Ethereum co-founder Vitalik Buterin defended the Base network and similar Layer 2 (L2) solutions, emphasizing their infrastructural significance for the Ethereum ecosystem. According to him, such platforms are not exchanges, as they do not have access to users’ funds and cannot restrict their withdrawals.
This is reported by Finway
Features of L2 Operations and Buterin’s Position
Buterin highlighted that Base and other L2 solutions remain closely tied to the main decentralized layer of Ethereum. The centralized functions of these platforms are implemented to enhance user convenience; however, the system does not allow them to control or block the funds of users.
“Base does not control your funds, cannot steal them, or prevent you from withdrawing them,” Buterin stated.
In his view, maintaining decentralization is the main priority for such solutions, and they do not serve the functions of exchanges or trading platforms.
Discussion on Regulating L2 Solutions
The issue of regulating L2 solutions as exchanges was recently raised by SEC representative Hester Peirce. She noted that while L2 sequencers often use a centralized approach to transaction ordering to increase speed and combat bots, the key question is whether they control users’ assets and whether those assets are classified as securities.
Peirce emphasized that if the matching system is controlled by a single organization, and the assets are recognized as securities, then such projects may be classified as trading platforms. If the tokens used are not securities, no additional requirements arise.
Coinbase’s Chief Legal Officer Paul Grewal added that L2 sequencers, including Base, operate as infrastructure services, similar to AWS. They merely process transactions, execute smart contracts, and bundle messages, but do not perform the functions of order matching exchanges.
Base co-founder Jesse Pollak explained that users can interact both through the Base sequencer and directly with Ethereum. This allows for the preservation of decentralization and protection against censorship. He compared the role of the sequencer to that of a “traffic light,” which organizes movement but does not determine its content.
The expert community agrees: L2 solutions are infrastructure, not trading platforms. Excessive regulation could force developers to register their projects with the SEC and comply with stringent requirements, which, according to industry representatives, does not align with their actual role and could hinder the development of the Ethereum ecosystem.