Crypto Fund CIO Tags Ethereum L2 Solutions As Dangerous, Here’s Why

Justin Bons, the founder and chief funding officer of European cryptocurrency fund Cyber Capital, has as soon as once more criticized the operations of Ethereum L2 options. In a latest X publish on Saturday, Bons tagged these blockchain platforms designed to enhance the scalability of the Ethereum community as harmful with the capability to cart away customers’ funds unchecked.

Ethereum L2 Centralized Design Poses A Drawback?

In keeping with Justin Bons, most main Ethereum L2 options are centralized, with single servers typically being accountable for working the platform’s operations.  The Cyber Capital CIO states that this design which works in opposition to the cypherhunk precept of decentralization and safety, could be thought of dangerous to buyers as these chains can collapse at any second attributable to a singular occasion and even be manipulated to steal customers’ funds. 

In backing these claims, Bons made reference to Consensys’ zkEVM Roll-up community Linea whose administration on June 2nd, 2024, initiated a pause in block manufacturing attributable to a bug within the platform’s sensible contract.

The acclaimed crypto researcher additionally highlighted when the Optimism chain underwent a 2-hour downtime on February fifteenth, 2024, attributable to a bug within the community’s centralized sequencer. Along with these examples, Justin Bons’ report additionally included comparable incidents with different Ethereum L2 options corresponding to Starknet, ZkSync, Arbitrum, and Polygon, all of which could be traced to the centralized nature of those tasks.

The Cyber Capital founder expresses vital opposition to those L2 options, stating they don’t supply the identical degree of safety and stability as the primary Ethereum community. As well as, he states whereas an antagonistic state of affairs corresponding to lack of person funds is but to happen, the truth that such potential exists is extremely regarding. 

Curiously, these statements observe earlier claims by Bons that Ethereum had shaped a parasitic relationship with L2s whereby these platforms now nearly run independently of the primary community, with vital management over liquidity and different components essential to the Ethereum ecosystem.

Ethereum Poised For Additional Worth Decline

In different information, common crypto analyst Ali Martinez has postulated that Ethereum might but preserve a downtrend in the interim. Notably, the distinguished altcoin produced an underwhelming efficiency in August dropping 22.36% of its worth. In keeping with the MVRV momentum (180-day), which measures the change of the market worth to realized worth ratio over 180 days, Ethereum nonetheless seems largely overvalued. Subsequently, its downtrend is probably going removed from a reversal.

On the time of writing, the second largest cryptocurrency alternate arms at $2,500 with a slight lack of 0.99% over the past day. In the meantime, the asset’s every day buying and selling quantity has declined by 55.75% and is valued at $6.85 billion.