Andre Cronje, founder of Sonic Labs and called “deFi Godfather”, has criticized Ethereum L2 solutions for their handling of profits and potential misalignment with Ethereum’s decentralized principles.
Be L2. Have centralized sequencer. Generate $120m in fees. Pay Ethereum $10m of that amount for DA & security. Dump $110m for profit. Be “Ethereum aligned”.
I do not understand how ethereans convince themselves with these mental gymnastics.
L2s are why Ethereum is… pic.twitter.com/edOlPOsdah
— Andre Cronje (@AndreCronjeTech) February 8, 2025
“I do not understand how ethereans convince themselves with these mental gymnastics. L2s are why Ethereum is inflationary again.” Cronje posted on X
Base, Coinbase’s Ethereum L2, responded to the criticism through its strategy lead, Kabir.
“Base is and will continue growing Ethereum. We’re investing all of our earnings and resources into doing this. Base and Coinbase hold over 100,000 ETH—more than $300 million—making it the largest ETH holding of any public company today,” Kabir wrote.
This narrative just isn’t true — here are the facts:
Base is and will continue growing Ethereum. We’re investing all of our earnings and resources into doing this and we have gone from zero to millions of new people onchain in 1.5 years.
Base and Coinbase have and continue to… pic.twitter.com/VR3BAAUhIc
— Kabir | kabir.base.eth (@kabir_base) February 9, 2025
The debate centers on two competing visions for Ethereum’s scalability.
Critics argue that L2s generate substantial revenue while returning only a fraction to Ethereum for data availability and security.
Proponents of decentralized scalability, including Cronje, advocate for enhancing Ethereum’s base layer directly using solutions like Sonic to reduce dependency on external L2 providers.
Julio Moreno, head of research at CryptoQuant, noted that Ethereum’s supply has now exceeded pre-Merge levels (September 2022), confirming the network’s return to inflation.
ETH supply is now higher than before the Merge.
Nine months ago we published an analysis on why this would be the case.Take a look. https://t.co/Q9Z9WFjZbs
— Julio Moreno (@jjcmoreno) February 7, 2025
To address the inefficiencies of Ethereum L2 solutions, Andre Cronje has proposed leveraging Sonic’s technology to bypass the limitations of centralized models.
