Ethereum Foundation (EF) is a non-profit organization focused on supporting Ethereum and its associated technologies. ^[1][2]

History

The Ethereum Foundation (EF) was established in 2014 by Vitalik Buterin and other co-founders of Ethereum. The organization was created to support the development of Ethereum, a decentralized platform enabling the execution of smart contracts.

The EF's initial goals included promoting the growth and adoption of Ethereum and ensuring that the network remains open and accessible. One of the milestones in EF's early history was the launch of the Ethereum mainnet on July 30, 2015.

Subsequent updates, such as Homestead in 2016 and Byzantium in 2017, enhanced the network's functionality and security. Another event was the 2016 hard fork resulting in the creation of Ethereum Classic following the DAO hack. ^[18][19]

Projects and Contributions

The Ethereum Foundation has contributed to the development of the Ethereum ecosystem, particularly in software development and tools. EF has played a role in the development of Geth and Parity, two of the most used Ethereum clients.

These clients are essential for running nodes on the Ethereum network and have contributed to its stability and reliability. Additionally, the EF has been involved in developing tools like Solidity, a programming language for writing smart contracts on the Ethereum blockchain. ^[19][20][21]

Major Contributions

The EF has funded numerous projects impacting the Ethereum ecosystem. Notable projects include Uniswap, a decentralized exchange, and MetaMask, a wallet and gateway to decentralized applications. These projects have advanced the capabilities of the Ethereum network and fostered innovation across the broader blockchain space.

The EF has also been involved in research areas such as zero-knowledge proofs (zk-SNARKs), Proof of Stake (PoS), and sharding, which are critical for Ethereum's scalability and security. ^[22][23][24]

Events and Conferences

Since 2014, the Ethereum Foundation has organized Devcon, an annual conference for Ethereum developers, researchers, and enthusiasts. Devcon serves as a platform for collaboration and innovation, bringing together leading minds from around the world to share their insights.

In addition to Devcon, the EF supports and participates in various hackathons and events organized by ETHGlobal. The Foundation also supports regional Ethereum conferences and meetups, helping to build a global community of Ethereum users and developers.^[16][17]

Research Initiatives

The EF's research initiatives are essential for the ongoing evolution of the Ethereum network. A primary focus has been on developing Ethereum 2.0, addressing challenges such as scalability, security, and sustainability.

This upgrade involves a transition from a Proof of Work (PoW) consensus mechanism to Proof of Stake (PoS), along with the implementation of sharding to improve transaction throughput.

The EF's research teams are also involved in cryptographic advancements and security enhancements. ^[1][25]

Education and Outreach

The EF emphasizes education and outreach to ensure the Ethereum community continues to grow. This includes improving Ethereum's documentation, providing tutorials for developers and users, and organizing workshops and training sessions. By making educational resources available, the EF helps to onboard new developers and users, ensuring that the Ethereum network remains accessible and user-friendly.

Governance and Decentralization

Governance within the Ethereum ecosystem is a topic of ongoing discussion. The EF facilitates these discussions, exploring different governance models and mechanisms.

Recent debates, such as the proposal to slow ETH issuance, highlight the dynamic nature of Ethereum's governance and the involvement of the community in decision-making processes. ^[26][27]

Ecosystem Support Program

The Ecosystem Support Program (ESP) is the public-facing allocation arm of the Ethereum Foundation. ESP provides funding and support to eligible projects aimed at improving Ethereum, focusing on developer tools, research, community building, infrastructure, and open standards.

The Ecosystem Support Program aims to offer both financial and non-financial assistance to projects and entities within the broader Ethereum community, with the goal of fostering the ecosystem's development. It builds upon the foundation laid by the original Ethereum Grants Program, which primarily emphasized financial aid.

Since its inception, the program has supported numerous projects, helping to drive development across the ecosystem. The ESP provides financial grants and offers visibility, access to a knowledge base, and connections to developers and researchers. ^[2]

• In 2021, the Ethereum Foundation allocated $26.9 million to support 136 projects, symbolized by a small succulent plant.
• In 2022, funding increased to $30.0 million, supporting 397 projects, represented by a medium succulent plant.
• By 2023, the program expanded further, funding 498 projects with $61.1 million, symbolized by a big opened succulent plant. ^[3]

Grants

In the Ethereum Foundation, "grants" refer to direct funding provided after a formal application, review, and decision process by the Ecosystem Support Program (ESP) team with input from technical advisors. These grants support projects essential to Ethereum's success without requiring commercialization, ensuring resources remain freely accessible to all. ^[4]

Grant Types

• Small Grants: Capped at $30,000, intended for smaller, experimental, early-stage projects or those with shorter timelines.

