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Justin Bons, founder and CIO of Cybercapital, a Europe-based cryptocurrency fund, has warned about the effect that the rise of Ethereum L2s is having on the main chain. Bons stated that the activity that Ethereum should be experiencing is happening on L2s, and that is bringing fragmentation and more inflation to the ETH ecosystem.
Cybercapital Founder Justin Bons Warns About L2’s ‘Vampire Attack’ on Ethereum
Justin Bons, founder and CIO of Cybercapital, has warned about the pernicious effects that the growth of second-layer projects is having on the health of the Ethereum ecosystem. Bons explained there are several things he considers wrong about the decision to scale Ethereum with L2s instead of focusing on the main chain.
This focus has created several problems that have originated an underutilization of the main chain, pushing ETH inflation up given that the fees burned cannot contain inflation because the activity is going to these projects.
Among these problems is the fragmentation of the liquidity of the L2 ecosystem in several isolated islands that cannot be connected yet. Also, Bons criticizes the value accumulation in these chains that are not as decentralized or safe as the base Ethereum chain, and that can serve to steal user funds and censor transactions.
Bons explained that now that these projects have grown and cultivated value on their own it is virtually impossible to fix scaling at the base chain because it would disarm all the value accrued by these projects. This, in consequence, would affect users holding these tokens too.
Bons stated:
Scaling ETH would destroy all capital & fees earned by L2s, as VCs cannot skim from L1 scaling. These parasites have twisted a public good & turned it into a platform for VC chains to rent-seek!
Today’s state of Ethereum answers to a decision to shift scaling efforts to L2s, a decision that Bons bashes due to its centralization. “That is what happens when we put ourselves at the mercy of a centralized decision-making process,” he concluded.