{ "id": 48880, "date": "2025-09-23T12:37:28", "date_gmt": "2025-09-23T05:37:28", "guid": { "rendered": "https:\/\/hbbgroup.net\/vitalik-buterin-praises-base-as-the-right-way-amid-l2-sequencer-fud\/" }, "modified": "2025-09-23T12:37:28", "modified_gmt": "2025-09-23T05:37:28", "slug": "vitalik-buterin-praises-base-as-the-right-way-amid-l2-sequencer-fud", "status": "publish", "type": "post", "link": "https:\/\/hbbgroup.net\/en_us\/vitalik-buterin-praises-base-as-the-right-way-amid-l2-sequencer-fud\/", "title": { "rendered": "Vitalik Buterin praises Base as the \u2018right way\u2019 amid L2 sequencer \u2018FUD\u2019" }, "content": { "rendered": "
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Ethereum co-founder Vitalik Buterin has praised Ethereum layer-2 Base\u2019s approach to decentralization in response to recent concerns over Base\u2019s sequencer and whether it should be treated as an exchange. <\/p>\n

\u201cBase is doing things the right way: an L2 on top of Ethereum, that uses its centralized features to provide stronger UX features, while still being tied into Ethereum’s decentralized base layer for security,\u201d Vitalik Buterin said<\/a> on Tuesday.\u00a0<\/p>\n

He added that the Coinbase layer-2 does not have custody over your funds, \u201cthey cannot steal funds or stop you from withdrawing funds.\u201d<\/p>\n

True layer-2s are non-custodial, he continued. \u201cThey are extensions of Ethereum, not glorified servers that happen to submit hashes.\u201d<\/p>\n

Buterin\u2019s comments came amid recent cynicism over the definition of layer-2 networks and concerns of centralization. L2s have been thrust into the spotlight following comments by SEC Commissioner Hester Peirce in a podcast<\/a> on Sept. 7.\u00a0<\/p>\n

Are L2s the same as exchanges?\u00a0<\/h2>\n

Many layer-2s use centralized transaction sequencing<\/a> to provide better rates and prevent front running<\/a> by bots. Peirce alluded to potential regulatory implications if these \u201cmatching engines\u201d behave like centralized exchanges.\u00a0<\/p>\n

\u201cIf you have a matching engine that\u2019s essentially controlled by one entity that controls all the pieces of that, then that looks a lot more like an exchange, and we\u2019re going to have to think about that.\u201d<\/p><\/blockquote>\n

However, she also said that if the assets that are being \u201cmatched\u201d are not securities, \u201cthen we don\u2019t have a lot to say about it.\u201d\u00a0<\/p>\n

Layer-2s are infrastructure providers like AWS\u00a0<\/h2>\n

Coinbase chief legal officer Paul Grewal argued<\/a> that calling layer-2 sequencers like Base \u201cexchanges\u201d fundamentally misunderstands their role and function.<\/p>\n

The SEC defines an \u201cexchange\u201d as providing a marketplace for bringing together buyers and sellers of securities, he said, adding that layer-2s are \u201cgeneral-purpose blockchains that operate as infrastructure.\u201d<\/p>\n

They process messages as code, calling smart contracts, and batch all transactions, whether they are payments, calls or messages.\u00a0<\/p>\n

Related: <\/strong><\/em>Vitalik Buterin proposes minimalism as key to layer-2 blockchain success<\/strong><\/em><\/a><\/p>\n

He compared layer-2s such as Base to Amazon Web Services<\/a>: Both run code provided by developers, including exchange applications, but that doesn\u2019t make the infrastructure provider itself an exchange.\u00a0<\/p>\n

\u201cIf an exchange runs on AWS, is AWS an exchange? Obviously not.\u201d<\/p><\/blockquote>\n

Basic functions of L2 sequencer. Source: CoinEx<\/em><\/figcaption><\/figure>\n

Sequencers are not matching engines\u00a0\u00a0<\/h2>\n

Base co-founder Jesse Pollak followed up<\/a> with more details on how sequencers function.<\/p>\n

Users can transact through Base\u2019s sequencer<\/a> or directly through Ethereum, maintaining full decentralization and censorship resistance, he said.\u00a0<\/p>\n

\u201cIt\u2019s like a traffic controller ensuring smooth flow through a high-priority traffic lane that enables vehicles to get where they\u2019re going faster.\u201d<\/p><\/blockquote>\n

He also cleared up the matching engine misconception, stating that sequencers do not act as \u201cmatching services\u201d or engines like those in traditional exchanges.\u00a0<\/p>\n

\u201cMatching engines pair buy and sell orders at specific prices to execute trades. Sequencers don\u2019t do that \u2014 they simply determine the order in which transactions are processed.\u201d<\/p><\/blockquote>\n

If layer-2s were classified as exchanges, they would need to register with the SEC as securities exchanges, comply with extensive regulatory requirements, and potentially face restrictions on operations, hence the industry pushback.\u00a0<\/p>\n

Magazine: <\/strong><\/em>What are native rollups? Full guide to Ethereum\u2019s latest innovation<\/strong><\/em><\/a><\/p>\n