• Project Grants: Undergo a more intensive review process with no fixed funding limit. These grants are for projects with multiple phases or components, longer timelines, complex needs, and higher financial or operational overhead.

• Event Sponsorships: Accepted through the small grants program for events focused on Ethereum's technology and community.

Other Support

The “support” in the Ecosystem Support Program includes more than grants. The Ethereum Foundation offers visibility, access to a vast knowledge base, a dedicated team, and connections to leading developers, researchers, and community members. These resources are deployed primarily through Office Hours, the main channel for non-financial support. ^[4]

Examples of Non-Financial Support:

• Feedback and guidance
• Facilitating collaborations
• Connections with mentors and advisors
• Information about events like hackathons and conferences
• Introductions to community members in the same area
• Platform access
• Identifying other resources or funding opportunities

Devcon

Since 2014, the Ethereum Foundation has organized Devcon, an annual conference for Ethereum developers, researchers, thinkers, and makers. ^[2]

Fellowship

The Ethereum Foundation Fellowship Program is an initiative aimed at addressing gaps in representation across cultures, nationalities, and economic classes. It seeks to bridge these gaps by identifying and supporting talented individuals who contribute to Ethereum’s relevance and by breaking down barriers to entry for underrepresented people and communities in the Web3 space. ^[2]

First Cohort

The Ethereum Foundation Fellowship Program was a pilot project launched by Next Billion, a team within the Ethereum Foundation that focuses on opportunities in emerging economies. The program collaborated with change-makers whose projects had significant potential to create an impact in these regions using Ethereum. Fellows received mentorship, expertise, and access to leaders within the Ethereum ecosystem. ^[5]

Unlike regular grant support, the Fellowship Program aimed to extend its impact beyond funding specific projects. It sought to inspire others to learn from the cohort's work and to undertake similar initiatives in their own communities or develop enhanced solutions. ^[5]

Benson Njuguna, formerly of Acre Africa, worked on using blockchain solutions for a microinsurance product aimed at protecting small-scale farmers in Kenya from extreme weather events, showcasing Ethereum's potential for sustainable products targeting lower-income individuals. ^[5]

Chuy Cepeda, from OS.City, provided a platform for municipal and national governments to issue digital identities and blockchain-based documents. He collaborated with the Argentine government to promote blockchain adoption in the public sector in Latin America. ^[5]

Kuldeep Bandhu Aryal, representing BRAC, developed a blockchain and crypto strategy for the NGO, which serves over 100 million people annually. His project involved multiple blockchain experiments, potentially serving as a model for other social enterprises and the development sector. ^[5]

Naroa Zurutuza, from Giga, explored Ethereum-based solutions to help connect every school to the internet. She aimed to enhance the accountability of service providers, finance connectivity infrastructures, and provide access to the global economy and marketplaces through blockchain technology. ^[5]

Second Cohort

In the second cohort, EF Fellows were chosen based on their individual quests representing possibilities for Ethereum-enabled growth. ^[6]

Selection criteria were somewhat flexible. Some fellows aimed to broaden Ethereum's utility to new demographics, while others sought firsthand insights from communities where Ethereum might not yet have been applicable. Additionally, some fellows investigated broader challenges impacting the current Ethereum community or its future trajectory. ^[6]

Fellows included:

• Abhishek Bhattacharya, co-founder of Brú Finance, oversaw the transition of a harvest-time loan system from a permissioned private blockchain to a public chain, aiming to incorporate decentralized liquidity for farmers globally.

• Gabriela Guerra, founder of Bloinx, piloted blockchain-based tandas (informal savings circles) in Mexico and Venezuela, exploring blockchain's potential to benefit unbanked populations.

• Geoffrey See, co-founder of Poko, delved into the interaction between DAOs and governments, investigating how governments can understand and accommodate the unique needs of decentralized organizations.

• Karam Alhamad, founder of ZeFi, researched blockchain applications in conflict settings, seeking culturally-sensitive solutions to problems faced by Syrian communities.

• Marcus Alburez Myers, working with Lamina POP, explored real-world barriers to DeFi-based housing finance in Guatemala, aiming to develop solutions for marginalized communities.

