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- [00:00]
A
Let's say base token came out today, like, what would it trade at? I would, I would probably conservatively think that it could probably come out at like 20 billion. I think it could probably run to like 40 or 50. It will definitely renew more interest in base, especially when mind share across blockchains is, you know, it's a very hard thing to capture.
- [00:19]
B
That does, like, open up questions of did coin shareholders get some kind of claim to it? Because there is, I believe, revenue numbers that are shared on the Coinbase balance sheet based off of the base sequencer. And so you get into some, like, weird, weird areas of understanding whether or not there is some sort of claim to shareholders and they have like a fiduciary duty there. I have no idea, but that's a complicated angle.
- [00:46]
C
Hi, everyone. Welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. Mantle is pioneering Blockchain for Banking, a revolutionary new category at the intersection of TradFi and web 3. Follow mantelfficial to learn more. Today's topic is the updates from Basecamp. They're exploring a token which that, you know, sent shock waves throughout the system, even though interestingly, I'm sure most people, if they had to bet money, they would have bet that that was going to happen at some point. But here to discuss is Ryan Yee, most recently of Coinbase Ventures, and prior to that, Coin Fund. And in a little bit we'll also be joined by ICO beast merchant of narratives at Proof of Play. Welcome, Ryan.
- [01:32]
A
Hey, Laura.
- [01:33]
B
Thanks for having me.
- [01:35]
C
So, at Basecamp today, Jesse Pollock said that base has to become decentralized and he also announced that they're exploring a base token for the first time. This is big news because for so long they had said that they were not interested in doing that. It's even in the X bio. So what was your first reaction to hearing that they're exploring. Exploring having a token?
- [01:56]
A
Yeah, I think it's a very exciting development. I think that naturally, as base has grown a lot, it's obviously grown without the use of a token or a gig of token, which kind of goes to show you how much sort of fundamental growth on the user side and builder side that base has been able to attract without it. And obviously it sounds like the base team now feels that for their next leg of growth, they have sort of a critical mass, at least of builders and liquidity on the chain that to kind of supercharge and to really compete at the largest levels, they're now Exploring a token to be able to do that. So it feels like a natural evolution, but it's still a pretty shocking thing to hear, especially from. Yeah. A company like Coinbase who's centralized and public and, you know, I think this is a very big move for them.
- [02:53]
C
Yeah, yeah. And for them being the first crypto company in The S&P 500, there's just a lot of, you know, regulatory things that they have on them that you know, kind of make it just something a bit more challenging. I mean, he kept emphasizing that they're going to do this in a regulatory compliant manner, but obviously the path for that has not been charted yet. I was curious, why do you think they're announcing that they're exploring doing a token rather than just launching one?
- [03:21]
A
I think that there's probably a lot of unanswered questions on their side too, like, as you know, launching a token is no small thing. There's a lot of details that goes into it. Allocation, utility, how do we sort of talk about this thing in public? I think there are kind of two things, Right. So one is that now that users and builders are aware that there is going to be a base token, I think you're going to have just a surge of activity that's happening that's going to happen over base at this time. So a lot of users paying for transactions, it's going to attract a lot more builder teams to actually deploy on top of base. And then I think on top of that, they just released the new base at tda, which has a wait list. And I would imagine that that waitlist is only going to want to grow even bigger and bigger. So I think by announcing this, it will definitely renew more interest in base, especially when mind share across blockchains is. It's a very hard thing to capture Mindshare, and so I think it kind of serves that purpose. Yeah. And then secondly, I think there's just a lot of complex details that they're probably still trying to iron out right now. And I think the big thing too here is there is obviously regulation and legislation that's passing through the US Congress right now related to how to classify certain tokens. And so I'm sure that's an important input that they're probably waiting to see how that's going to pan out before they finalize the details of what they want to do.
- [05:00]
C
Yeah, yeah. But I don't know, I still feel like, I mean, they could have just launched one, but I guess maybe it's more like controlling the narrative because Even if they had just decided to launch one, at some point somebody might have leaked that this was going to happen. So. So one other thing is, you know, he said that to kill the fud, they were committed to building on Ethereum. And I found that interesting the way, you know, the, I mean it's a very short clip, but the rationale he gave was something like we benefit from being part of a connected global economy. And I wondered what you thought about that decision. I could argue it both ways. I could see Ethereum, obviously it's not going to be going anywhere anytime soon. It's extremely decentralized. But at the same time crypto hasn't really gone mainstream. And so there's this competition amongst similar blockchains and I feel like, you know, the end result of that isn't necessarily like decided. So I wondered what your thoughts were about how, you know, they committed to building on Ethereum.
