Buterin explains why Base is a secure and censorship-resistant L2

Vitalik Buterin spoke out in defense of Base, marking the importance of decentralized consensus for L2. The key safety issue is the ability of users to still move funds, even if the L2 stopped working. 

Vitalik Buterin spoke out on the key feature of L2 decentralization. While for some the issue is frivolous, Buterin explained L2s are not “glorified servers” sending transactions to Ethereum. Instead, the chains allow users to move their funds in a permissionless way, even if the L2 stops working. 

The feature is seen as key to awarding L2s decentralized status, and avoids potential losses in the case a chain decides to close. Buterin explained that L2s are non-custodial, and in the end cannot censor transactions, as it happened briefly on the Soneium chain. 

This level of security, however, still does not exclude financial risk, and cannot guarantee the safety of DEXs. The only achievement is that the DEX is not a custodian of funds. 

As Cryptopolitan reported earlier, Buterin is focusing again on L2 and their interaction with Ethereum. In December, Ethereum will also increase its capacity for L2 transactions, further boosting speed and lowering costs.

Are L2s capable of grabbing user funds?

Armani Ferrante, founder of the Backpack wallet and DEX, mentioned that in some cases, margin trading may require a form of custody and funds that are briefly locked by a third party, to achieve trading. Ferrante, who was an early hire of Alameda Research, aims to dispel fears of custodial overstepping and harming the rights of depositors. 

Sunil Kavuri, FTX creditor activist, warned that not all trading was the same, as in the case of Alameda Research, which directly grabbed and used deposits to FTX. 

So far, there is no data of a L2 chain being able to control user funds to a high extent, repeating the model of Alameda Research. Ethereum’s infrastructure still allows censorship-free, direct movements of L2 tokens. 

Jesse Pollak, founder of Base, explained the chain’s sequencer. He stated the Base sequencer works as a fast lane, but users were free to order Base transactions directly on Ethereum, with no censorship. This pathway to transacting may take longer to settle in some cases, suggesting sequencers can still affect some transactions, as users will have to accept delays.

L2 chains keep expanding activity

L2 chains keep expanding their activity, with 35% in value growth for the past year. As of September, the chains secure $54.9B in value, moving close to the previous all-time peak in late 2024. 

Base is also achieving new milestones, securing over $14.92B in value. The chain carries over $4B in stablecoins, through its native USDC. However, Arbitrum is once again the venue for bridged stablecoins, expanding from 4.9B to 9.33B in dollar-pegged tokens, including USDT, USDC, and other assets.

Overall, the stablecoin supply on top L2 chains is near an all-time high, based on demand for lending and trading.

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