Vitalik Buterin, co-founder of Ethereum, expressed support for the Base network and other Layer 2 (L2) solutions following numerous discussions regarding centralized sequencers. He emphasized that such projects are infrastructure expansions of the Ethereum ecosystem, rather than cryptocurrency exchanges, and do not control or freeze users’ funds.
This is reported by Business • Media
Buterin’s Position on the Decentralization of L2 Solutions
Buterin stressed that the Base network uses centralized features solely to enhance user convenience while remaining an integral part of Ethereum’s decentralized infrastructure. According to him, L2 sequencers do not have the ability to manage users’ assets, ensuring the security and decentralization of the base layer.
“Base does not control your funds, cannot steal them, or prevent you from withdrawing them,” Buterin stated.
Discussion on L2 Regulation and Expert Opinions
Recently, SEC representative Hester Peirce raised questions regarding the status of Layer 2 networks. She noted that many L2 sequencers use centralized mechanisms for transaction ordering to enhance speed and protect against bots, which raises debates about the potential classification of such projects as exchanges.
Peirce emphasized that if all assets in the system are securities and management is held by a single organization, the corresponding network may fall under regulation as a trading platform. Conversely, if tokens do not meet the definition of securities, special requirements do not apply.
Coinbase’s Chief Legal Officer Paul Grewal highlighted that Layer 2 sequencers, including Base, do not make these networks exchanges. They serve solely an infrastructural role, similar to AWS cloud services: processing transactions, invoking smart contracts, and packaging messages, but do not match orders as traditional exchanges do.
Jesse Pollak, co-founder of Base, explained that users can utilize the Base sequencer or conduct transactions directly through Ethereum without losing decentralization. In his view, the sequencer acts more like a “traffic regulator,” organizing the process but not controlling its content.
Most experts agree: Layer 2 networks are infrastructure solutions, and regulating them as exchanges could create significant barriers to the development of the Ethereum ecosystem. Recognizing L2 projects as exchanges would lead to the need for SEC registration, compliance with strict requirements, and substantial restrictions on developers’ activities.
Market players emphasize that such classification does not reflect the actual functions of sequencers and could unjustifiably hinder innovation in blockchain infrastructure.