- [06:07]
A
Yeah, I think it shows alignment that, you know, I think Ethereum is definitely on its path now. It's becoming institutionalized as an asset and a chain. Right. And so if you ask anybody on Wall street right now and you ask them what are the three, what are the three things that you know about crypto, they're probably going to say Bitcoin, stablecoins and Ethereum at this point. And so base has been built on evm. That's been a decision that they've made early on. And I think as Ethereum as basically the settlement chain for all types of assets begin to start to really take form on the Wall street level of institutionalization, I almost see base as kind of like the front footed, sort of like institutional and retail BBR of Ethereum in a way, especially like in the American side of things. Right. So yeah, I think the benefit is obviously that, you know, they can grow with Ethereum.
- [07:04]
C
I was going to say, I don't know if you remember on the chopping block, Tarun, he basically said at one point he was like, oh, it's BNB for white people. But anyway.
- [07:19]
A
No comment.
- [07:22]
C
But keep going. I cut you off.
- [07:23]
A
No, just to say that I think Ethereum has continued to have critical mass among developers and so base is obviously contributing to that. And so it's more of like we might as well align on the thing that's already working and with us now this thing becomes bigger collectively.
- [07:42]
C
Yeah, that makes sense. I'm curious how you think they're going to launch actually before we get there. What do you think the token allocation will look like? Or what do you think it should look like. So, two questions. What do you think it will look like and what do you think it should look like?
- [08:00]
A
Yeah, so I think at the very least, if you look at a typical token projects allocation, it's really divided between three people. So one is the team itself, the second is the early backers and the treasury, and then the third is the community. So I think if you were to take that analogy towards base token, it's pretty 101, right? I would expect that a large portion of it would probably be held by Coinbase on their balance sheet.
- [08:31]
C
Define large is that.
- [08:33]
A
I'd probably say anywhere between like, yeah, like 20 to 40%, I would guess. I would say that there's probably an additional, you know, 20% held by like an independent treasury, which is managed between the base team, Coinbase and the other participants in the community. And then I think the rest will go to the broader community, whether that's through a public sale, whether that's through airdrops, whether that's through sort of a continuous distribution method. But yeah, I would guess that over time you basically build enough ownership, especially my Coinbase aside, to incentivize Coinbase to continue to provide value and provide flows on top of these.
- [09:16]
C
And so when you say, because initially you started by saying the team and then the investors and the ecosystem, so are you putting Coinbase in the investor bucket or the team bucket?
- [09:29]
A
So it's basically both. I think it'll depend on kind of like how the base team actually ends up spinning about spinning out, whether as like an independent entity or not. I think the way that I would probably think about it in the first way is that there's maybe formally there is like some spin out that happens at the entity level, potentially that entity will probably continue to be a subsidiary under Coinbase in some capacity. Capacity, and then Coinbase will probably have some internal compensation plan related to the base tokens that Coinbase owns and then they basically are able to distribute that to the team. So when I use the word Coinbase here, this is more all encompassing because that also includes the team allocation as well. That's probably how I think about it.
- [10:18]
C
And I guess you're saying base might be spun out, so what do you think that could look like? And if that were to happen, you still feel like Coinbase would keep some portion of the tokens or. Yeah, just talk about that.
- [10:33]
A
Yeah, exactly. So up until this point, Coinbase has been funding a team of base. Right. Whether that's their salaries and tech costs and all these things, they're Basically treated as another internal product group at Coinbase. So I would imagine that that continues in terms of the relationship between Base as a product team or as a team in general in relation to Coinbase. It's just that they're probably going, instead of thinking through traditional, like getting paid through Coinbase Equity or something like that, that probably changes to something that's more in line with distributing base tokens. And so I think there's that angle. There's also another angle here where maybe the base team actually does spit out as like an independent entity fully, and then maybe Coinbase does own them 100% as a separate entity and then they, they still have this like formal relationship between, you know, you guys are building on base, helping hit certain KPIs, helping hit certain, you know, metrics that we hold you to, and then that's related to the amount of budget that we're willing to give you from a cash perspective or like a token perspective. But you know, I think like the details like tdd, but I think at a very high level, functionally you should just think of this as like the base team continuing what they're doing right now, but them kind of being treated as this arm's length project related to Coinbase.
- [12:04]
C
Okay. And basically you think that that's how they'll quote, unquote, decentralized base, like they'll make it sort of like the uniswap labs of Base or something like the front end? Is that what you're saying?
- [12:16]
A
Okay, yeah, probably, probably.
- [12:18]
C
And you're just, you're just like, like why is it that you're saying that that. And are you saying that you think that's likely or just like a possibility? Like what, how, you know, where is this coming from?
