Sep 23, 2025 · 42m · y-combinator
Why Now Is The Best Time To Build In Crypto · Y Combinator
0:00 / 0:00
▶ Watch on YouTube →
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this Y Combinator interview, Coinbase's Jesse Pollak joins Harj Taggar to explain why foundational infrastructure scaling, regulatory clarity, and stablecoin adoption have created a golden age for building onchain applications. They discuss actionable startup opportunities across Fintech 3.0, asset tokenization, developer starter projects, and the joint YC x Coinbase Build Onchain initiative.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The partners hold 22.8% of the talking time here. How this is scored →
The partners as informed peer 5.2 Guest teaching 2.7 Guest disagreement 0.5 The partners pushing back 0.5
speaking balance: gold is the partners, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 2:05 Rejecting the ChatGPT parallel
Jesse directly rejects Harj's premise that crypto is having an immediate consumer breakthrough moment, pointing out mainstream fear and lack of everyday understanding.
Hardest push from the partners ▶ 22:57 Challenging the reinvention of legacy financeHarj highlights the criticism that crypto is merely rebuilding centralized mechanisms like chargebacks and escrow rather than offering genuinely new paradigms.
Biggest teaching moment ▶ 4:36 Layer-2 scaling architecture breakdownJesse provides a comprehensive technical breakdown of how L2 rollups compress transaction volume on top of Ethereum's decentralized base layer.
The partners hold their own ▶ 9:51 YC insights on crypto regulatory frictionHarj demonstrates domain knowledge by detailing how regulatory ambiguity and securities laws derailed past YC crypto applicants compared to hardware founders.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The partners as informed peer | Guest teaching | Guest disagreement | The partners pushing back | Why |
|---|---|---|---|---|---|---|
| Title Card: Fintech 3.0 | 4 | 3 | 2 | 1 | Harj introduces the joint YC-Coinbase request for startups and asks if crypto is having its ChatGPT moment. Jesse politely reframes the premise, pointing out that mainstream users are still fearful rather than experiencing magic consumer moments. | |
| Infrastructure Evolution: Achieving the Broadband Moment | 5 | 4 | 0 | 1 | Harj raises historical criticisms regarding gas fees exceeding wire transfer costs and asks for a clear explanation of L1 versus L2 architectures. Jesse walks through the technical scaling breakthroughs and Ethereum layer-2 rollups. | |
| Recommended Starter Projects ('Hello World') for Engineers | 4 | 3 | 0 | 0 | Harj prompts Jesse for recommended starter projects for software engineers transitioning to crypto. Jesse explains building automated market maker interfaces and smart contract swaps. | |
| Regulatory Clarity as a Catalyst for Startup Innovation | 6 | 2 | 1 | 1 | Harj provides substantial context from YC interview cycles where founders spent more money on legal counsel than engineering. Jesse reinforces how upcoming legislative clarity lowers these high barriers to entry. | |
| The Global Impact of Programmable Dollar Stablecoins | 6 | 3 | 0 | 0 | Harj cites specific high-growth YC portfolio neobanks like Dollar App and Aspora to discuss product-market fit in stablecoins. Jesse details the early history of launching USDC and why programmable dollars unlock global access. | |
| Local Currency Stablecoins & Emerging Market Opportunities | 5 | 4 | 1 | 1 | Harj asks whether international founders should issue native stablecoins or aggregate existing winners. Jesse presents a counter-narrative favoring local currency stablecoins to prevent total dollarization of emerging economies. | |
| Y Combinator Batch Application Intermission | 6 | 3 | 1 | 2 | Following the YC batch application announcement, Harj raises the critique that crypto is merely reinventing traditional financial rails. Jesse explains converting complex legacy COBOL systems at Shopify into compact on-chain smart contracts. | |
| Disrupting Legacy Intermediaries with Open Networks | 5 | 2 | 0 | 0 | Harj asks which traditional incumbents are prime targets for disruption, noting historical internet payment protocol designs. Jesse explains how open networks invert proprietary two-sided marketplace take rates. | |
| Focusing on Real User Problems Over Crypto Jargon | 6 | 3 | 1 | 1 | Harj advises founders to focus on concrete user problems without relying on crypto buzzwords. Jesse agrees but qualifies that novel, purely crypto-native primitives can create massive emergent asset classes. | |
