Ethereum
VC Blasts Ethereum and Layer-2s, Endorses Dash: Here’s Why
While Ethereum developers are working hard to develop on-chain scaling solutions, including Sharding, layer-2s is picking up steam. According to L2Beat, as of September 6, all these layer-2 scaling solutions managed nearly $34 billion.
Popular as they are, most are not only emerging to be centralized but also have security concerns. Recently, the OP Mainnet had to revert to a centralized fault-proof system after finding flaws in the decentralized version.
Ethereum And Its Layer-2s Are Flawed
In light of these weaknesses, Justin Boons, the founder and CIO of Cyber Capital, a venture capital firm, is ripping harder into Ethereum and, specifically, its layer-2 platforms. In a post on X, the founder argues that layer-2s like Arbitrum and Base are fundamentally flawed and centralized services.
Boons took to X, highlighting the shortcomings of Ethereum developers. The founder accuses them of not scaling right after launching and how “parasitic” layer-2 solutions are turning out to be. Despite their advantages, Boons claims these off-chain solutions create an unhealthy dependency.
Interestingly, the founder continued that Ethereum is becoming highly dependable on these solutions, though they don’t adhere to the guiding principles governing the blockchain: decentralization.
The venture capital is convinced that Ethereum layer-2s are taking advantage of the popularity of the mainnet not to advance its adoption but to profit.
Their decision to sacrifice decentralization (and thus security) will, at the fullness of time, only serve to undermine the entire ecosystem. In his view, platforms like Base, Arbitrum, and the OP Mainnet shouldn’t be considered “extensions” of the base layer due to their inherent weaknesses.
Dash Will Benefit For Decentralizing From The Start
As Boons criticized Ethereum and its dominant scaling options, the founder backed Dash, one of the earliest blockchain platforms. Unlike the off-chain solutions, Dash, the venture capitalist said, prioritized scaling from the beginning.
Specifically, Boons also chose the blockchain’s decision to select a decentralized governance approach. Their move, the founder added, will “benefit” them in the coming days.
Still, though there are challenges with layer-2s, Ethereum developers are working to refine the mainnet. Ethereum 2.0 will deliver on-chain scaling without sacrificing security and decentralization in a series of upgrades, from the Verge to Splurge.
At the same time, the approval of spot Ethereum ETFs is a huge endorsement of the network. Though the United States Securities and Exchange Commission (SEC) is yet to publicly endorse ETH to be a commodity, like Bitcoin, the Commodity Futures Trading Commission (CFTC) considers it a commodity.
Though one of the earliest platforms, Dash has faded into obscurity in recent years. It is outside the top 100 most valuable networks and faces liquidity challenges after delisting from some centralized exchanges like HTX.
Feature image from Canva, chart from TradingView