Vitalik Buterin takes shot at Coinbase’s company management of Base which dominates 60% of layer 2 earnings

Ethereum co-founder Vitalik Buterin has signaled a basic shift within the blockchain’s roadmap that declares the period of the “branded shard” successfully over.

On Feb. 3, Buterin argued that the trade’s earlier “rollup-centric” imaginative and prescient now not is sensible, citing quicker scaling on the primary Ethereum layer and the sluggish tempo of decentralization amongst main rollups.

This philosophical correction lands squarely on the Coinbase-backed Base community.

Over the previous years, the Ethereum layer-2 answer has grown into one of many largest consumer-facing rollups within the crypto ecosystem, with greater than $11 billion in whole worth secured (TVS).

Nevertheless, Buterin's new roadmap place calls into query the validity of Layer-2s that depend on company affiliation fairly than distinctive technical utility.

In consequence, this locations vital strain on Base. It raises the query of whether or not Ethereum’s evolving definition of “aligned scaling” erodes the Coinbase-backed layer-2 answer's long-term financial edge, notably the profitable income mannequin tied to centralized sequencing.

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Oct 22, 2025 · Gino Matos

An enormous income engine

Certainly, Base has been a monetary revelation since its launch in August 2023.

CryptoSlate beforehand reported that the community generated greater than $75 million in income in 2025. This determine accounted for practically 60% of the income of the whole Layer-2 sector that yr.

Market observers have famous that the disparity between its earnings and working prices is the defining function of its present enterprise mannequin.

Notably, information from L2BEAT signifies that Base paid roughly $1.52 million to Ethereum over the past yr to submit transaction information and canopy settlement overhead. This averages roughly $4.180 per day, or about $0.000406 per person operation.

In trade for this comparatively low lease paid to the primary community, Base captures vital worth. Latest 24-hour metrics point out that the community processed roughly 12 million transactions and hosted roughly 409,453 energetic addresses.

For Coinbase, this isn’t simply an experiment. It’s a high-margin diversifier that monetizes on-chain exercise even when spot buying and selling volumes are cyclical.

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Dec 31, 2025 · Oluwapelumi Adejumo

The dilemma of company management

Buterin’s critique targets the hole between the rollup supreme and the fact of Base's present operations.

He argued that many Layer-2s nonetheless operate as separate chains with bridges fairly than true extensions of Ethereum. That is largely as a result of they depend on multisig (multi-signature) wallets, safety councils, and centralized operators for upgrades.

In mild of this, Buterin’s “new path” includes three sensible filters for the chains: urging them to do greater than scale, sustaining no less than Stage 1 maturity when dealing with Ethereum property, and prioritizing interoperability.

Notably, Base clears the primary hurdle of maturity however faces a fancy ceiling.

L2BEAT at the moment classifies Base as a Stage 1 rollup. This designation acknowledges that customers have a mechanism to exit the system even when the centralized operators stop to exist.

Nevertheless, it additionally highlights dangers. Upgrades have to be authorised by a number of entities, and there’s no necessary delay on upgrades.

This implies customers lack a built-in “exit window” in the event that they disagree with a code change. L2BEAT additionally flags the centralized sequencer’s means to extract MEV (Maximal Extractable Worth) if it chooses to take advantage of its place.

This creates a particular dilemma for Coinbase, which is a publicly traded US firm.

But Buterin has criticized tasks that stall at Stage 1 as a result of “their clients’ regulatory wants require them to have final management.”

Coinbase can’t readily switch improve keys to an nameless decentralized autonomous group (DAO) with out probably violating anti-money laundering and know-your-customer (KYC) compliance obligations.

If Base retains a safety council veto for regulatory security, it dangers falling into the class of tasks Buterin describes as “not scaling Ethereum” within the trustless sense.

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Jan 25, 2026 · Gino Matos

Cheaper information threatens Base's earnings

The second pressure squeezing Base is technical. Ethereum is aggressively reducing the price of its personal blockspace.

In January, Ethereum activated the second Blob Parameters Solely exhausting fork, the ultimate stage of the Fusaka improve.

This replace will increase information capability by elevating the utmost blob restrict to 21 and the goal to 14 per block, thereby considerably lowering transaction prices for Layer-2 rollups similar to Arbitrum and Optimism.

The abundance of this information availability is a double-edged sword for Base.

On one hand, cheaper blobs imply decrease marginal prices per transaction, which is a tailwind for the patron apps and high-frequency exercise that thrive on the community.

However, it forces a change within the worth proposition. If Ethereum’s major layer turns into low cost sufficient, the easy pitch of “cheaper EVM execution” loses its efficiency.

The core debate facilities on lease extraction. Critics argue that rollups generate giant price streams whereas paying comparatively little to Ethereum for safety.

For context, Base posted roughly 531.54 GiB of knowledge to Ethereum over the past yr. As the primary community scales, the political economic system of sequencers, the entities that order transactions, comes into focus.

If the ecosystem strikes towards shared sequencing or different enshrined mechanisms to scale back centralized management, the worth of proudly owning these ordering rights may fall. Base may win on whole utilization quantity however lose on the “take-rate” it prices per transaction.

Can Base win?

Coinbase seems acutely conscious that the period of generic scaling is ending.

Jesse Pollak, the lead developer for Base, publicly acknowledged that it’s nice to see Ethereum scaling its Layer-1 and agreed that layer-2s can’t simply be “Ethereum however cheaper.”

Contemplating this, he acknowledged that the community is pivoting towards differentiation to outlive the brand new roadmap by “constructing the perfect merchandise and unlocking new actual use circumstances throughout buying and selling, social, gaming, creators, and predictions.”

Notably, Base has already achieved vital success on this area of interest, changing into a most well-liked venue for viral client purposes like Buddy.tech and Clanker.

In the meantime, market analysts have argued that distribution is Base’s strongest moat.

The community pushes customers into Coinbase surfaces, similar to wallets and swaps, and helps the corporate’s B2B tooling stack. This creates a funnel by which income flows by way of a number of channels, not simply sequencer charges.

Buterin’s submit implicitly reduces the long-run worth of “branding as Ethereum scaling,” nevertheless it doesn’t cut back the worth of transport a client on-ramp.

Total, Base is positioned to stay a winner on development and monetization within the close to time period.

Nevertheless, the long-term risk stays actual.

If the market more and more costs rollups by their stage of decentralization and credible exit ensures, Base could have to speed up towards tighter improve constraints, which may place Coinbase in a decent place.

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