Solana Co-Founder Questions the Need for Layer2
“We don’t need L2s when L1 can do it all,” says YakovenkoAnatoly Yakovenko, co-founder of Solana, is doubling down on a provocative stance that’s stirring the blockchain world: Layer-2s? Not necessary. In a recent interview cited by U.Today, Yakovenko claimed that building L2 solutions is redundant when modern Layer-1s like Solana already offer speed, affordability, and security.This comes as the broader Ethereum ecosystem continues to lean heavily on L2 rollups to scale. But for Yakovenko, the very premise behind that direction is flawed.L1 is Fast Enough—And Secure Enough”In his remarks, Yakovenko argued that L1s like Solana are capable of delivering data at high speeds without sacrificing decentralization or relying on “complex fraud proofs or multisig upgrades.” According to him, there’s no need to compromise security just to scale.When asked about the limitations of data storage on L1 chains, he revealed that Solana produces only about 80 terabytes of data annually—a surprisingly low figure given the chain’s growing usage.“There’s simply no need to build value-less L2s,” Yakovenko emphasized earlier this month, suggesting that developers are better off launching tokens directly on performant L1s like Solana.Competing Against Ethereum’s L2 EcosystemYakovenko didn’t hold back in positioning Solana as a direct competitor to Ethereum’s expanding L2 stack, including platforms like Arbitrum, Optimism, and Base. However, he clarified that Solana is not competing with Ethereum mainnet itself, but rather its fragmented scaling layers.He also took a jab at the redundancy of having numerous L2s:“If a single L2 can handle parallel execution and consume all blob space, why do we need more? There aren’t infinite useful smart contracts out there.”The implication is clear: from his vantage point, multiple L2s create unnecessary complexity—and Solana’s architecture makes them obsolete.L2s Draining Ethereum?Yakovenko has previously criticized Ethereum’s L2s as “parasitic”, accusing them of cannibalizing mainnet activity. He pointed to a 95% drop in Ethereum’s quarterly transaction fee revenue since its 2021 peak as evidence that L2s have diluted the value of the base layer.This critique highlights a growing tension in blockchain circles: Is Ethereum’s rollup-centric roadmap fragmenting its own value proposition? Or is it simply decentralization done right?Outlook: A Layer-1 vs Layer-2 Showdown?Solana’s positioning signals a philosophical divergence from Ethereum’s L2-centric design. Yakovenko’s comments aren’t just technical critiques—they’re part of a broader bet that a powerful Layer-1 can scale without the overhead of secondary networks.Expect this debate to intensify as Solana’s performance metrics improve and more projects weigh their on-chain options. If Solana continues to onboard developers and maintain low costs at scale, its “no L2 needed” ethos might just catch on.Still, the Ethereum ecosystem is vast—and rollups have deep momentum and institutional backing. The real question is whether users and devs prefer the streamlined simplicity of Solana or the modular flexibility of Ethereum + L2s.
ETH Supply Dries Up on Exchanges, but Will Prices Follow?
Is This the Bottom? Ethereum Whales Bet Big Despite Bearish Price ActionAfter slipping below the $2,000 mark for the first time in over a year, Ethereum’s sluggish price action in early 2025 has rattled retail and institutional investors alike. But behind the scenes, on-chain data reveals a quiet accumulation phase underway—and a potential supply crunch looming.Whale Movements Signal Strategic AccumulationCrypto influencer and analyst Crypto Rover highlighted a sharp decline in Ethereum's exchange reserves in recent weeks. His analysis, posted on X, shows large volumes of ETH leaving centralized exchanges—a move typically associated with long-term holding strategies rather than immediate sell-offs.“If this trend continues, we could be looking at a supply shock,” Rover noted.Exchange reserve metrics, sourced from CryptoQuant, confirm the trend: Ethereum balances on exchanges have dropped to a historic low of 18.3 million ETH.On-Chain Data Paints a Bullish PictureSantiment data further reinforces the bullish signal. Over the past 72 hours, Ethereum whales—wallets holding between 1 million and 10 million ETH—have added more than 120,000 ETH to their portfolios.