- [12:30]
A
I mean, it's just based on looking at how most startups, I think, in the crypto space are effectively structured today. Right. So feel like at most startups, especially the US startups, they have, you know, what is like an offshore foundation that actually issues the token and manages the community. And then you have the onshore team, which is usually some equity company like Delaware C Corp or something like that. And that is the entity that owns all the ip. That's the entity that all the team is employed under and they're the ones that are actually building products in the roadmap. And so I would imagine that this probably has something that looks very similar where, you know, the base team as is is like the base labs or base equity entity, like whatever you want to call it, like that's probably still, you know, has a formal relationship in terms of ownership to coinbase, the parent organization. But then the actual token, how that decides to get issued, I don't know. But you know, that might be through like some offshore entity, but that offshore entity would probably be issuing tokens of which that allocation would be going to Coinbase and then Coinbase manages, you know, how those base tokens are distributed internally and.
- [13:43]
C
Okay, but why are you saying offshore entity? Like at least the way that I was interpreting some of Jesse's remarks about how they want to do this in a compliant manner and everything is like they were basically saying we're going to be lobbying for, you know, like the Clarity act is coming up. Right. So like I assumed that they're saying like, you know, because like Coinbase has a huge presence in D.C. like we all know they're very influential there or, or recently influential. They haven't always been. But the point is that like, you know, my thought was like, the rules around all of this are not being. They haven't been hammered out, but they are being hammered out and they could be hammered out in a way that would enable Coinbase to, to spin out base in, in this way and potentially then that would be how base would decentralize. What do you think of my hypothesis?
- [14:35]
A
Yeah, I think that's completely right. I don't think this token launches until Clarity app is signed into law. I think that is the big if I had to think about from a timing perspective, that's probably one of the biggest catalysts. I know that right now Clarity got passed in the House, but it needs to go through the Senate. And it's also unclear even if this does become legislation, there's probably some buffer period after that in which these laws can actually start to be enacted. But you know, just as a TLDR of like the high level drop, I'm not lawyer for a regulator or anything, but just based on my read of it, it effectively establishes, hey, like what is, you know, there are tokens and on one side there are commodities and there are securities. You know, where in that spectrum does this token basically lie? And I think based on the different rules or the different sort of guidance that Clarity might give give for those goal posts, that should be able to give a much better sense of what type of token do we actually want to launch as base? And therefore what does that actually mean in terms of the setup that's required around the rules of decentralization that might then basically impact how we would actually go about the entity structuring or the allocation structuring or the token structuring. My feeling is that they want to make this token as decentralized as possible, which means they want to make this token as the furthest away from what would be traditionally called a security token. So like a tokenized security or like a tokenized stock. They definitely probably don't want this to be in that side of the spectrum. They definitely want this to be more in the spectrum of what we would call like a traditional utility token, like ETH or these other tokens, like L2 tokens, L1 tokens that are out there.
- [16:24]
C
Right, yeah, that. I mean that it makes a lot of sense. So let's now also talk about, you know, how we think they're going to launch this. You know, you kind of mentioned like the Base app, which, you know, obviously would be a great way to then design some kind of Airdrop and ICO beast who's going to be on the show in a little bit, said, and this is, this is not something I have been able to confirm. So, you know, he basically said that this is a quote unquote leak that he got from Basecamp and x dot com. So, you know, TBD on the veracity of, of that. But he's saying, and this is not out of the realm of either possibility or even, you know, just common sense. He said BASE is going to be launching a points farming campaign in Q4, 2025, including Base Blue. He also said hearing rumors of NFT stats bringing back his prediction arc for value estimates. So anyway, so what do you, what do you think would be, what do you think would be the optimal way for Coinbase to launch this token? You know, whether AirDrop or ICO or something else?
- [17:35]
A
Yeah, I mean, it's probably going to be a combination of those two things. Right. So there's like three aspects of this, I think. One is how do you distribute tokens to builders? And I think that'll probably be measured by some amount of transactions or the amount of gas consumed by your application on top of base. And we could probably run stats as to which those projects are and they will probably be given some allocation for being early to base and building out the ecosystem. I think the second is, I'm just going off of what you were saying in terms of this report. I have no knowledge of this, but it does make sense to me that their goal would probably be to really make TBA and the Base app the sort of the consumer front end of base. And so they're likely going to use that as the main consumer and user funnel to really grow and own the relationship that they have with the consumers. And then yeah, points campaign completely makes sense to me like through that interface. And so you know, that's probably more on the user side of things. And then lastly, I think the way that I would think about this one is, you know, I think lately at least like on a public sale aspect, I do think that's probably going to happen. So if you think about a lot of people have been comparing Coinbase and Robinhood to each other and if you look at Robinhood, they have this product where you can basically go earlier in the life cycle and invest in IPOs now. So when IPOs come out as a user you can basically join that and fundraise through that mechanism. I think they also now are announcing stuff where you can even invest pre ipo, know in the sort of secondary rounds, like late stage EC rounds I would imagine. You know, if you look at projects that exist today in crypto, that's beginning to happen, right. Like that ICO sort of crowdfunding platform Meta is kind of back now with projects like Legion and Echo. Yeah. And I think Echo is like, is a pretty big project on base, like.