| Creator Capital Markets & Content Monetization on Base | 4 | 4 | 0 | 0 | Harj asks for specific examples of native on-chain mechanisms. Jesse explains Base's experiment turning individual creators and posts into tradeable, monetizable capital assets. | |
| Core Attributes of Winning Crypto Founders | 4 | 2 | 0 | 0 | Harj asks what qualities Coinbase prioritizes when investing in crypto founders. Jesse outlines technical builder backgrounds, genuine understanding of smart contracts, and high perseverance. | |
| The Synergistic Intersection of AI and Crypto | 6 | 2 | 0 | 0 | Harj and Jesse discuss the natural intersection of AI and crypto, noting that autonomous software agents require verifiable identities and native programmable payment rails. | |
| Standout YC Crypto Startups: Courtyard Case Study | 7 | 0 | 0 | 0 | Jesse flips the interview to ask Harj about standout YC crypto companies. Harj takes the floor, detailing Courtyard's model of authenticating physical collectibles on-chain. |
Statements from this episode (28)
YC and Coinbase Partner on Joint Request for Crypto Startups
“Y Combinator and Coinbase are together putting out a joint request for startups building in crypto.”
Pollak: Fintech 3.0 means rebuilding finance from scratch on crypto rails
“Now, I think about fintech three point O as the opportunity to rewrite it all to basically start from the ground up and say, how do we make the financial system work better for everyone by building it on top of the programmable software platform that includes …”
Pollak: Crypto is not yet having its ChatGPT moment
“Candidly, no. And I think the reason I say no is because if you ask a friend or family member, I don't think they'd say, oh yeah, I have had a magic moment with crypto. I think instead they might be fearful. They might not actually know what crypto is doing on…”
Pollak: Pre-breakthrough phase is the best time to build in crypto
“And so the thing that's powerful about that is that that's the best time for us to be building and the best time for YC entrepreneurs to be trying to break through And the moment is now to break through because we've done the infrastructure work, the tools are…”
Pollak: Base and Solana transaction fees dropped to fractions of a cent
“And the thing that has shifted over the last few years is that those costs have come massively down. And whether that's with base or Solana, we actually have this scaling that's happening where now you can build those applications and instead of it costing fiv…”
Pollak: Crypto is experiencing its broadband transition moment
“And we think about this as the broadband moment for crypto, where when we were in dial up of the internet, you couldn't have the applications that exist today. And then gradually we scaled the throughput, scaled the bandwidth, and that led to these new breakou…”
Pollak: Base Compresses Transactions to Ethereum to Slash Costs 1,000%
“So what base does is you can kind of think about it like an HOV lane. We sit on top of Ethereum. We take millions and millions of transactions. We compress them and we publish them to Ethereum. And that means that when we're compressing them, we can get a ton …”
Pollak: Building an AMM interface is an ideal crypto 'Hello World'
“Building an interface that lets you interact with a swap like an AMM or an exchange, right? So one of the really powerful things that crypto enables enables you to seamlessly swap between assets. You can swap between Ethereum and a stable coin or between multi…”
Pollak: AMM smart contracts replace massive traditional exchange infrastructure in hundreds of lines
“If you look at the New York Stock Exchange or any traditional exchange, this is huge amounts of infrastructure, huge amounts of overhead, and now that can be distilled into hundreds of lines of code, I think that that's kind of an aha moment for a lot of peopl…”
Pollak: Crypto builders often spent more on lawyers than engineers
“So many early stage builders and late stage builders ended up spending like equivalent or more money on lawyers than they were on engineers.”
Pollak: Four maturing unlocks have created crypto's golden building era
“Those, you know, four things
Chain scaling, regulatory clarity, stablecoins emerging as a really powerful tool, and then wallets getting simpler and simpler, I think have matured to the point where we've entered the golden age of crypto building, the golden ag…”
Taggar: DolarApp and Aspora are fast-growing stablecoin neobanks in YC's portfolio
“We have companies like Dollar App in Latin, Aspora in India. These are essentially neobank Services that are really built around stable coins and their growth rates are incredible.”
