Finance

Solana’s Yakovenko Challenges Ethereum L2 Security: Is Your Crypto at Risk?

Solana‘s co-founder questioned Ethereum L2 security, while Solana saw institutional interest with Fidelity adding its token.

byAndres Castro

October 27, 2025, 12:21 PM

Neon signs displaying cyber security warnings.

Glowing neon signs flash a stark warning about the ever-present dangers of cyber threats. By MDL.

Executive Summary

Solana co-founder Anatoly Yakovenko publicly challenged the security and decentralization claims of Ethereum’s layer-2 networks, asserting that the belief in their full inheritance of Ethereum mainnet security is “erroneous” due to complex codebases and multi-signature systems.

Solana is attracting significant institutional interest, with Fidelity Digital Assets integrating the SOL token into its trading platforms for both retail and institutional clients, signaling confidence in its long-term value.

Despite some market divergence where Ethereum sees whale accumulation and Solana experiences token outflows, Solana is bolstering its ecosystem through enhanced staking offerings and treasury growth initiatives.

The Story So Far

The ongoing competition between major blockchain ecosystems, Ethereum and Solana, for market dominance and institutional adoption is driving current debates over network security and scaling. Ethereum’s strategy of relying on numerous Layer-2 networks to scale its operations is being challenged by Solana’s co-founder, who highlights perceived security vulnerabilities and complexities, while Solana simultaneously strengthens its own ecosystem and attracts significant institutional interest as a high-performance alternative.

Why This Matters

Anatoly Yakovenko’s critique of Ethereum’s layer-2 security, asserting their vulnerability due to complex code and multi-signature systems, challenges the core scaling strategy of the Ethereum ecosystem and could erode user trust in L2s. This comes as Solana gains significant institutional traction with Fidelity’s integration, positioning it as a strong alternative and intensifying the competition between these two major blockchain platforms, potentially reshaping investment flows and developer focus as both vie for market dominance.

Who Thinks What?

Solana co-founder Anatoly Yakovenko asserts that claims of Ethereum’s layer-2 (L2) networks fully inheriting mainnet security are “erroneous,” arguing that their extensive codebases and multi-signature systems introduce significant vulnerabilities and unnecessary risk to user funds.

The Ethereum ecosystem, with its proliferation of over 129 verified layer-2 networks, is seen by some industry observers as exceeding what is necessary, with Binance Research noting that these networks are impacting Ethereum’s base layer revenue by diverting activity and reducing fees for Ethereum stakers.

Institutional investors, including Fidelity Digital Assets, are demonstrating confidence in Solana by integrating SOL into trading platforms and bolstering its ecosystem through enhanced staking and treasury programs, while large holder inflows on OKX indicate strong confidence among major investors in Ethereum.

Solana co-founder Anatoly Yakovenko has publicly challenged the security and decentralization claims of Ethereum’s layer-2 (L2) scaling networks, asserting that the belief in their full inheritance of Ethereum mainnet security is “erroneous.” This critique emerges as Solana simultaneously garners significant institutional interest, with Fidelity Digital Assets adding the SOL token to its trading platforms, creating a stark contrast in market sentiment between the two prominent blockchain ecosystems.

Yakovenko Questions L2 Security

Yakovenko specifically argued that many L2s rely on extensive and intricate codebases, coupled with multi-signature systems, which he believes render them vulnerable. He stated that these networks introduce unnecessary risk to user funds and present attack surfaces that are overly complex to monitor effectively. He drew a parallel, noting that “five years into the L2 roadmap, wormhole ETH on Solana has the same worst-case risks as ETH on Base,” highlighting perceived similar security limitations despite Ethereum’s leading position for decentralized applications.

Proliferation of Ethereum L2s

The Ethereum ecosystem currently boasts over 129 verified layer-2 networks, with an additional 29 projects awaiting verification, according to data from L2Beat. Some industry observers suggest this number exceeds what is necessary. Binance Research recently pointed out that the rise of these networks is impacting Ethereum’s base layer revenue, as cheaper L2 transactions divert activity and reduce fees for Ethereum stakers.

Solana’s Institutional Momentum

Amidst the debate over Ethereum’s scaling model, Solana continues to attract institutional attention. Fidelity Digital Assets recently integrated Solana into its trading platforms for both retail and institutional clients. Fidelity, a long-time supporter of blockchain innovation with prior services for Bitcoin and Ethereum ETFs, signals confidence in Solana’s long-term value and its potential as a high-performance alternative to Ethereum.

Diverging Market Sentiment

Market data reveals a distinct split in investor outlooks for Ethereum and Solana. Ethereum has experienced significant whale accumulation, with approximately $32 million in large holder inflows on OKX, indicating strong confidence among major investors. Conversely, Solana has faced substantial token outflows, including one large holder moving 515,000 SOL, valued at roughly $93 million, to Binance over several months. Analysts view this outflow as a cautionary signal, particularly given the ongoing competition between Solana and Ethereum.

Solana Expands Staking and Treasury Growth

Despite some selling pressure, Solana is bolstering its ecosystem through enhanced staking and treasury programs. The Solana Company has partnered with Helius and Anchorage Digital to strengthen its staking offerings, now providing a 7% native staking yield to make SOL a more attractive yield-bearing asset. Additionally, Solmate, a Solana-based treasury firm, saw its stock rise 50% following plans for a validator center and strategic acquisitions. These developments underscore growing institutional trust in Solana’s capacity to support tokenized assets and cross-chain stablecoins.

The coming months are expected to bring increased scrutiny to network security, efficiency, and user trust across the blockchain landscape, as these competing layer-1 and layer-2 solutions continue to evolve and vie for market dominance.