- [19:49]
C
Yeah. And then I think they have like sonar.
- [19:52]
A
Yeah, exactly. So I would imagine that they take that product in order to run, you know what would be like the biggest like ICO sale for base tokens through a Coinbase or something like that. And that would be their answer to like a Robinhood style product. But in a way that is crypto native and Coinbase native. And because it's base token like you know, you want to come out with a bang. And this obviously would be like the biggest like raise or the most interesting race. So like actual market.
- [20:22]
C
Yeah, I love this. So ICO beast has joined us so we are going to take a very quick word from our sponsors but I'm sure he will have a lot to say about what Brian just said. So we will hear from him in a moment. Mantle leads the establishment of blockchain for banking as the next frontier you are is the access layer that transforms Mantle network into a purpose built vertical platform the blockchain for banking that enables financial services on chain UR unifies and vertically aligns with Mantle's focus on payments, trading and assets. MI4emmeth Protocol functions FBTC supported by developer grants, ecosystem incentives and the industry leading distribution platform through the UR app rewardstation and BYBIT launch pool. All economic activity within UR will be captured by Mantle Network to further Drive value to token holders and establish its significance in blockchain for banking. Follow mantleofficial to learn more. All right, so we're back now and ICO Beast has joined us. Welcome ICO Beast. And I'll just remind everybody he is the merchant of narratives at Proof of Play. Welcome.
- [21:27]
B
Hey Lauren, thanks for having me. Pretty big day for the base ecosystem.
- [21:32]
C
I know I said at the beginning of the show that this was quote unquote, big news and yet I'm sure if everybody had bet money, they would have all bet that this was going to happen. So I'm curious know, obviously we're just talking about all these details around, like, how are they going to sell it, what's the allocation going to be, et cetera. But I'd be curious just for your, you know, like, initial reaction when you heard this news.
- [21:54]
B
Yeah, so my initial reaction was I knew it. Which I think a lot of people probably they were kind of that same boat. Although I posted a little bit about it back into 24 and early 25, just because I was really active on base trading virtuals and a whole bunch of other tokens there. I was like, I bet you that we'll have like really great wallets for this airdrop. And a bunch of people were like, there's never going to be an airdrop. Why would they do it since they have a stock and it's not really like understanding the base and coinbase are not the same entity, but I was excited to hear it. I think it's really interesting. I am a little bit curious that they like gave themselves a lot of wiggle room by saying that we are exploring the idea of a token, which I think everybody wants to read between the lines there, but they have tons of wiggle room to delay or if they really felt like they had to at some point they could even pivot away from it and never do it because they're exploring. And so it's, it's an interesting thing. I think the announcement was crafted well just to give them the flexibility to operate how they want to going forward.
- [22:54]
C
Yeah. You know, so I have not been following super closely what's going on with the Clarity Act. But you know, in my head I was like, oh, maybe it's just that the negotiations are going well enough that they feel they can at least use this language. Like they have more than 50% confidence that they will be able to actually launch this. But because it's not a done deal, clarity hasn't passed that. That's why they chose this word Exploring that was sort of how I read this, sort of like split the baby way of announcing. So we're going to get to the question that we had been discussing with Ryan, but I did also want to ask before we get there, just do you have any thoughts on what you think the token allocation should look like? Because Ryan and I were also discussing that before you joined and I was just curious to hear, you know, what you thought that should look like.
- [23:41]
B
That's such a tough one because airdrops are really hot topic right now. There's been a lot of discourse, especially on crypto Twitter the last week or so about what airdrop's purpose are and kind of what they should look like. I would hope that it would be largely to users. But also we know that if you give too many tokens out to users, then your chart looks really bad because everybody wants to sell it. So I don't know, I think it probably, probably if it's following the base ethos that I've. I feel like we've all kind of watched play out over the last year or so. It'll be heavy towards builder incentives, so people actually building things on base or using the base app, mini apps or like really generating a lot of people showing up in the base ecosystems of virtuals. Brought a bunch of people in. You've got Aerodrome, obviously a huge protocol on base. Like, I. I imagine there'll be pretty solid allocations for people that have brought users into base and are going to continue doing that going forward.
- [24:36]
C
Yeah. Ryan's guess was Coinbase would retain maybe like 20 to 40% of the tokens. Like what do you. Do you agree with that? Or if you don't have like a number, what do you think of Ryan's number that he was thinking?
- [24:50]
B
I think that's a totally reasonable amount. Except I've been thinking today just how exactly what a network token even means for them. And so I have to assume that in some ways it's going to benefit from sequencer revenue or other network effects. And if that's the case, you'd expect them to retain a decent chunk of the token, just have claim to a large amount of the sequencer revenue. So I mean, that seems entirely reasonable. Also, like if they are allocating a good chunk for themselves, in my opinion that signals a pretty good thing for the token price because you wouldn't expect Coinbase to get a huge chunk of this thing and then just immediately nuke a chart. So I'd feel more comfortable with them having a decently large supply than say, giving 40% of the community. Because you know it's going to happen if you do that.
