Ethereum Founder Vitalik Defends Coinbase’s New Blockchain Amid Controversy – What’s Going On?
Ethereum co-founder Vitalik Buterin defended Coinbase’s Base blockchain towards criticism, emphasizing that Layer 2 options present real safety ensures via Ethereum’s base layer relatively than working as “glorified servers.”
His feedback addressed rising confusion about L2Beat’s function as a safety evaluation platform and misconceptions about Layer 2 custody fashions.
Buterin clarified that Base maintains non-custodial properties the place customers retain final management over their funds via sensible contract logic on Ethereum’s fundamental chain.
The protection got here amid broader discussions about Ethereum’s financial sustainability and infrastructure growth forward of the December 3 Fusaka improve.
The intervention occurred as Layer 2 networks face scrutiny over centralized options whereas offering enhanced consumer experiences.
Recent incidents, together with Sony’s Soneium censorship makes an attempt and the dYdX v3 shutdown, have highlighted each the dangers and protecting mechanisms constructed into fashionable L2 architectures.
Meanwhile, Ethereum’s on-chain income fell 44% to $14.1 million in August regardless of ETH reaching new highs, which has raised questions in regards to the community’s long-term financial mannequin as Layer 2 adoption reduces base layer payment era.
Real-World Proof: When Layer 2 Security Actually Works
The dYdX v3 shutdown supplied concrete proof of Layer 2 escape mechanisms functioning as designed.
When the decentralized alternate ceased operations, customers accessed over $70 million in trapped funds via StarkEx’s built-in “Escape Hatch” system, with $30 million efficiently withdrawn utilizing L2Beat’s open-source interface.
The escape course of required customers to submit three Ethereum transactions, every accompanied by a Merkle proof verifying their asset state.
While technically advanced, the mechanism operated with out requiring permission from dYdX operators, validating Buterin’s claims about Layer 2 non-custodial properties.
Similarly, Sony’s Soneium community confirmed censorship resistance when the corporate tried to dam “unapproved” tokens on the RPC stage.
Sony’s L2 simply confirmed us one thing wild about OP Stack censorship resistance:
Their try to dam “unapproved” tokens spectacularly backfired in lower than 24 hours after launch.
Here’s precisely what went down
pic.twitter.com/Pl3ipcAtvD
— f(gautham)
(@gauthamzzz) January 14, 2025
A developer bypassed the sequencer totally by forcing transactions via Ethereum’s fundamental chain, proving that OP Stack structure prevents everlasting censorship, no matter operator intentions.
The incident destroyed early token positions price 1000’s of {dollars} earlier than the workaround emerged.
However, the profitable bypass validated OP Stack’s design philosophy that forces all Layer 2 networks to inherit Ethereum’s core safety properties, together with transaction finality ensures.
These real-world examples help Buterin’s argument that Layer 2 options characterize real extensions of Ethereum relatively than impartial programs with custody dangers.
The concrete pathways carried out in sensible contract logic have confirmed practical underneath stress situations, together with operator shutdowns and makes an attempt at censorship.
Ethereum Seeks Sustainable Revenue Beyond Speculation
Notably, Buterin additionally highlighted L2 safety, and his mathematical framework for Layer 2 safety levels reveals why gradual development from centralized management to full decentralization is sensible.
His evaluation reveals that Stage 1 rollups with 75% safety council override necessities present optimum safety when proof programs stay unproven.
However, Stage 2 programs ought to solely be activated as soon as enough mathematical confidence within the underlying cryptographic programs is achieved.
The safety council mannequin requires quorum-blocking minorities outdoors major organizations to forestall unilateral censorship or fund theft.
This distributed governance method strikes a stability between innovation pace and consumer safety throughout the maturation strategy of advanced cryptographic programs.
The Fusaka upgrade scheduled for December 3 helps this evolution via infrastructure enhancements that improve each Layer 2 capabilities and mainnet sustainability.
Blob capability expansions and PeerDAS implementation will cut back prices for rollups whereas sustaining safety ensures that distinguish Ethereum from rivals providing much less rigorous decentralization paths.
Growing growth efforts deal with enhancing Ethereum’s basis for low-risk functions that Buterin envisions because the community’s financial future.
These initiatives purpose to create sustainable income streams that help innovation with out counting on speculative buying and selling or compromising the ideas that make Ethereum a useful decentralized platform.
Furthermore, Buterin recently proposed low-risk DeFi protocols as Ethereum’s potential income anchor, evaluating the mannequin to Google Search’s function in funding broader firm operations.
He argued that protocols providing steady yields round 5% on blue-chip stablecoins might present financial sustainability with out compromising the community’s moral foundations.
The proposal addresses Ethereum’s financial challenges as Layer 2 adoption reduces base layer revenues.
August’s 44% income decline to $14.1 million occurred regardless of ETH hitting new highs, which has now put extra strain on the stress between scaling success and mainnet profitability.
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