Vitalik Buterin, co-founder of Ethereum, has directly engaged in a growing debate surrounding Coinbase’s Layer-2 (L2) network, Base. He argues that critics have been conflating core concepts and failing to recognize the safeguards present in modern L2s that ultimately protect consumers. “Base is doing things the right way,” Buterin stated, describing it as a Layer-2 solution built on Ethereum that utilizes centralized features for improved user experience while remaining anchored to Ethereum’s decentralized base layer for security. He emphasizes that L2s like Base are non-custodial and should not be viewed merely as “glorified servers.”
This discussion gained traction following comments from Coinbase’s chief legal officer, Paul Grewal, who refuted comparisons of L2 sequencers to traditional exchanges. Jesse Pollak, the creator of Base, further clarified the role of sequencers, explaining that they handle user transactions by ordering them and batching them for faster and cheaper final settlement on Ethereum’s Layer-1 (L1). Pollak underscored that sequencers do not operate as traditional matching services, thereby alleviating concerns about centralized control in transaction processes.
The central point of contention revolves around issues of custody and control. Critics argue that if an L2 can reorder, censor, or halt transactions, it behaves similarly to a centralized intermediary. However, Buterin countered this perspective by explaining that Ethereum’s base layer ensures that user funds are ultimately governed there, providing mechanisms that prevent the L2 operator from stealing or blocking transactions. He cited L2BEAT’s definitions and important features like “force-exit” and anti-censorship pathways to illustrate his points.
Buterin also addressed the misconceptions surrounding L2BEAT, dispelling the idea that it serves as a subjective authority instead of an objective scoring system designed to measure the security and guarantees offered by L2s. He provided examples to demonstrate the tangible benefits and security a user can expect when utilizing an L2.
One critical point of contention is the “stage-1” designation, which has been cited as a critique of Base’s current level of decentralization. Buterin acknowledged that this status allows a security council to override on-chain code but clarified that it also necessitates that a significant portion of the council comes from outside the organization managing the L1. Therefore, he concluded, this structure prohibits the organization from unilaterally censoring transactions or commandeering user funds.
In addressing the future of Base, Pollak outlined the project’s roadmap toward achieving “stage-2” decentralization, indicating ongoing efforts to prioritize permissionless block proposals and further decentralize block building. Pollak was unequivocal in his statement: “No, @base isn’t an unlicensed securities exchange,” shifting the focus from whether Base fits into the description of an exchange to how quickly it can minimize governance while still enhancing user experience.
Two technical assurances crucial to user protection are inclusion and exit. Inclusion allows users, even if their transactions are initially rejected by a sequencer, to submit directly through Ethereum’s L1, retaining censorship resistance. The exit mechanism guarantees that if an L2 misbehaves or halts operations, users can still withdraw their funds through L1 smart contracts, independent of the operator’s involvement. Buterin emphasized that these assurances are grounded in “concrete properties,” with L2BEAT serving to validate their practical application.
The broader implications of these discussions will greatly influence how regulators and industry players define key terms like “sequencer,” “custody,” and “decentralization stage,” shaping the future of Ethereum scaling. Buterin’s insights aim to redefine these concepts based on what existing code guarantees, asserting that L2s are non-custodial extensions of Ethereum with established pathways that ensure user funds are ultimately secured by L1.
As the discourse unfolds, it remains to be seen whether Buterin’s clarifications will temper the ongoing debate or enhance Base’s efficiency in achieving its decentralization goals. At present, Ethereum (ETH) continues to trade above $4,193, reflecting ongoing market interest in developments within the broader Ethereum ecosystem.
