James Richardson
Ethereum co-founder Vitalik Buterin has hinted at the possibility of the Ethereum Foundation (EF) staking its substantial ETH holdings, valued at nearly $1 billion. This move comes amidst mounting criticism over the foundation’s limited participation in the Ethereum ecosystem.
Recent discussions on social platforms, including a suggestion by angel investor Eric Conner, have pushed for the foundation to leverage staking rewards to fund grants and employee salaries. Buterin acknowledged these concerns, providing insight into why the foundation had avoided staking in the past.
Buterin outlined two primary challenges previously preventing the foundation from staking:
- Regulatory Risks: The potential legal implications of staking ETH.
- Hard Fork Dilemmas: In the event of a network split, the foundation would need to decide which chain to support, potentially exposing its assets to slashing penalties.
While regulatory risks have diminished, Buterin emphasized the foundation is now exploring solutions to mitigate risks tied to hard forks, signaling a possible shift in its stance on staking.
Ethereum Foundation’s Current Holdings
As of October 2024, the foundation reported holding $788.7 million in crypto assets, with 99.45% in ETH. Blockchain data indicates the foundation currently holds 269,000 ETH, worth approximately $891 million.
If the foundation were to stake its entire holdings through Lido Finance, offering a 2.95% annual yield, it could generate $26.2 million annually—still significantly less than its $134.7 million expenditures in 2023.
Tim Beiko, who oversees Ethereum’s core protocol meetings, expressed caution:
“While I support utilizing the blockchain and staking when appropriate, staking alone won’t cover EF’s spending. Relying heavily on ETH treasury for payroll could be risky.”
The Ethereum Foundation’s leadership has also faced scrutiny. Buterin previously suggested that leadership changes should focus on:
- Enhancing technical expertise.
- Improving communication with developers and the community.
- Recruiting new talent to accelerate execution.
- Expanding decentralized and privacy-focused technologies.
Prominent Ethereum co-founder Joseph Lubin proposed replacing the current executive director, Aya Miyaguchi, with a dual leadership model featuring Danny Ryan and Jerome de Tychey. Lubin argued this could inject creativity, talent, and strategic vision into the foundation.
Acknowledging Leadership Contributions
Despite calls for change, current and former EF leaders have shown support for Miyaguchi. Danny Ryan noted:
“Even if leadership changes are needed, Aya Miyaguchi deserves immense respect for her dedication. Let’s focus on building a positive future rather than fostering division.”
The Ethereum Foundation faces crucial decisions regarding staking, leadership, and its broader role in the ecosystem. Whether it adopts staking or pursues other reforms, these developments could shape the future trajectory of Ethereum as a leading blockchain platform.
