‘Ethereum L2s can steal user funds right now’ – Are the allegations true?

  • Exec claims Ethereum L2s can “steal user funds.”
  • Industry figures propose multi-signatories to eliminate single points of failure. 

In a surprising disclosure, it has been revealed that the safety of user funds in Ethereum [ETH] L2s is not guaranteed.  

According to founder and CIO of crypto-focused Cyber Capital, Justin Bons, L2s like Arbitrum [ARB], Optimism [OP], Base, Blast, Starknet [STRK], and ZkSync can all “steal user funds.”

“Arbitrum, Optimism, Base, Blast, Starknet & ZkSync all have admin keys! All of the top L2s can steal all user funds right now.” 

This is even more disturbing because, according to VanEck analysis, the space is projected to reach a $1T value by 2030. 

The exec compared the current state of L2s to legacy banking and took a swipe at Ethereum for being a “lip service” to decentralization. 

“If this is considered safe, then we might as well go back to legacy banking. ETH gives decentralization lip service, but actions speak louder than word”

Reaction to safety concerns in Ethereum L2s

Solana [SOL] co-founder Anatoly Yakovenko suggested a “multi-sig” shared sequencer as a solution to the “single admin key.” He stated

“Each one should volunteer a tribute to be a member of the multi-sig for the shared sequencer.”

Multi-sig means having multiple signatories to increase decentralization, transparency, and eliminate the risk of a “single admin key.” 

Raj Gokal, another Solana co-founder, called for an expedited solution,

“Hope this gets fixed soon…”

However, the founder and CEO of Helius Labs, a Solana developer platform, vouched for Ethereum [ETH] L2s and preferred them over Binance [BNB], Cardano [ADA], or Ripple [XRP]

He reiterated,

“Fine, I’ll say something positive about L2s: I’d be much happier if they were in the top 10 instead of Cardano, XRP, and BNB.”

Asked whether Solana should consider some L2s as well, the Helius Labs’ exec quipped, 

“Could make sense in some cases.” 

A recent AMBcrypto analysis established increased transactions within L2s post-Dencun upgrade, which could tip ETH’s value. 

However, ETH faced key headwinds, including the SEC’s silence on spot ETFs and ongoing Middle East tensions. At the time of writing, it was barely holding above $3K. 

Next: Ahead of Bitcoin halving, will U.S. pay ‘the price of crypto regulation’?

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