Ethereum Foundation Under Microscope: $100 Million Budget Raises Questions
TLDR
Ethereum Foundation Annual Budget 2018 Increased from $41 million in 2021 to $100 million in 2024 Vitalik Buterin revealed his annual salary of ~$140,000 from the Ethereum Foundation Concerned about the perceived lack of support for DeFi from Vitalik and his foundation
The Ethereum Foundation, which supports the development of the Ethereum blockchain, is facing intense scrutiny from the cryptocurrency community over its budgeting and disbursement practices.
Recent statements and actions by the foundation have sparked debate about transparency and resource allocation in the Ethereum ecosystem.
Ethereum founder Vitalik Buterin revealed that he receives an annual salary of approximately $140,000 from the Ethereum Foundation.
182,000 SGD per year
— vitalik.eth (@VitalikButerin) August 27, 2024
The announcement comes as the company prepares to release a new expense report amid growing public interest in its financial activities.
The foundation's annual budget has increased from $41 million in 2021 to $100 million in 2024. Aya Miyaguchi, executive director of the Ethereum Foundation, said this budget is “mostly made up of grants and salaries.”
The foundation's exchange of $94 million worth of ETH to the Kraken cryptocurrency has recently raised questions in the community. Miyaguchi explained that this is part of the organization's treasury management activities, and pointed out that some grant recipients only receive payments in fiat currency.
Josh Stark, who works for the Ethereum Foundation, addressed some of the community's concerns on social media.
In the year In 2023, the foundation provided a preview of the distribution of expenses, which showed that “new institutions” – organizations or entities that support the Ethereum ecosystem – will account for the largest category of expenses, at 36.5%. Layer-1 research and development followed at 24.9% and community development at 12.7% of the budget.
Updates from @0xstark at EF expense.
The main information is on this chart.
The “new institutions” category basically means @NomicFoundation, @TheDRC_, @l2beat, @0xPARC etc – no World Economic Forum insect protein research here!
More information is published and published; See the thread. pic.twitter.com/FY2EPT7Wiz
— vitalik.eth (@VitalikButerin) August 27, 2024
The foundation's spending strategies and decision-making processes have come under scrutiny. Some members of the community questioned the timing of the ETH sale, as large transfers to the exchange often coincide with price rallies. Critics argue that this may affect the performance of the ETH market.
The Ethereum community is discussing the foundation and Vitalik Buterin's position on decentralized finance (DeFi). Some developers and users have expressed concern about the lack of support for DeFi projects from the foundation and Buterin himself.
In response, Buterin explained his position by saying that he supports sustainable and principled applications in the ecosystem.
The Ethereum Foundation has committed to releasing a comprehensive spending report covering 2022 and 2023 in the coming months.
This report is expected to provide more detailed information on the organization's financial activities and resource allocation.
