Ethereum Co-Founder Sets New Standards for L2 Project Recognition
TLDR:
Vitalik Buterin sold 950 ETH worth $2.28 million in recent weeks
Buterin explained the sale was triggered by an automatic order set on August 29
Starting in 2025, Buterin will only publicly mention Layer 2 solutions at “Stage 1” development or higher
Several ZK rollup teams aim to reach Stage 1 by end of 2023
Buterin believes the “era of rollups being glorified multisigs is coming to an end”
Vitalik Buterin, co-founder of Ethereum, recently addressed concerns about his sale of Ether (ETH) tokens. On-chain data showed that a wallet associated with Buterin, known as vitalik.eth, sold 950 ETH worth approximately $2.28 million over the past two weeks.
vitalik.eth(@VitalikButerin) deposited the 2.27M $USDC obtained from selling 950 $ETH in the past 2 weeks into #Aave 3 hours ago.#Vitalik also deposited 2,851 $ETH($6.73M) into #Aave.https://t.co/UEX85tYFwW pic.twitter.com/7SVFHjnAOT
— Lookonchain (@lookonchain) September 12, 2024
In response to questions about these sales, Buterin explained that the most recent transaction “was triggered by an automatic cowswap twap order that was set up way back on Aug 29.” He clarified that this was the last of these pre-set orders.
The sales occurred at an average price of $2,396 per ETH. Some of the proceeds, totaling around $6.73 million in USDC stablecoins, were moved to the Aave platform.
Stricter Standards for L2 Projects
In addition to addressing the ETH sales, Buterin announced new criteria for publicly mentioning Layer 2 (L2) scaling solutions. Starting in 2025, he will only acknowledge L2 projects that have reached “Stage 1” or higher in their development.
I take this seriously. Starting next year, I plan to only publicly mention (in blogs, talks, etc) L2s that are stage 1+, with *maybe a short grace period* for new genuinely interesting projects.
It doesn’t matter if I invested, or if you’re my friend; stage 1 or bust.
Multiple… pic.twitter.com/4cGxgsfmUc
— vitalik.eth (@VitalikButerin) September 12, 2024
Buterin emphasized that this standard would apply universally, regardless of any personal investments or connections to projects. He stated, “It doesn’t matter if I invested, or if you’re my friend; stage 1 or bust.”
The Ethereum co-founder outlined the requirements for Stage 1, which include:
An active fraud-proof or validity-proof scheme
A multi-signature-based override mechanism with strict conditions
A minimum 6 of 8 signature requirement for the security council
A quorum-blocking group external to the rollup organization
A seven-day delay window for upgrades
Buterin expressed optimism about the progress of Zero-Knowledge (ZK) rollup teams, noting that several are on track to achieve Stage 1 by the end of 2023. However, he cautioned against removing “training wheels” prematurely, stressing the importance of maintaining security measures until proof systems are fully reliable.
The Path to L2 Decentralization
Buterin’s announcement builds on his 2022 concept of “training wheels” for Ethereum scaling rollup projects. He outlined three stages of development for L2 solutions:
Stage 0: “Full training wheels” – Basic rollup functionality with simple multisignature wallet control
Stage 1: Introduction of fraud or validity proofs with specific security council requirements
Stage 2: “No training wheels” – Highly limited use of security councils and extended upgrade activation delays
Several prominent L2 teams, including those behind Linea, ZKsync, Arbitrum, and Optimism, have indicated that full Stage 2 decentralization could be achieved within a few years.
Buterin concluded his statements by saying, “The era of rollups being glorified multisigs is coming to an end. The era of cryptographic trust is upon us.”
