Vitalik Buterin, co-founder of Ethereum, has come to the defense of Coinbase’s Base blockchain amid growing criticisms regarding its operational security and user control. In a recent statement, Buterin emphasized that Layer 2 (L2) solutions like Base offer valuable security guarantees that are grounded in Ethereum’s core infrastructure, as opposed to being mere “glorified servers.” This response addresses some misconceptions circulating about L2Beat, a platform designed to assess the security of Layer 2 solutions, and the custody models associated with them.
Buterin made it clear that Base operates under a non-custodial framework, ensuring that users maintain control over their funds via smart contract logic on Ethereum’s main chain. His comments are timely, coinciding with ongoing discussions about Ethereum’s economic sustainability and upcoming infrastructure advancements such as the December 3 Fusaka upgrade.
He stated, “Base is doing things the right way: an L2 on top of Ethereum, that uses its centralized features to enhance user experience while remaining tethered to Ethereum’s decentralized base layer for security.” This stance comes as Layer 2 networks face increased scrutiny for their centralized functionalities, which can sometimes enhance user experience at the risk of compromising decentralization.
Recent events, including an incident involving Sony’s Soneium network and the shutdown of dYdX v3, have underscored the inherent risks and protective measures within contemporary L2 architectures. For instance, the dYdX platform’s shutdown ended, yet users successfully regained access to over $70 million in trapped funds thanks to StarkEx’s “Escape Hatch” system. This mechanism allowed for a secure withdrawal process without necessitating permission from the dYdX operators, reinforcing the claims made by Buterin regarding the non-custodial nature of Layer 2 solutions.
Moreover, the Soneium network experienced a backlash when it attempted to censor “unapproved” tokens, only for a developer to circumvent the censorship altogether, demonstrating the resilience of OP Stack architecture. This incident showcased that even in scenarios of operator intent to censor transactions, the core security properties inherited from Ethereum could effectively counteract such efforts.
Despite these advancements, Ethereum’s on-chain revenue has seen a troubling decline, dropping by 44% to $14.1 million in August, despite the price of ETH reaching record highs. This downturn raises questions about the network’s long-term economic model, particularly as Layer 2 adoption diminishes the revenue generated by Ethereum’s base layer.
Buterin highlighted the importance of a mathematical framework for Layer 2 security, indicating that a gradual transition from centralized control to complete decentralization is essential. His model advocates for a security council that mandates a quorum from diverse stakeholders, preventing unilateral censorship and safeguarding users’ funds, which is vital for fostering user confidence during the complex development phases of L2 solutions.
The upcoming Fusaka upgrade aims to enhance Layer 2 functionalities and mainnet sustainability through various improvements, including increased blob capacity and the implementation of PeerDAS. These developments intend to lower costs for rollups while upholding the security standards that separate Ethereum from its competitors.
Buterin also proposed that low-risk DeFi protocols could become a cornerstone for Ethereum’s economic future, likening the model to how Google Search underpins the broader operations of its parent company. By providing stable yields around 5% on well-established stablecoins, these protocols could create new revenue streams without sacrificing Ethereum’s foundational principles.
These initiatives reflect Ethereum’s ongoing efforts to navigate the complexities of scaling while ensuring profitability, demonstrating a keen awareness of the delicate balance between innovation and the network’s core ethical values.
