As Ethereum developers strive to enhance on-chain scaling solutions such as Sharding, layer-2 solutions are gaining momentum. According to L2Beat, by September 6, these layer-2 scaling solutions had accumulated nearly $34 billion.
Although they are popular, many layer-2s are emerging as centralized and face security risks. Recently, the OP Mainnet reverted to a centralized fault-proof system after discovering issues in the decentralized version.
Issues in Ethereum and Its Layer-2s
In response to these vulnerabilities, Justin Boons, the founder and CIO of Cyber Capital, a venture capital firm, is critiquing Ethereum and its layer-2 platforms more assertively. In a post on X, he claims that layer-2 solutions like Arbitrum and Base are fundamentally flawed and offer centralized services.
Boons addressed his concerns on X, shedding light on the shortcomings of Ethereum developers. He accuses them of failing to scale appropriately post-launch, with layer-2 solutions becoming excessively “parasitic.” Despite their benefits, he argues these off-chain solutions foster an unhealthy reliance.
Interestingly, he pointed out that Ethereum is becoming increasingly reliant on these solutions, even though they diverge from the core principles of the blockchain: decentralization.
Boons believes that Ethereum layer-2s are leveraging the mainnet’s popularity not to enhance adoption but primarily to generate profit.
Their choice to compromise on decentralization (and consequently security) will ultimately weaken the entire ecosystem. In his perspective, platforms like Base, Arbitrum, and the OP Mainnet should not be treated as “extensions” of the base layer due to their intrinsic weaknesses.
Dash’s Early Decentralization Advantage
While criticizing Ethereum and its leading scaling solutions, Boons expressed support for Dash, one of the earlier blockchain networks. In contrast to off-chain solutions, Dash, according to the venture capitalist, emphasized scaling right from the start.
Specifically, he noted the blockchain’s choice to implement a decentralized governance structure. Boons asserted that this decision would “benefit” Dash in the foreseeable future.
Nevertheless, despite the obstacles associated with layer-2s, Ethereum developers are diligently working to enhance the mainnet. Ethereum 2.0 aims to achieve on-chain scaling without compromising on security and decentralization through a series of upgrades, from the Verge to the Splurge.
Meanwhile, the approval of spot Ethereum ETFs serves as a significant endorsement for the network. Although the United States Securities and Exchange Commission (SEC) has yet to officially classify ETH as a commodity like Bitcoin, the Commodity Futures Trading Commission (CFTC) regards it as a commodity.
Despite being one of the pioneering platforms, Dash has slipped into obscurity in recent years. It currently ranks outside the top 100 most valuable networks and faces liquidity challenges, having been delisted from several centralized exchanges such as HTX.
Feature image from Canva, chart from TradingView