• Whales often act as market trendsetters, and this coordinated move may indicate growing confidence in Ethereum’s long-term value. • The reduction in exchange-held ETH reduces circulating supply, increasing the chance of price volatility in response to even moderate demand.Supply Shock Could Be the Next CatalystWith more ETH being locked away in cold storage, staking contracts, and DeFi protocols, available supply is thinning out. If demand picks up—even marginally—the result could be rapid price appreciation due to simple supply-side pressure.“Investors are positioning themselves for a potential breakout,” said one analyst at a digital asset hedge fund. “We’re seeing metrics align the same way they did ahead of Ethereum’s 2021 bull run.”Market Snapshot: Calm Before the Climb?At the time of reporting, Ethereum is trading at approximately $1,990—up 0.6% in the last 24 hours. While still under key psychological levels, the current market dynamics suggest Ethereum may be setting the stage for a broader move.Outlook: Is a Breakout Brewing?• Accumulation Trend: Continued outflows from exchanges point to investor confidence and long-term positioning. • Whales Wake Up: The re-entry of large holders into the ETH market could set the tone for Q2. • Supply Crunch: With reserves at multi-year lows, Ethereum could be primed for a sharp rebound if demand returns. • Market Still Cautious: Despite the signs, broader macro uncertainty and lack of a clear catalyst keep traders on edge.The bottom line? Ethereum may be down, but it’s far from out. If current on-chain trends persist, ETH could soon find itself at the center of the next major crypto rotation.
A Thaw at the SEC: Roundtable Signals New Willingness to Work With Crypto
SEC Signals Openness to Collaborate With Crypto Industry for Regulatory ClarityWashington, D.C., March 21 — In a notable shift in tone, the U.S. Securities and Exchange Commission (SEC) held its first-ever crypto-focused roundtable, signaling an intent to work alongside the digital asset industry to develop a clearer, more practical regulatory framework.The event, titled “Spring Sprint Toward Crypto Clarity,” featured key participation from SEC Commissioner Hester Peirce, who leads the agency’s crypto task force, and Acting Chairman Mark Uyeda. The roundtable marked a rare moment of direct dialogue between securities regulators and crypto market participants.SEC Commissioner: “Ready for Serious Engagement”Commissioner Peirce struck a collaborative tone, stating:“We welcome the opportunity to work with the crypto industry to find a workable framework. We are ready to sprint toward clarity.”Peirce emphasized the need for a transparent and nuanced taxonomy to classify various types of crypto assets, underscoring the complexity of applying legacy securities laws to an evolving asset class.Regulatory Boundaries Still MurkyActing SEC Chair Mark Uyeda acknowledged that while some areas—such as meme coins or mining—may fall outside securities law, many parts of the digital asset ecosystem remain in regulatory limbo. He hinted at a case-by-case evaluation model rather than a blanket approach.The panel discussion, which included 12 securities attorneys, addressed key pain points, including:The reluctance of early-stage crypto projects to go public due to fear of regulatory repercussions.A growing trend toward IPO-style fundraising models.The need for clearer exemptions and safe harbor provisions for token launches.John Reed Stark, former SEC enforcement chief, offered a contrasting view:“Crypto still lacks tangible utility. If it disappeared tomorrow, the world wouldn’t miss it unless it had speculative capital tied up in it.”NFTs Next in Line for SEC GuidanceCommissioner Peirce also hinted that non-fungible tokens (NFTs) could be the next regulatory focus.“NFTs are uniquely positioned to benefit from clear SEC guidance,” she said.She also criticized the Commission’s recent lack of communication with the crypto community:“Explaining how we interpret the law doesn't always require formal rulemaking—but we’ve fallen short in doing even that.”Outlook: Early Signs of a Regulatory ResetA Thaw in Relations: The roundtable reflects a softening of the SEC’s stance and could mark the beginning of a more constructive regulatory dialogue.Policy in Motion: If sustained, this initiative may help create clearer guardrails for developers, entrepreneurs, and investors operating in the U.S.NFTs Under the Microscope: Expect a formal policy framework around NFTs to emerge, potentially offering new compliance paths.Skepticism Remains: While some insiders welcome the shift, critics argue that the SEC still lacks urgency in crafting policies that foster innovation.The takeaway? The SEC appears to finally be listening—now the question is whether it will move fast enough to catch up with the crypto industry's pace.