- [25:40]
C
Yeah. Okay, so let's talk about how they might launch it. You know, you have this name, iCob. So we were just talking about the airdrop as well, but I was wondering, wondering like what you thought would be the optimal way for them. And it doesn't even have to be just like this initial, you know, sale or whatever it is that they're end up, that they end up doing. But, but like over time. And then we can talk about things like the utility, like what is going to be the utility of this token. But. But first, what do you think would be the optimal way for them to launch this token?
- [26:11]
B
I kind of wish that they hadn't even announced it and then just did the arbitrary method of saying, all right, here's a token today at the same time, I think that they like. Ultimately, the most successful airdrop in my opinion, is going to be one that aggressively civil filters and that's either voluntary or done via bounty. So you either let people link all of their wallets together and let that then act as a single entity under all those wallets. We've got so many privy wallets these days and other burners that are set up for various applications. Everybody's got tons of wallets on these networks. Or you end up putting out a bounty for catching civil clusters like LayerZero did and a few others have, and incentivize hunting people that are doing that to maybe increase your share or get a bounty, basically just because you really do want really widely distributed tokens, especially if it's to increase a network effect or to help give ownership of the network or really decentralize it. And so Sybils, while they're very clever and good at what they do, it ends up kind of confounding that purpose. So I think it's going to have to be something that really cleverly deals with the fact that we've all got a bunch of wallets operating on these networks.
- [27:18]
C
Yeah, that's such a good point. You know, like my mind was blown because, you know, Brian Pellegrino came on the show during that period and he basically said that they were finding, you know, like these civil operations of. I forget the number. It was, I think he said like 50,000 or 75,000 wallets that were all like one person's opera or, you know, one entity's operation. And I was just like, wow, okay, that's, that's insane. Hopefully I didn't get those numbers wrong. Anyway, okay, so now we've kind of caught up because now you've answered the same questions that Ryan did. But I'd be curious for both of you to talk about. What do you think the utility of the base token should be?
- [28:00]
A
My guess is that I think Ethereum and ETH and the properties that that token has are very similar to the types of things base token will probably be. Right. And so there's probably some level of, you know, basically the amount of profits that you're generating as a chain through fees and in basis case it's sequencer revenue. I would imagine that there's, you know, some percentage of that that's basically being burned in real time in basically as like a ratio or relation to the amount of like fees that base is actually generating. So I think that basically gives almost like a baseline on how to value base token just in terms of a productive asset. I think the second thing that we'll probably see with base token if it ever launches is it'll likely take on a lot of similar properties as the main sort of defi liquidity asset on top of base. So if you look at sort of how USDC has been treated by Coinbase on top of bas, you'll notice that there's a lot of perks that come with it. Right? So if you hold USDC on base, I believe, or spend usdc, you actually don't have to pay any gas to lose right now with usdc, the other thing too is obviously it's like one of the largest assets and liquidity pairs that exists on top of base defi. And then lastly, I believe there's some opt in where I think you can receive rewards like 4% interest if you hold USDC on top of base as well. So when you look at something like that, that basically shows you the types of benefits that come with a token that Coinbase is effectively behind. Response. Right. Even though USCC is a stablecoin, I effectively view it as a token that is by Coinbase. Right. And so then if you just take that analogy and you apply a base token, you can pretty much see a lot of the similar strategies that they probably employ on top of here. Right. So I would imagine like the largest all the tokens that end up listing on base, I'm sure like, it just makes more sense to just pair that with like a base or like pair that with like a USCC over pairing it with like a E or like a wrapped E asset, for example.
- [30:12]
C
So you're viewing it more like A rewards token. But then do you feel like, because you know how Jesse hinted that they want to decentralize, do you feel like then at a certain point in the future it might even be used for governance? Like. Like, I didn't know if there was any connection between the fact that he was saying that at some point they plan to decentralize and if you think the token might be related to that or not.
- [30:35]
A
Yeah, I mean, I'm sure governance is within the realm of possibility here. My feeling though is, you know, even if you look at the governance of like the largest sort of blockchain ecosystems, it's. It's still a very messy thing. Right. And I think generally speaking, when you're thinking about governance, what part of the roadmap are you actually opening up to the community? Right. And I think that's a very core question. My sense is that because something like BAS is extremely integral to how Coinbase is thinking about its onchain future. You know, I would never imagine that like Coinbase or Base wants to open up extremely important product or engineering decisions to the community. Right? Like, that's things that they want to own and they want to basically control. And so, yes, they probably will be governance, but I wouldn't expect there to be governance over extremely material product or engineering decisions.
