While Ethereum co-founder Vitalik Buterin once championed rollups as the future of blockchain scaling, his recent declaration marks a stark shift in vision. On February 3, 2026, Buterin effectively pronounced the era of “branded shards” over, taking direct aim at projects like Coinbase’s Base, which now dominates a whopping 60% of Layer-2 income.
Base’s rise has been meteoric. By late 2025, it captured 46% of the entire Layer-2 market share, surpassing Arbitrum with a total value locked of $4.63 billion. But Buterin isn’t impressed. Not even close.
His criticism is brutal and straightforward: most Layer-2s rely on multisig wallets, security councils, and centralized operators. Base, despite its success, remains firmly under Coinbase’s thumb. Buterin has previously acknowledged that Base was “doing things right” despite potential compromises on decentralization. So much for decentralization, right?
Most Layer-2s are centralized puppets, with Base dancing on Coinbase’s strings. Decentralization? Dream on.
“If you create an EVM that does 10,000 TPS, but its connection to L1 is through a multisig bridge, you are not scaling Ethereum,” Buterin stated bluntly. Ouch.
Coinbase defends its position by pointing to regulatory obligations. Anti-money laundering and know-your-customer requirements prevent them from handing over upgrade keys to decentralized autonomous organizations. Fair enough, but Buterin isn’t buying it. Regulatory-driven centralization, he argues, means these projects simply aren’t scaling Ethereum.
The deeper issue? Most Layer-2s haven’t even reached Stage 2 decentralization with fully decentralized fraud or validity proof systems. They’re glorified centralized databases masquerading as blockchains. Base only reached Stage 1 by mid-2025. Progress has been painfully slow.
Meanwhile, rollups are raking in cash while paying comparatively little to Ethereum for security. Base alone posted around 531.54 GiB of data to Ethereum over the last year. In fact, while generating over $75 million in revenue in 2025, Base paid just about $1.52 million to Ethereum for transaction data and settlement overhead.
Buterin’s solution? Forget the “rollup-centric” vision. It no longer makes sense with faster scaling on the main Ethereum layer. Layer-2s need to specialize beyond simple scaling functions. Investors concerned about Base’s dominance should consider portfolio diversification strategies to mitigate exposure to single-platform risks in the Layer-2 ecosystem.
The message is clear: Ethereum’s future might not include branded Layer-2s like Base. At least not in their current form. Time to adapt or get left behind.