SEC Confirms: Bitcoin Mining Is Not a Securities Transaction
SEC Confirms PoW Mining Does Not Constitute Securities TradingWashington, D.C., March 20 — The U.S. Securities and Exchange Commission (SEC) has officially clarified that Proof-of-Work (PoW) mining—whether solo or pool-based—does not constitute securities trading under federal law. The new guidance, released on Wednesday, provides long-awaited regulatory certainty for Bitcoin miners and the broader PoW ecosystem.According to the SEC’s Division of Corporation Finance, PoW mining is fundamentally a computational activity rather than an investment contract. The agency emphasized that it fails to meet the "reliance on the efforts of others" prong of the Howey Test, a legal benchmark used to determine what qualifies as a security.What the SEC Said About PoWThe agency stated:“The activity of validating transactions and adding them to the blockchain via proof-of-work mining is not, in itself, a securities transaction. It represents the deployment of computational resources, not the offering or sale of investment interests.”This clarification applies broadly to Bitcoin and any other networks that utilize PoW consensus mechanisms. It also means that miners are not required to register their operations or rewards as securities offerings.Industry Reaction: A Win for DecentralizationDeFi-focused news outlet The Defiant described the ruling as "a win for decentralization,” especially in light of past regulatory ambiguity. The decision provides relief to miners, who have long operated in a gray area concerning securities law.Industry experts welcomed the move, noting that it distinguishes between active computational work and passive investment in tokenized securities."This is a long-overdue acknowledgment that PoW mining, particularly in Bitcoin, is fundamentally distinct from staking models that may involve pooled investments and reward-sharing structures," said a policy analyst at Coin Center.Outlook: What Comes Next?Greater Operational Clarity: Bitcoin miners can operate with greater legal confidence in the U.S., potentially boosting domestic hash rate and infrastructure investments.Regulatory Contrast: The SEC's decision may sharpen the divide between how PoW and Proof-of-Stake (PoS) systems are treated under securities laws—raising new questions for Ethereum and other PoS networks.Market Sentiment: This move is likely to be perceived as a positive signal for Bitcoin advocates and institutional investors seeking regulatory clarity.Global Implications: As the U.S. solidifies its position, other jurisdictions may follow suit in defining mining activity as distinct from securities-related behavior.The SEC’s clarification marks a pivotal step in shaping a more predictable regulatory environment for crypto infrastructure, reaffirming that not all blockchain activities fall under the securities umbrella.
America Will Be the Crypto Capital” — Trump Pressures Congress on Stablecoin Law
Trump Pushes for Stablecoin Legislation, Vows to Make U.S. a “Crypto Powerhouse”New York, March 20 — In a landmark speech at the Blockworks Digital Asset Summit on Wednesday, U.S. President Donald Trump called on Congress to pass legislation to regulate stablecoins, positioning the U.S. as a global leader in the rapidly evolving crypto economy.The event marked the first time a sitting U.S. president has spoken at a cryptocurrency conference, highlighting the Trump administration’s growing alignment with digital asset innovation.Clear Rules to Power InnovationTrump emphasized that clear and straightforward regulation would unleash a new wave of crypto innovation while ensuring the U.S. dollar retains its dominance as the global reserve currency.“Congress must pass a breakthrough bill to establish simple, common-sense rules for stablecoins and broader market structure,” Trump stated. “Stablecoins have the potential to strengthen our financial system and preserve dollar supremacy.”The President also argued that regulatory clarity would pave the way for greater institutional participation, noting that “with the right legal framework, both major institutions and small businesses will have the freedom to invest and innovate.”America as the Undisputed Crypto SuperpowerIn his most direct comments on digital assets to date, Trump laid out his vision to make the United States the “Undisputed Bitcoin Superpower,” pledging to transform the country into the global epicenter of blockchain and digital finance.His comments signal a sharp contrast with the Biden administration’s more aggressive regulatory stance, which has been criticized by some industry participants as stifling innovation and driving projects overseas.“America will lead the future of digital finance,” Trump declared. “We’re going to build the greatest crypto hub in the world.”Outlook: Legislation, Momentum, and Market ImpactLegislative Momentum: Trump’s call for stablecoin regulation could reignite bipartisan talks in Congress. Existing proposals like the McHenry-Thompson bill may now receive new political capital and urgency.Institutional Confidence: Clear legal frameworks may reduce compliance friction and unlock new capital inflows from traditional finance players waiting on the sidelines.Global Market Dynamics: As the U.S. shifts toward a more crypto-friendly stance, it could reverse the talent and capital flight seen in recent years. A clear U.S. regulatory model may also set the standard for emerging markets.Political Signaling: Trump’s comments could galvanize further support among crypto-native voters and Silicon Valley donors, especially as digital asset issues become more prominent in the 2024 election cycle.As the U.S. charts a new path for digital finance leadership, all eyes are on whether Congress will follow through—and how quickly the world’s largest economy can adapt to the decentralized era.
