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The surge of popularity of centralized second-layer scaling solutions threatens original Ethereum (ETH) values as they are too centralized, explains Justin Bons, founder and CIO of the oldest European crypto fund, Cyber Capital.
Ethereum (ETH) captured by centralized L2s, Cyber Capital CIO says
L2s should not be treated as "extensions" of Ethereum (ETH), as they do not inherit its qualities, and they are able to both steal and censor users' funds. This statement was shared by renowned cryptocurrency expert Justin Bons in his recent X thread.
Furthermore, none of Ethereum's L2 has an incentive to get decentralized over time, as this step will sacrifice the revenue from running sequencer nodes.
In this regard, Ethereum (ETH) has already crossed the Rubicon with its major L2s making billions for broadcasting transactions, and of course, they are unable to lose this revenue stream.
As such, the entire L2 ecosystem is a conglomerate of for-profit companies that ruined the opportunities for Ethereum to scale its L1 in a more decentralized and inclusive way.
L2 lobby becomes too powerful to overcome, case of Base demonstrates
Bons indicates the growing importance of the L2 lobby. The success of Base, a Coinbase-linked Ethereum L2, is the best demonstration of what can be achieved by this manner of scaling.
As per L2Beat, Base is responsible for 17,52% of all Ethereum L2s' TVL. It managed to replace OP Mainnet as the second largest solution here.
Finally, Ethereum (ETH) might be losing its dominance in the smart contracts segment as developers move to more democratic L1s.