Buterin Suggests Base Is Non‑Custodial but Ethereum Risks From Sequencer Centralization Could Persist

• Base is a Layer 2 rollup with on-chain settlement on Ethereum, enabling user withdrawals to the mainnet.

• Critics point to a centralized sequencer and governance powers; proponents highlight non-custodial withdrawal guarantees.

• Base TVL rose ~10x since early 2024 to nearly $5B, while recent fee and revenue metrics show L2 outperformance versus L1.

Base Layer 2 defended by Vitalik Buterin: Base is non-custodial and allows mainnet withdrawals — read latest facts, TVL data and expert views. Learn more.

What is Base Layer 2?

Base Layer 2 is a rollup-style Ethereum L2 designed for low-cost transactions and on-chain settlement on Ethereum. It uses a sequencer for transaction ordering but, as Vitalik Buterin emphasizes, remains non-custodial: users can exit to the Ethereum mainnet if the L2 becomes unavailable.

Why did Vitalik Buterin defend Base?

Buterin addressed claims that Base functions as an “unregistered securities exchange” or could “rug” users. He clarified that Base does not hold custody over users’ funds and that its security model is anchored to Ethereum’s settlement guarantees. This means assets locked on Base remain withdrawable to the L1 under the rollup model.

How does Base protect user funds if the sequencer is centralized?

Base protects funds through on-chain settlement and withdrawal mechanisms to Ethereum. Even with a centralized sequencer, the rollup’s state can be verified and funds withdrawn on-chain if the sequencer stops responding. This withdrawal guarantee is the core reason some experts classify Base as a non-custodial, stage-1 L2.

What are the main criticisms of Base?

Critics focus on sequencer centralization and governance override risks. Observers warn that security councils or multisig powers could freeze or delay withdrawals in practice, even if the protocol allows eventual exits. These concerns center on operational centralization rather than the cryptographic withdrawal guarantees.

Vitalik noted that certain voting powers remain outside L2 councils in some rollups, which strengthens non-custodial claims. Still, debates continue on whether governance constructs and emergency powers introduce practical custody risks.

Source: X

The debate continues — what did supporters and critics say?

Supporters argue that Base aligns with Ethereum’s L2 security model: cryptographic proofs and the ability to withdraw to L1 are fundamental safeguards. Max Resnick and others recommend targeted regulation at sequencing layers, not blanket claims of custodial exchange status.

Critics counter that real-world governance decisions can delay or block user access. Joseph Lubin and some protocol researchers warn that divergence from the mainnet roadmap or excessive central control could create systemic risk.

When was Base launched and how fast has it grown?

Base launched in August 2023 as Coinbase’s low-cost L2 for on-chain products. Since early 2024, Total Value Locked (TVL) has grown roughly 10x from ~$500 million to nearly $5 billion.

Recent metrics show Base outpacing the Ethereum mainnet in fees and revenues over the last quarter: fees increased ~4% to $146K with revenue around $141.7K, while L1 revenue fell significantly year-over-year.

Source: Artemis

How will Base evolve toward decentralization?

Base’s team, led by Jesse Pollak, has publicly committed to moving toward a “stage 2” decentralization roadmap. This includes plans to decentralize block production and broaden governance participation. Those steps would reduce operational centralization while preserving withdrawal guarantees.

Frequently Asked Questions

Can Base steal user funds?

No. Base is non-custodial in design: users retain cryptographic ability to withdraw funds to the Ethereum mainnet, preventing sequencer operators from permanently stealing assets.

Is Base centralized because Coinbase operates the sequencer?

Sequencer operation by Coinbase is an operational centralization point, but not necessarily custodial custody. Centralization risks remain a governance and operational consideration, not an automatic loss of user withdrawal guarantees.

Key Takeaways

• Non-custodial design: Base’s settlement on Ethereum enables user withdrawals, limiting custodian risk.
• Operational centralization risk: Sequencer and governance powers raise practical concerns that merit technical and regulatory attention.
• Growth and roadmap: Base’s rapid TVL and revenue growth are driving a roadmap toward greater decentralization (stage 2).

Conclusion

Vitalik Buterin’s defense of Base underscores a key distinction: sequencer centralization does not automatically equal custody over user assets. Base remains a Layer 2 rollup with withdrawal guarantees to Ethereum, and its team has signaled plans to decentralize further. Watch for stage-2 milestones and governance changes as the best indicators of long-term risk reduction.