In a latest X dialogue, Ripple CTO David Schwartz weighed in on a standard false impression about Coinbase’s layer-2 platform, Base.
Coinbase CLO Paul Grewal identified a standard false impression concerning the Base platform. In a tweet, Grewal acknowledged that framing sequencers on L2s equivalent to Base as exchanges misrepresents their perform as a market. Sequencers act as blockchain’s “air site visitors management,” taking unordered transactions and organizing them.
To clear up this false impression, Grewal gives the SEC’s definition of an trade as that which gives a market for bringing collectively patrons and sellers of securities. Grewal added that L2s are general-purpose blockchains that function as infrastructure. These course of messages as code (calling sensible contracts) and batch all transactions (funds, calls, messages), whereas deferring any formal order or interplay/matching guidelines (AMM, CLOB, auctions) to an app’s sensible contracts and frontend.
The Coinbase CLO explains his level additional utilizing an illustration of an off-chain infrastructure equivalent to AWS. Identical to Base, infrastructure like AWS runs code that builders present. This code can embrace funds, calls, messages and exchanges, being run deterministically. “If an trade runs on AWS, is AWS an trade? Clearly not,” Grewal requested.
Ripple CTO weighs in
The underside line of Base, for Grewal, is that this: L2 sequencers allow scalable, safe on-chain transactions that scale Ethereum computing and allow a variety of purposes in a brand new international economic system. He added that mislabeling L2 sequencers is perhaps spreading FUD, overlooking the essential function they play in scaling.
No CPU does AML. Amazon cloud internet hosting would not do any KYC or AML on the endpoints of funds or trades their techniques course of.
— David ‘JoelKatz’ Schwartz (@JoelKatz) September 23, 2025
Ripple CTO David Schwartz joined the dialog on X, buttressing the purpose made by Coinbase CLO Paul Grewal with an illustration of an off-chain infrastructure.
Schwartz acknowledged: “The argument is that the sequencer is not any completely different from a CPU or cloud internet hosting. It simply does math in a exactly agreed upon means with no proper or means to impose some other guidelines on the info it processes.”
In response to an X consumer, Schwartz added, “No CPU does AML. Amazon cloud internet hosting would not do any KYC or AML on the endpoints of funds or trades their techniques course of.”
In a latest improvement, Ripple has supplied an replace on the institutional DeFi roadmap for the XRP Ledger, which not too long ago entered the highest tier of institutional DeFi with $1 billion month-to-month stablecoin quantity and top-10 RWA exercise.