- [31:29]
C
Yeah, and I only meant like potentially years down the road or something. Like, I could see it starting as a rewards thing and then evolving over time, and especially if they do, you know, end up truly decentralizing it. But I agree, like, right now it's mostly decentralization theater.
- [31:46]
A
Let me mention two other things too. So, okay, one is, I think when you have a token that, you know, let's say base token came out today, like, what would it trade at? I will probably conservatively think that it could probably come out at like 20 billion. I think it could probably run to like 40 or 50. When you have that, you can now do all sorts of like crazy growth campaigns. You could do investments, you can even do M and A of token projects. Right. And so it opens this entirely new balance sheet strategy for base. And then I think the other thing too is that for the governance aspect, you know, one thing that's very interesting in the trap to the Clarity act is I think it basically labels no one person can own more than like, I think the number is like 20%. I need to read the traffic in. But no one person can hold more than 20% governance power within like an ecosystem. And so I would imagine that, you know, even though let's say Coinbase collectively might own more than 20% of the token. They probably will be trying to delegate that across different actors across the ecosystem in order to basically pass that decentralization test. And so, you know, there's probably going to be like big community members, like, you know, whether that's the base team point may seem the biggest base builders, like the biggest DEFI projects, all those kinds of things. Like they will have to open the community up and have that actually represented in terms of the governance power. But as to whether or not that actually ends up impacting big decisions on product roadmap from a governance perspective is still very okay.
- [33:21]
C
Ico.
- [33:22]
B
Yeah, this one's a really complicated question because there's a number of ways they could go about it. Like if they end up influencing where revenue goes from the secrets, or any case that does open up questions of coin, shareholders get some kind of claim to it because there is, I believe, revenue numbers that are shared on the coinbase balance sheet based off of the base sequencer. And so you get into some weird areas of understanding whether or not there is some sort of claim to shareholders and they have like a fiduciary duty there. I have no idea, but that's a complicated angle. I saw a 16Z crypto kind of quoted themselves an article they wrote a couple of months ago about token taxonomy today, mentioning network tokens and app tokens in the same classification. So app tokens are an interesting angle because you end up basically using those as kind of vouchers or in app or just in network tokens specifically don't necessarily have extrinsic value, but they're used as basically trading chips inside the things that you're developing. So that doesn't seem quite as appealing to me as an airdrop recipient, because I want something that could go to 20 or 40 billion. But that's an interesting way of looking at as well if they want to do some sort of capture and basically turn into their own version of base USD. But again, that doesn't make sense because of other Coinbase interests. So I don't know, they may actually really just be in the early stages of exploring it and are kind of feeling everything out. I would be interested to see it function similar as like a liquidity token, like Ryan was saying, because that is pretty interesting. I don't know how they would do it without cannibalizing some of the other DEFI protocols necessarily. There's a lot of question marks here for me to where day one, I'm not sure if I have a good handle on what they really could do to make this a valuable token without also going against other competing interests.
- [35:14]
C
Yeah, I don't know if this is something too far afield, if they would feel like they're screwing over their own users but you know, you could even imagine them like, you know, it's sort of like this protocol native stablecoin issue that like, you know, obviously we saw that with you know, Hyperlook at the competition for just a certain ticker became so fierce. But you know, Mega Eth, they also announced a protocol native stablecoin and Shuyao was just on the show saying like she thinks this is going to be the future that like everybody's going to do this. And so you could see, yeah them potentially wanting to like bacon sort of certain things to the base protocol that are sort of native not only a stablecoin but use the base token to, to facilitate that. I don't know, I'm just spitballing but I was also wondering because like you know, it's not only that. So, so okay, they at the same time, and this is something that Ryan and I also discussed but we didn't ask you ICO yet. Jesse also said that they're going to commit to building on Ethereum and I just wondered what your thoughts were about that.
- [36:25]
B
Yeah, I mean, I hope so. I'd like to think that all the L2s are aligned and they all are going to end up being value accretive for Ethereum in practice. I don't know if that actually is going to happen in the long run but I do believe that the core ethos of base is aligned with Ethereum right now. That is part of the question about Token too is like if it ends up being a gas token or something of a substitute there or like even a validator style token, you have to stake it or something then it does start to bring up questions of so is the revenue from the sequencer that normally would like you'd hope in the end state be going back to help basically pay rent for living on top of Ethereum. Are those things aligned? I don't know but it's good to hear them affirming that they're planning to do that. I think that's kind of the gamble that Ethereum took when it went on this roll up scaling journey was that the L2s wouldn't actually end up just spinning off and doing their own thing later on. So hopefully that's the outcome. That's at least what they're verbalizing at this stage.
