Why JPMorgan and Shopify Are Rolling Out New Products on Ethereum Layer 2 Base - Ep. 855
🎯 Summary
Podcast Episode Summary: Why JPMorgan and Shopify Are Rolling Out New Products on Ethereum Layer 2 Base - Ep. 855
This episode of Unchained features Jesse Pollock, Head of Base and Coinbase Wallet, discussing the significant real-world adoption of the Base Layer 2 network by major institutions like JPMorgan and Shopify. The central theme is the maturation of blockchain technology, making it finally ready to deliver on the long-held promise of making traditional business infrastructure 10x to 100x more efficient.
1. Focus Area
The discussion centers on the real-world enterprise adoption of Ethereum Layer 2 technology (specifically Base) for improving core business operations in Finance (JPMorgan) and Commerce (Shopify), moving beyond speculative crypto use cases into fundamental efficiency gains.
2. Key Technical Insights
- Smart Contract Efficiency: JPMorgan’s JPMD (USD Deposit Token) pilot replaces legacy, off-chain settlement systems involving “thousands or hundreds of thousands of lines of code” with streamlined on-chain smart contracts requiring only “tens or hundreds of lines of code,” drastically improving efficiency.
- Base Scalability Milestones: Base has scaled its compute capacity (gas per second) approximately 20x in 18 months, moving from 2.5M to 35M gas/sec. While the resting throughput is currently 100-150 TPS, burst capacity has reached nearly 2,000 TPS (e.g., during Friend.tech events), with plans to scale toward tens of thousands of TPS.
- Seamless Consumer Abstraction: Coinbase is leveraging smart accounts and batched transactions to abstract complex on-chain actions (like wrapping Bitcoin, lending, and withdrawing USDC) into single, seamless “one-tap” buttons for end-users, exemplified by their Bitcoin-backed loan product.
3. Market/Investment Angle
- The “Blockchain, Not Bitcoin” Thesis Realized: The industry is finally seeing the realization of the early 2015 vision where blockchain technology improves backend financial systems, driven by ready infrastructure (low-cost L2s, better wallets).
- Deposit Tokens vs. Stablecoins: JPMorgan views its deposit token (JPMD) as a superior, scalable alternative to stablecoins for institutional use because it is based on fractional banking principles, though both asset types are expected to coexist with distinct roles.
- Accelerating Enterprise Adoption: The public announcements by Shopify, Stripe (via B2B acquisition), and JPMorgan have created a “wake-up call,” pushing skeptical businesses to actively seek stablecoin and on-chain strategies to lower fees and expand globally.
4. Notable Companies/People
- Jesse Pollock (Head of Base and Coinbase Wallet): The primary guest detailing the technical and strategic rationale behind Base adoption.
- JPMorgan (Onyx Unit): Launching JPMD, a USD deposit token for institutional clients on Base to streamline internal settlement.
- Shopify: Rebuilding its commerce stack on-chain using Base to process USDC payments more efficiently for its merchants.
- Malala (Global Co-Head of Onyx Blockchain Division): Highlighted for stating deposit tokens are superior to stablecoins due to fractional banking scalability.
5. Regulatory/Policy Discussion
The discussion touched on the regulatory context implicitly through the distinction between permissioned institutional products (JPMD) and permissionless stablecoins. The seamless integration of on-chain actions within the Coinbase app (like the Bitcoin loan product) suggests a strategy of building compliant, fully on-chain financial primitives that fit within existing regulatory frameworks while leveraging blockchain efficiency.
6. Future Implications
The conversation strongly suggests the industry is moving toward a unified global economy where the boundary between the “crypto economy” and the “off-chain economy” dissolves. Within the next year, accepting stablecoin payments is predicted to become standard practice, similar to accepting internet payments today. The focus will shift from if businesses should adopt this technology to how they can implement it to solve existing operational problems.
7. Target Audience
This episode is highly valuable for Crypto/Web3 Professionals, Institutional Finance Strategists, and Enterprise Technology Leaders interested in the practical, large-scale application of blockchain technology beyond DeFi speculation.
🏢 Companies Mentioned
💬 Key Insights
"The group, Gungeshka Duranday, also known as Predatory Sphero, says the attack was not financially motivated but intended as political sabotage."
"The Iran-Israel conflict has reached the crypto arena with a pro-Israel hacker group claiming responsibility for a $90 million exploit on Nobitex, Iran's largest crypto exchange."
"The Senate will not vote on the Clarity Act, a key crypto market structure bill, before Congress breaks for its August recess, dealing a setback to President Trump's legislative agenda."
"The US Senate has passed the Genius Act, a landmark bill establishing the first federal regulatory framework for stablecoins, by a 68 to 30 vote."
"Because at the end of the day, if you look at the last five years of crypto, I think this is probably one of the things we've done worst as an industry. At times, you've gotten so caught up in the infrastructure and the technology, we've lost sight of the fact that the only thing that matters is, are we making people's lives better by solving real problems?"
"One really important thing about this, though, is that they are building this product in a fully self-custodial manner. So it's designed such that users are still in control of their wallets; they're going to have the ability to eject if they want to, and ultimately, they'll be the ones in control of their assets of the transactions that they make."