Trump vs. Powell? Fed Independence Wavers as Succession War Begins
Fed Chair Jerome Powell Faces Political Heat as Leadership Battle IntensifiesMarch 18 — Washington, D.C. As economic uncertainty deepens and the 2026 end of his term looms, Federal Reserve Chair Jerome Powell finds himself under mounting political pressure while navigating the early contours of a fierce internal succession race.The Wall Street Journal reported on Monday that Powell is caught between Donald Trump’s protectionist policies, political expectations for rate cuts, and the Fed’s obligation to remain an independent monetary authority. “Powell is neither a dove nor a hawk—he’s like a duck paddling furiously underwater,” the paper quoted insiders as saying.Powell’s Balancing Act: Trade Wars, Inflation, and Fed IndependencePowell has already steered the U.S. economy through the COVID-19 pandemic, the worst inflation in decades, and several banking crises. Now, Trump’s renewed push for tariffs and interest rate cuts presents a new dilemma for the central bank.While U.S. inflation has cooled from a peak of 7.2% in 2022 to 2.5% as of January, the Fed is expected to hold interest rates steady at this week’s policy meeting.However, should trade wars trigger both slower growth and rising prices, the Fed may face the classic stagflation quandary: cut rates to support growth or hold firm to tame inflation.Compounding the problem is Trump’s history of publicly pressuring the Fed to lower rates during his first term—a trend likely to continue if he regains office.Trump Allies Push for Influence, Fed Leadership in FluxKey Trump-aligned figures have criticized Powell’s handling of inflation and floated ideas to curtail the Fed’s autonomy or even inject more executive influence into policy decisions.Simultaneously, the race to replace Powell is heating up. While his term ends in February 2026, several high-profile candidates are already positioning themselves:Christopher Waller (Fed Governor)A Trump appointee who has shifted from hawkish to dovish, Waller is now advocating rate cuts to cushion trade-war impacts. His recent tone shift is widely seen as a strategic move to appeal to both political camps.Michelle Bowman (Fed Governor)Another Trump-era pick, Bowman has emphasized Fed independence but aligns with conservative banking regulations. She criticized pre-election rate cuts in 2023, bolstering her credibility with Trump loyalists.Adriana Kugler (Fed Governor)A Biden appointee focused on labor market health, immigration, and equitable growth. While popular among progressives, her stance may clash with a Trump-led administration’s policy goals.Austan Goolsbee (Chicago Fed President)A strong voice for rate cuts amid recession fears. Goolsbee has warned that “rates may fall significantly in 12–18 months.” However, rising protectionism could weaken his prospects.Fed Independence Under ThreatAt the core of this power struggle lies the Fed’s independence—now under both external political pressure and internal ideological divergence.Trump’s potential return raises questions about whether future Fed chairs will be allowed to make policy free from executive interference. Already, Trump allies are discussing changes to Fed oversight, possibly reshaping its decision-making framework.Outlook: Implications for Crypto MarketsInterest Rate Volatility: If Trump regains power and succeeds in pushing for faster rate cuts, crypto could benefit from renewed dollar weakness and more liquidity.Institutional Skepticism: Interference in Fed policy may erode market trust in the dollar’s long-term value, bolstering Bitcoin’s safe-haven narrative.Macro Uncertainty: A politically influenced Fed may lead to erratic policy shifts, increasing market volatility. For crypto, this could create short-term gains—but also long-term risk.2026 Chair Battle: The appointment of a new Fed chair could reshape the central bank’s stance on digital assets, especially if the successor is pro-innovation or favors financial deregulation.As Powell nears the final stretch of his term, markets—crypto included—are bracing for what could be one of the most politically charged transitions in Fed history.