- [37:25]
C
All right. And then let's also now talk about the fact that. So they also announced at the same time that they're integrating with Solana. Apparently they've already done this in testnet and I wondered, do you feel like. Yeah. What do you think of the fact that they're doing that? I don't know how good of an experience it will be. And I was just curious what you thought it meant for this sort of Ethereum Solana competition that we've been seeing play out for a while.
- [37:53]
B
Yeah, I'll have to see how it feels in practice. I think that we're all acutely aware of the issues of liquidity, fragmentation and the complication of having things spread out across a whole bunch of different chains and layers. And eventually somebody will have some extremely useful, very smooth, unified liquidity layer where you're doing something on chain, whatever that means. Exactly. And nobody. You don't know which chain you're using. It's all abstract, away from the end user. We haven't gotten there. I don't really know how soon we're going to get there, but I feel like I haven't seen a ton of cross chain EVM to SVM scenarios. Normally you have to push funds across via Synapse or Relay or one of these other protocols and there's no like real native integration between the two. So that's interesting and I'm. I'm very curious to see what the user experience is like. Second and third order effects are hard to know until you see like how good the user experience. If it really is like super seamless, then it ends up being interesting to see which chain the value actually ends up accruing to. And I think that depends on which chain is actually exporting their native token. More I think. Totally seems to think that Solana is going to be the one doing that. They'll be shipping it to Ethereum, mainnet and various L2s. I don't know if that's the case or not, but that ends up being, I think, the operative question, the more interesting place to focus if the experience is truly seamless.
- [39:11]
C
Brian?
- [39:12]
A
Yeah, I think my view of that is it's just base admitting that Solana is its biggest competition. If you think about. Seriously, if you talk to any of the biggest projects in the space, especially those that are deploying on base, you know, they admit that like Salata is the only other chain that they would actually consider like building on top of which is a big step for a lot of these projects because, you know, These are two extremely different tech stacks. And that's, that's a big cost to actually like think about as a project. But projects are like willing to entertain that because, you know, that's, that's kind of with it. That's like a positive ROI decision for them because that's just how Trump's law is. I think my view here is there's like liquidity defi on one side and then there's consumers on the other side. I would actually say that Solana probably has a better consumer aspect and a user aspect right now and a user culture. You know, if you look at everything that's happening on Pump and you know, anything that has like a more normie, like Gen Z, if they're using any crypto app, it's probably on Solana. Like that's what's happening right now. And if you compare that to Base, I think Base obviously has users, but it's definitely more Defi and Liquidity centric. And I actually think that's the best part of BAS is all the Defi and Liquidity projects. And it makes sense because Coinbase is a financial services company and that's why all the core products that would be popular on base would naturally result of that. So whether that's the Bitcoin lows that are on Morpho or the Dex trading that they're thinking about doing on Aerodrome or channeling to Base on Chain, that makes sense. So I think in a way it's like if you think about liquidity today, yes, Solana has 12 billion TVL and BAS has 5 bill in TVL. Right. So salon is leading, but I think in like three, four years I could easily see bases like Defi, Liquidity probably matching Solana or even out competing because they have the introduction and the on ramp that Coinbase brings to it. Now what, what Base doesn't have compared to Solana is as strong of like the user and consumer culture. And so I think by doing this, what they're really saying is like, hey, like, you know, if you're a project that's considering deploying on Solana now, you could deploy on Base if you want to access more liquidity or considering like growth from an EVM perspective and I think vice versa. If there are projects on base that are considering leaving to Solana, which has happened in the past now, they don't necessarily have to leave base completely. They can sort of tap into Salon as a second option. But I think like at a high level takeaway, when I saw that it's like, oh, like, yeah, base is paranoid of Solana and like, Solana is the biggest competition for them. And so I think this is their way of basically being able to get the builders and the developer funnel and access both ecosystems at once.
- [42:09]
C
Yeah, I'm sure you guys saw. I, I can't remember who tweeted this, but this tweet went around where someone was like, oh, if you remove the L1s and stablecoins, then, you know, all the biggest apps are on Salana. And so, you know, that points to what you were talking about, like, just the user experience. But then what was interesting was, you know, because, like, obviously if you look at Defi, then obviously Ethereum dominates in Defi. But Kyle somebody, and I think, like, at some point in the Twitter conversation, like, somebody pointed that out or I forget, but like, Kyle Simani wrote back, like, oh, you know, with my debt, we're going to be deploying our Sol into Defi to boost Sol Defi and bring more liquidity there. So I was like, ooh, ooh. Like, we could see a lot more competition between Ethereum and, you know, Solana Defi coming up, which, or maybe, I don't know. What do you guys think? Do you think that's possible or likely?
