are getting redirected back to the creators We love ads at this show.

Will we be able to see ads in the base app? I know you guys acquired Spindle. Uh well, we have Stay tuned in the in the next in the next I want to run I want to run some talk about talk about the integration in the in the kind of mini apps. I uh Dan from Farcaster has has been on the show.

I know you guys have some integration with with the Farcaster network. Is that right? Yeah. So the whole social feed, all of the connection graphs, so you know have followers and following, it's all powered by Farcaster. When you're posting content, it's powered on Farcaster.

When you're coining content, that's powered by Zor. It's another protocol. What we've done with the base app is we brought them all together. That's cool, including Shopify. Including Shopify integrating, including XM XMTP, which is powering messaging.

They just raised a $20 million series B, and they're an incredible decentralized messaging protocol that is powering secure encrypted messaging with agents in chat. And so one of the really cool things, I don't know if you guys saw it in the demo yesterday, is you can be in a chat with your friends.

You can just like drop a bet in there that you can say to agent, hey, like let's bet $5 that the Dodgers are going to win tonight. Okay, that's nice. And it's immediate bet. And then you can say, hey, send $10 to all of my friends.

And it just works because it's built on this platform and you have these open protocols that are working together. And so going to your point, we built on Farcaster because we believe in building open protocols. And one of the things that open protocols enables is it enables other people to build on top of them.

And so this is where we've built this open now and it just shows up in the app. And here's another one. I don't know if you guys have seen this, but this is when you open the base app today. I think the forecast, which is like literally you can open this up and we're going to be on the live stream here live now.

There I am. Wow. There you are right there. Literally, it is so cool. It's But one of the really cool things about we had and and to be clear, this this was organic third party and and you have some new sponsors.

I don't know if you guys realize this, but you have a bunch of crypto brands here that have now gone and said, "Hey, we want to sponsor you. " And bracket, for instance. This is sports betting on base. It's awesome. It's so fun. You can interact with an AI.

But the thing, our lawyers, we're going to our lawyers are like blood hounds. They're going to they're going to be like choing at the big thing that's really incredible about this app is that it's all connected and so I can actually tap in bracket and I be like, "Okay. " Oh, okay. Yeah. Oh my god. Come on, Jesse.

What's going on here with this mini app? Uh, and and in theory, Yeah. This is this is the start of the auction the auction driven but but but but but but this is this is the start of the auction driven uh ecosystem that actually that actually results in real transfer value. Real real value is created at some point.

So this is a new I like bracket now bracket is right here and then I'm like okay I'm just going to buy bracket and I'm be like cool let me buy uh $5 of bracket. This is not financial advice. This seems this seems like we're not going to buy we're not going to buy.

Well, the the thing that's fun is like it's just wildly chaotic. So, it's an entirely new surface area. Coinbase has never been about chaos, but and and I'm not saying that base is, but creating an environment that's just like a freeforall, decentralized, it's open.

So, uh yeah, I mean, you said that the goal broadly is to get a billion users on crypto crypto on chain. That's the right phrase. Uh give me the state of the union. Where are we today on that journey? Like what are the different buckets and how big are they? Yeah.

So, we're trying to build a global economy that increases innovation, creativity, and freedom. And the metric that we use basically to measure that is do we have a billion people on chain? Yes.

And of course, I'm going to get five billion people on chain because we're get everyone who has an internet connection on chain. But a billion is a nice number and we get to make it repeatable.

I'd say that when you look at the data today, there are hundreds of millions of people who hold Bitcoin globally around the hundreds of millions. Hundreds lot of people hold Bitcoin. like Bitcoin is very well used, but it's not something that people are using their dayto-day life.

I'd say there's probably tens of million people around the world who are using stable coins. And then I think we're in the the millions of people right now who are really starting to use these onchain products. And that's across base, it's across Salana. We're seeing innovation everywhere.