• Mary Davies, a legal researcher, investigated trustless and decentralized mechanisms for transferring crypto assets after death, addressing legal complexities.

• Mihajlo Atanackovic, leading the digital transformation of the World Organization of the Scout Movement, explored integrating web3 technologies like DAOs into the global youth organization's operations.

Third Cohort

The third cohort of the Next Billion Fellowship at the Ethereum Foundation introduced five individuals who started their fellowship. These fellows offered unique perspectives on how Ethereum could empower individuals to shape collective futures. Through their stories, the Fellowship aimed to uncover the nuanced contexts in which the protocol was utilized for coordination. ^[7]

Brian Limiardi, co-founder of Copra Finance, researched the needs of workers and small businesses in Indonesia who use cryptocurrency for invoicing and bookkeeping to improve access to financial tools like loans. ^[7]

Devansh Mehta, co-founder of VoiceDeck, explored methodologies for documenting the impact of investigative journalism and other subjective public goods to find funding mechanisms valuing positive social outcomes. ^[7]

Masahiro “Masa” Fukuhara, from ONGAESHI DAO, investigated mechanisms for retroactive solidarity payments in education and employment to reward contributors to education initiatives when businesses hire their students. ^[7]

Mulenga Kapwepwe, co-founder of the Women’s History Museum of Zambia, collaborated with the Zambian web3 community to create a tokenized artifact registry, exploring museum revenue sharing for community documentation of African art and crafting methodologies. ^[7]

Valeriia “Ria” Panina, an advisor to Ukraine's Ministry of Digital Transformation, researched the adoption of cryptocurrencies and decentralized applications in Ukraine, aiming to map emergent use cases and behaviors during times of crisis. ^[7]

Fourth Cohort

Applications for the fourth cohort opened on June 2, 2023. From over 400 applications reviewed, 35 participants received a stipend. Additionally, 5 retroactive stipends were awarded to permissionless participants. During the 4-month period, fellows collaborated with 27 core developer mentors from various client and research teams within the ecosystem. Their progress was documented in nearly 600 weekly updates. ^[8]

Proposal to Slow ETH Issuance

In early 2024, Ethereum Foundation researchers Ansgar Dietrichs and Caspar Schwarz-Schilling proposed reducing the issuance rate of ether (ETH) to 0.4% annually, down from the current 1.5%. The aim was to decrease staking rewards, thereby preventing the over-dominance of liquid staking platforms like Lido and limiting inflation.

This proposal sparked debate within the Ethereum community. Critics argued that the existing staking rewards already provide sufficient security for the network and that reducing issuance could deter new stakers. Additionally, some community members expressed concerns about the perceived influence of the Ethereum Foundation on the network’s decentralized decision-making process.

Vitalik Buterin and other key figures defended the proposal, emphasizing the need for community consensus and the intention behind the proposal to invite discussion. The proposal highlighted ongoing tensions between the foundation’s leadership and the broader community over governance and the direction of Ethereum’s development. ^[11]

Justin Drake’s Advisory Role at EigenLayer

Justin Drake, a researcher affiliated with the Ethereum Foundation, has assumed an advisory position at EigenLayer, a restaking protocol overseen by the EigenFoundation, an independent non-profit entity. Drake detailed his involvement and motivations in a comprehensive post on a social media platform dated May 19.

Drake cited his interest in addressing missed opportunities within the liquid staking sector as a primary motivation for joining EigenLayer. His decision to accept the advisory role follows extensive consultations spanning more than a year, focusing on identifying and mitigating risks associated with restaking.

As an advisor, Drake intends to conduct a critical assessment of EigenLayer, emphasizing constructive criticism aimed at enhancing the protocol’s resilience. He aims to mitigate risks such as potential challenges to solo validators and increased burdens on Ethereum’s consensus mechanisms.

Dismissal of Corruption Concerns

Drake addressed concerns regarding the potential for undue influence from EigenLayer on the Ethereum Foundation, emphasizing the foundation’s organizational structure of over 300 members. While acknowledging formal ties between three foundation members, including himself, and EigenLayer, Drake reaffirmed their integrity and adherence to ethical standards.