- [43:04]
A
Yeah, so I think it's the right strategy, but the problem is that I think Ethereum right now is just so much more ahead when it comes to Defi and liquidity. Look at the two other biggest players that are entering ebm, It's Robinhood and Stripe. And so my question is, what is the Robinhood for Solana? Who is the Stripe player for Solana? Who is the Coinbase player for Solana? I don't think they really have that yet. Right. And so that's why you have the WCS that affect Solana, obviously, putting together these structures for Wall street liquidity to enter Solana, that's great, but that's not product. Right? Like, product is like, you need an actual front end that is bringing users and new liquidity into your ecosystem. And so far I haven't seen that happen for Solana yet. That's mostly happened on the Ethereum side. But what I do give Solana credit for is they've gotten this far without that at all, which is actually really impressive and they deserve accolades for it. And the community is like, okay, well, if we're not getting institutional liquidity, let's just make our own liquidity, let's make our own Palm tokens, let's just figure this stuff out by ourselves. And that's awesome. But I do think in a five to ten year horizon, I think my question is who is that centralized player? And that is really bringing that new liquidity into Solana right now. And that's a big question mark. I don't actually know what that is.
- [44:25]
B
I think I super agree with that take because you've got Coinbase utilizing things like Morpho for free yield on cbbtc and you've got AAVE that lives on Ethereum obviously and has been like battle tested and there's some serious deposits there. I think that I saw that up to like 77 billion TVL or something, which is crazy. And so you have these institutional partners and massive, massive, massive liquidity that has been built up over years on Ethereum and throwing liquidity in the system is part of the solution. But it's not the only solution. On Solana you've got things like Meteora, which I love as a defi product. I don't expect to see institutions lping meme coins on DLMs. That just doesn't make much sense to me. But it's a great product. I don't know if they have the institutional champion yet to like really fully utilize it or if it even scales up to that, that style of usage because it's great for what the primary use case on Solana is right now. But will that be the primary use case to attract like real top tier blue chip players? I don't know.
- [45:26]
C
Okay, so I'm so curious about this because I sort of feel like we're seeing this big competition. It's like the, some, some kind of like huge competition is about to start and we're seeing all these players line up right. So there's so many different ones here that I, I could throw in the mix. So you know, some of the names that we've discussed are like obviously Coinbase Base and we're, I'm talking about the on chain competition. So you know, Coinbase via Base, Robinhood, who we mentioned, there's Solana and all of its sort of user facing apps. There's you know, I don't know, like Binance, Telegram, even the stablecoin issuers, Tether, Solana and then there's also Hyper Liquid which has just, you know, skyrocketed to a very, very important position. Everybody can kind of see like it's, it's, it's not even on the verge, it's like already doing it. So curious like, you know, how do you think this big competition where you know, you see all these players Lining up with their different strengths. How do you think that will play out? And I'd be interested to hear from both of you and either one of you can go first.
- [46:34]
B
Oh, man. I think if I knew the answer to that, I would be perfectly positioned for the next five years of crypto. And I definitely don't know the answer. So I've got exposure to all of it just because I think that crypto as a whole, this is only going to continue expanding. My thoughts are we're not going to see Solana companies or Ethereum companies or even crypto companies in the next three years or so. It's just going to be companies and they're going to be using crypto rails for pieces that make sense and not using it for pieces that don't. So I think that for me at least, it just means having exposure to everybody that is lining up and then let the chips fall. Because I think that, like, having exposure is how you win in this situation.
- [47:13]
C
Ryan.
- [47:15]
A
Yeah, ultimately, I think, you know, crypto's financial technology and the core product of crypto's tokens at the end of the day. And so I think as long as you're in the business of we have the most tokens being generated on our chain and we have the most volume and flows on those tokens as a result, I think the combination of those two things basically would determine what this rate. Right. Solana's version of that is the meme coins, and that's great. And Base's version of that is all the coinbase liquidity that's coming onto base. Right. And hyper liquid, obviously is all the, you know, the onchain purpose markets for the broader crypto space. And so this is ultimately like the two sort of vectors I would consider as like the most important things going forward. I think the question then remains, like, what identity do you want to take across those two vectors? And I think I view Solana very much as let's increase just the number of quantity of tokens that we have and then let's bet that eventually over time, like, we can produce a lot more sort of volumes with scale over time. Whereas I think in the base aspect it's like, okay, I think we can bring tokens that have a lot of volume scale, like the wrapped coinbase, Bitcoin or like USDC or something like that. But how do we create an economy where there are a ton of tokens being issued on our chain right now, and that's why they're experimenting with things like creator coins and all this other stuff right now that's happening. And so, yeah, this is you're in the business of tokenization if you're a chain and, you know, those are the two ways that you probably need to win.
- [48:53]
C
All right, Ryan and ico, thank you so much for joining this conversation.
- [48:58]
B
Thanks, Lana.
- [48:59]
C
Thank you. Unchained is produced by Laura Shin, with help from Matt Pilchard, Juan Aranovich, Margaret Curia, and Pam Majumdar. Thanks for listening.
- [49:10]
A
Sa.