Pollak: USDC took several years to reach $1 billion in issuance
“The first two to three years of USDC, we had launched it, but it didn't grow that much. Like, it took us a while to get to a billion dollars of issuance.”
Pollak: Global stablecoin supply is near $200 billion
“There's almost two hundred billion dollars of stablecoins in the market”
Pollak: Stablecoins' main unlock is instant, global, free programmable dollars
“The first big unlock that stablecoins has done is basically said, okay, now everyone in the world can access dollars and not just can they access it, they can build with dollars and they can build with dollars on this new programmable platform where there's do…”
Pollak: Entrepreneurs are launching native fiat stablecoins across emerging markets
“Now alongside the dollar stable coins, you actually have entrepreneurs in all those countries who are creating stable coins for their currencies. So you have a Brazilian real currency. You have a Nigerian Naira currency. You have an Indonesia rupee currency. Y…”
Base issues request for startups building local-currency stablecoins
“And we actually just put out a request for builders for base where it's like, we want to talk to entrepreneurs in every single country in the world who are doing that work because it's so, so important and we want to support them and help them be successful.”
Pollak: Users will demand apps supporting both USD and local stablecoins
“Because I think that kind of flexibility, that's actually what consumers and businesses are going to want. They're going to want the ability to have my, you know, payments app and be able to save in dollars. Save my local stablecoin, swap between them, earn in…”
Pollak: Coinbase and Shopify condensed payment systems into 1,000-line smart contract
“And what we did over a nine month period was exactly that. We went into their systems, which are literally millions of lines of code where they're doing things like escrow they're taking taxes they're doing, you know, fees, tariffs they're doing refunds, charg…”
Pollak: Decentralization is essential at the base layer, not entire stack
“The place where decentralization is really, really important is at the very bottom of the stack, right? You need decentralization at the Ethereum layer, at base, because what that enables is it enables this global platform that everyone can come and participat…”
Pollak: Crypto turns proprietary intermediary network effects inside out
“I think the thing that's shifting with crypto is those network effects are being turned inside out. Where it's when we're onboarding people on chain and we're bringing them into these new systems, they're actually entering an open network where when you join t…”
Taggar: The best crypto startups solve problems without exposing crypto UX
“I think our advice to founders would definitely be look for those sorts of opportunities where you understand the technology Deeply enough. You've read the commerce payment protocol paper. You know how this all works, but you're looking for like actual problem…”
Pollak: Programmable, Global Asset Tokenization Will Create Massive Value
“I think we can all imagine that if you take all the assets that exist, and then you put them into a platform where they can be programmable, they can move instantly, they can move basically for free, they can be accessible to anyone globally in the world, that…”
Pollak: Developers Are Bringing Stocks, Bonds, and Debt Onto Base
“And that's what we're seeing every day on base right now. It's like people are bringing stock, they're bringing bonds, they're bringing more stable coins, like I talked about earlier, they're Actually, you know, bringing collateralized debt positions. Like, ev…”
Pollak: Content and creator capital markets will become a major asset class
“I think one of the biggest asset classes that we believe is about to emerge is content and creators and Creator capital markets where for the first time you're going to have creators that start to say, Hey, I want to use this new platform to raise capital for …”
Pollak: Every post and creator on Base app is a coin
“On the base app, it's a new social product where every single post that you make is a coin and every single creator is a coin.”
Pollak: Crypto rails will solve AI content authentication
“One is in a world where AI proliferates it's gonna be really hard to know like what's real. And crypto provides a level of hardness and verification that I think can connect to AI in a way that solves that problem. Like if you have millions and millions and mi…”
Pollak: Smart contracts will become native monetary substrate for AI agents
“And I think that's exactly what we're seeing happen with crypto right now is that crypto is plugging in as a platform. That enables agents to transact natively. So instead of going and trying to operate in a browser over the legacy rails, they just call the sm…”