Financial Incentives and Ethical Commitment

Disclosing substantial financial incentives tied to his advisory role, Drake highlighted potential token allocations amounting to millions of dollars over a three-year period. However, he committed to reinvesting these proceeds into the Ethereum ecosystem, either through direct investments or contributions to charitable projects. Drake emphasized his readiness to resign from his advisory position if EigenLayer’s direction diverges from Ethereum’s strategic interests.

EigenLayer’s Impact

EigenLayer facilitates Ethereum holders’ ability to restake their tokens to secure external networks, contributing to its growth. DeFiLlama data indicates that the platform has attracted over $15 billion in total value locked (TVL) since its inception, highlighting its influence within the decentralized finance (DeFi) landscape. ^[14]

Conflict of Interest Policy Development

The Ethereum Foundation (EF) is developing a formal conflict of interest policy in response to community concerns about the involvement of two researchers with EigenLayer, a Layer 2 restaking protocol on Ethereum. This issue gained when crypto trader Jordan Fish, also known as Cobie, raised ethical questions about EF developers receiving substantial financial incentives from projects built on Ethereum, using EigenLayer as an example.

After Cobie’s comments, EF researchers Justin Drake and Dankrad Feist disclosed their advisory roles at EigenLayer, including significant token allocations. These disclosures intensified discussions about potential conflicts of interest and the need for greater transparency within the Ethereum ecosystem. EigenLayer, which allows users to “re-stake” liquid Ether from various staking tokens to secure third-party networks or validate services, has been criticized for potential centralization risks and the additional load on stakers.

In response to these concerns, EF Executive Director Aya Miyaguchi stressed the importance of maintaining credible neutrality and rebuilding community trust. She acknowledged that relying on culture and individual judgment alone has been insufficient and underscored the foundation’s accelerated efforts to formalize a conflict of interest policy.

Miyaguchi stated:

“It is clear that relying on culture and individual judgment has not been sufficient, and we have been working on a formal policy to address this problem for a while now. We will be accelerating this work and will share an update soon.”

Drake and Feist clarified that their advisory roles at EigenLayer are personal and do not represent the Ethereum Foundation. They have pledged to prioritize the interests of the Ethereum ecosystem, with Drake committing to reinvest or donate his proceeds to Ethereum-related projects and Feist emphasizing his focus on assessing risks and ensuring decentralization.

The Ethereum Foundation’s move to implement a formal conflict of interest policy is aimed at maintaining the network’s integrity and decentralization. This initiative seeks to address community concerns by establishing clear guidelines and policies to manage potential conflicts of interest, setting a precedent for transparency and accountability within the Ethereum ecosystem. ^[12][13]

SEC Investigates Ethereum Foundation

Recent reports indicate that the U.S. Securities and Exchange Commission (SEC) is investigating the Ethereum Foundation (EF), prompting discussions about Ether (ETH)’s regulatory classification.

• Investigation Details: The SEC’s examination involves potential subpoenas to EF affiliates, potentially influencing the approval process for Ether exchange-traded funds (ETFs).

• Regulatory Climate: Analysts are closely monitoring Chair Gary Gensler’s prior statements, which suggest a rigorous regulatory stance on cryptocurrencies such as Ether.

• Impact on ETF Approval: Concerns have arisen regarding the approval of Ether ETFs, with previous rejections lacking transparent explanations, according to Paul Grewal, Coinbase’s legal officer.

• Market Responses: SEC subpoenas are speculated to contribute to delays in approving cryptocurrency ETFs, including those for Ether. Bloomberg analysts have adjusted the likelihood of a spot Ether ETF approval down to 25% by May.

• Diverse Perspectives: Former CFTC Commissioner Brian Quintenz views the SEC’s recognition of Ether as a non-security differently from Charles Hoskinson’s views on potential regulatory adjustments due to Ethereum’s transition to proof-of-stake.

• Pending Resolutions: Despite ongoing discussions, the SEC has yet to clarify the status of spot Ether ETFs, with decisions potentially postponed until May or later. Major institutions like BlackRock and Fidelity are closely monitoring developments.

The SEC’s investigation into the Ethereum Foundation amid uncertainty over Ether’s regulatory status highlights the intricate regulatory challenges confronting cryptocurrencies. Investors and market participants are awaiting further regulatory clarity, which could impact investment strategies and the broader cryptocurrency market. ^[15]

Executive Board

• Aya Miyaguchi: Executive Director ^[9]
• Vitalik Buterin: Co-founder of Ethereum ^[10]
• Patrick Storchenegger: Board Member