Vitalik Throws Cold Water on Layer-2s!

Vitalik Buterin argues that many L2s fail to align with Ethereum’s original scaling vision.

Danielle du Toit
February 04, 2026

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Vitalik Buterin argues that many L2s fail to inherit mainnet security and no longer align with Ethereum’s original scaling vision.

Vitalik Buterin said Ethereum’s original layer-2 scaling vision “no longer makes sense,” and argued that many L2s have failed to achieve real decentralization or properly inherit Ethereum’s security.
He criticized high-throughput layer-2s that rely on multisig bridges or weak trust assumptions, saying they are not truly scaling Ethereum even if they are EVM-compatible.
Buterin explained that true Ethereum scaling should create block space fully secured by the mainnet, and warned that diluted security links turn layer-2s into separate systems rather than genuine extensions of Ethereum.

Xero shares plunged nearly 16% as tech stocks sold off across the ASX.

Xero Ltd shares fell nearly 16% to around $80.82, hovering near their lowest levels since early 2023, as heavy selling swept through the tech sector and sharply shifted market sentiment.
The drop came thanks to weakness in technology stocks, with the S&P/ASX All Technology Index sliding 7.77%.
Investor anxiety around artificial intelligence added to the sell-off, as markets reassessed whether AI adoption could undermine traditional subscription-based software models like accounting and bookkeeping platforms.

Nevada regulators sued Coinbase over alleged unlicensed sports wagering.

Nevada Gaming Control Board filed a civil enforcement action against Coinbase, alleging the company facilitated unlicensed sports wagering through crypto-linked derivatives and prediction market offerings in Nevada.
Regulators asked the court to issue a temporary restraining order and preliminary injunction that would immediately stop Coinbase from operating derivatives and prediction markets tied to sporting events.
Board chair Mike Dreitzer said unauthorized sports wagering is a serious violation regardless of whether it is offered by traditional sportsbooks or newer crypto and financial platforms.

Anthropic is trending after reports that its valuation reached $350B on major tech backing.

Anthropic is trending after reports revealed its valuation surged to around $350 billion after fresh backing from major tech players, including Microsoft and Nvidia.
Analysts raised revenue projections sharply as enterprises adopt Claude for coding, automation, data analysis, cybersecurity, and internal workflows, placing Anthropic among the top-tier AI leaders.
Despite its impressive growth, the valuation jump is drawing scrutiny from institutional investors, as heavy spending on compute infrastructure and safety research keeps profitability uncertain.

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