Bitrabo Editorial
The founder of the Aave Chan Initiative (ACI), Marc Zeller, has appealed for the dissolution of the Ethereum Foundation after rumors surfaced suggesting that the Foundation was suppressing ETH prices.
Ethereum Foundation’s Future Questioned Post Purge and Verge Upgrades
In a recent X post, Zeller proposed that the Ethereum Foundation should be defunded and dissolved following the completion of the Purge and Verge upgrades. He criticized the Foundation’s substantial annual budget of $100 million, raising concerns about the necessity of such a large sum of money. Zeller highlighted the underpaid Geth team’s essential role in the Ethereum ecosystem despite their minimal compensation.
Zeller’s remarks were triggered by an X post from Aya Miyagotchi, the Executive Director of the Ethereum Foundation, explaining their recent deposit of 35,000 ETH ($94.07 million) on Kraken for treasury management purposes. Miyagotchi disclosed that a significant portion of the Foundation’s $100 million annual budget is allocated to grants and salaries. She mentioned the necessity of selling Ethereum holdings to accommodate recipients who can only accept fiat currency, citing regulatory challenges that had previously hindered such transactions.
The Foundation’s Previous Regulatory Hurdles and Assurance for Controlled Sales
Miyagotchi alluded to past regulatory setbacks, particularly the US Securities and Exchange Commission’s (SEC) investigation into Ethereum’s security status, which was eventually resolved. Concerns arose within the community following the Foundation’s substantial ETH deposit on Kraken, fearing a potential market downturn due to a massive sell-off. However, Miyagotchi reassured stakeholders that any sales would be methodical and planned, emphasizing gradual divestment.
Questioning the Foundation’s Long-Term Viability
According to crypto analyst Ignas, the Ethereum Foundation’s current spending trajectory could deplete its ETH reserves within eight years at a $100 million annual budget. Data from Arkham Intelligence indicated that the Foundation holds 273,776 ETH ($748.88 million). Ignas suggested that a rise in ETH price or exploring staking opportunities could sustain the Foundation’s operations in the long term.
Additionally, Ignas highlighted the Foundation’s significant grant expenditures, with the 2021 financial report indicating that only 10% of the budget is allocated towards salaries and operational costs. Zeller proposed the cessation of all grants to ensure fiscal sustainability for the Ethereum Foundation.