Andre Cronje warns 'Ethereum aligned' L2s are inflating ETH again

Key Takeaways

• Andre Cronje criticizes Ethereum L2 solutions for prioritizing profits over Ethereum's decentralized principles.
• Ethereum's supply has exceeded pre-Merge levels, indicating a return to inflation driven by L2s.

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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.

“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.

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.

To address the inefficiencies of Ethereum L2 solutions, Andre Cronje has proposed leveraging Sonic’s technology to bypass the limitations of centralized models.

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