And you know, we like to work with everyone. We think about bass as a bridge, not island where we're actually connecting with everyone and figuring out how we can help them be successful. But I think it's still really really early days. And the goal with the base app is to like kick up the next kink in growth.

So my question is like when we're when we're following the the chat GPT story, there's obviously DAUs, but the chart that everyone's obsessed with right now is that chat GPT minutes per day is skyrocketing to 30 30 minutes per user per day, something like that. We're seeing lots of queries go up.

My question is like with financial products, I I do think that there's a there's a benefit to having a lot of people own Bitcoin. I think it's an awesome network, a check on authoritarianism. It's awesome.

But like I don't know that I should be like interacting with Bitcoin daily, but what are the other metrics downstream to to to like to like quantify like whether or not someone's on chain?

Because like if someone's like like if I'm if I'm in my bank account, you know, messing around with dollars all the time, I'm actually probably unhappy. Yeah. Yeah. Well, the first thing I'd say is that um definitely Coinbase is a traditional financial product where they're growing.

They're trying to be the best for trading. It's awesome. They're making such good progress. so excited about the retail dex integration which is basically making it so that anyone coinbase can buy any asset on base. Yeah, just works listed. I'd say base though we don't really think about it as a financial product.

Okay, there's money involved because money is a part of everything but it has social ads core. It has chat. It has apps and so people are going to come to base just like they come to their other apps. Time on site should be onite is the thing that we're looking at.

We're looking at we're looking at we look at kind of two things. We all Yeah.

Dow mows and we look at like weekly active users and then we look at weekly transacting users where it's like are you actually doing a transaction on the chain where it's like buying something or sending money to a friend or something like that.

And so the active user is kind of an engagement metric and then the the transacting user is like a deeper engagement. Yeah. Yeah. So higher use of the actual product would not be a bare case like it is with my you know my traditional financial app with which I'm opening. It's probably a problem.

I'm probably like owe someone money or overdrafted or something. Exactly.

And the really incredible thing about this kind of conversion rate of active to to transacting is we have the data of before and after where like it was really just a money app before and now it's a real social product but people are doing all these things with money and we're seeing way higher initial user conversion rate to actually doing something on chain.

That's awesome because now it's not like oh you have to go like make an investment decision. It's like you can like your friends post. Yeah. Right.

or you can like you know tap to pay at a store that you're going to and that transition from a speculative thing which is so important and such a big important part of base in the crypto economy to a daily thing that also has like way bigger TAM in terms of the number of people who do social products and other things on a daily basis.

That's that's really the shift we're trying to make. Yeah, it's super cool. Like the like we know that the everything apps work elsewhere. Yeah, they don't work in America for some reason. This feels like an end runaround, a different strategy to try and make it everything app for a specific subculture right right now.

But now, you know, a billion people is that a subculture. And what I'll say is we were just at Arowan. I just spent two hours at Arowan and people with we were giving out free juice. I was filming content. We got some good content coming later. Uh and I was just talking to people about the juice in the app.

And when people hear uh especially like millennial Gen Z creators, when they hear, "Do you want to join a free social network where you can get paid to post and do you want a free juice? " They're like, "Hell yeah. " Like, I've been posting on other social networks for a long time and I've never gotten paid. Okay?

And so that hook of your content is valid. You get paid and you can get paid for it because that value is going to get unleashed by the free market. Yeah. And then we're gonna distribute it on cryptoeconomic rails that are this next generation internet platform. It's crazy. It's epic. Well, good luck.

We got to get to our next guest. Thank you for having us. Can we get a gong hit on the way out here? Let's go. Get the bass app at bass. app. You can get on the wait list. We're going be letting more people on every single day. There we go. Founder mode. Talk to you soon, Jesse. Have a good one. Great chatting. Do it.

Up next, we have Higsfield, Alex from Higsfield AI. We've been using Higsfield AI to generate crazy photos. Jordy posted one of uh of a horse.