- Vitalik Buterin endorses Base’s L2 model, praising its use of centralized sequencers for UX while relying on Ethereum for decentralized security.
- Coinbase’s legal chief argues L2s are neutral infrastructure like AWS, not venues for trading financial securities.
Amid discussions concerning the classification of layer-2 networks, Vitalik Buterin voiced approval for Base, characterizing its operational model as appropriate. Buterin explained that Base functions as an addition to Ethereum, employing centralized components to enhance user experience while depending on Ethereum’s decentralized foundation for security. He stressed that Base does not custody user funds, eliminating any possibility of theft or withdrawal restrictions.
Base 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.
Base does not have custody over your funds, they cannot steal funds or… https://t.co/0EMdThg4gU
— vitalik.eth (@VitalikButerin) September 22, 2025
These comments from Buterin arose during a time of skepticism about what constitutes a layer-2. Attention has centered on sequencers, which handle transaction ordering, and whether their centralized control aligns with regulatory definitions of exchanges.
Securities and Exchange Commissioner Hester Peirce recently pondered if such networks act similarly to exchanges. Peirce indicated that if one entity manages critical parts, it could resemble an exchange. Still, she added that assets not classified as securities might fall outside strict oversight.
Coinbase chief legal officer Paul Grewal countered the exchange analogy. Grewal asserted that layer-2 networks serve as general infrastructure, comparable to cloud services like Amazon Web Services. He noted these systems process and group transactions, executing smart contracts without facilitating security trades.
1/ as a follow-up to @iampaulgrewal's comments, I want to provide more detail on how the @base sequencer actually works — and fully shut down the FUD that folks are actively spreading around the role sequencers play https://t.co/IEutNTbuov
— jesse.base.eth (@jessepollak) September 22, 2025
Jesse Pollak, a co-founder of Base, specified that sequencers arrange transaction sequence but do not pair orders like matching engines in exchanges. Users retain the option to submit transactions through Base or directly on Ethereum, preserving decentralization. Pollak likened the sequencer to a coordinator optimizing flow in a dedicated lane.
Ethereum (ETH) is trading at $4,183, down 0.47% in the last 24 hours. On a weekly scale, ETH has fallen 7.51%, and in the past month it is down 12.39%. Despite this correction, the asset has gained 108% in six months and 62% over the past year, supported by a market capitalization of $505 billion and a daily trading volume of $33.7 billion.
Ethereum continues to see strong inflows into exchange-traded products, with $772 million added last week, bringing year-to-date inflows to a record $12.6 billion. ETHNews analysts suggest this trend reflects rising institutional interest, particularly after the Federal Reserve’s rate cut.
Some forecasts now place Ethereum’s long-term price potential between $18,000 and $20,000 by 2026, though short-term risks include the possibility of a dip below $4,000, which traders view as a liquidity-driven reset.
Another major development is the upcoming Fusaka hard fork scheduled for November 2025, expected to introduce new features that could impact Ethereum’s functionality and adoption. This upgrade has generated attention among developers and investors who see it as a potential driver for the next growth cycle.
Technically, ETH remains below its recent high of $4,955, with resistance near $4,500–$4,750 and strong support at $4,000–$4,050. Neutral-to-bearish indicators suggest consolidation, with the market awaiting fresh momentum from macroeconomic data and ecosystem upgrades.
