Who manages Ethereum? The Galaxy report shows it all

Galaxy Digital has released a report showing that Ethereum's decentralization is driven by off-chain voting rather than on-chain Ether holder voting.

Kristen Kim, vice president of Galaxy Digital Research Group, released the report on June 3. It features multiple stakeholders who hold the keys to Ethereum governance.

According to the report, the groups collaborating on off-chain processes include client groups, validator node operators, the Ethereum Foundation (EF), and decentralized application (DApp) developers.

Cointelegraph contacted Galaxy Digital for comment but did not receive a response by press time.

Customer groups and authentication node operators

According to the report, customer groups are central to decision-making, ideation, discussion and implementation through Ethereum Improvement Proposals (EIPs).

“Customer teams build and maintain the software needed to operate and connect to the Ethereum network.”

Validator node operators are highlighted in the report as having the “agency to implement or reject code changes” made to the Ethereum network – essentially voting on which version of the software to run.

Although EF's direct influence has waned over time, it still supports “the first and most prominent development efforts” on Ethereum. […] non-profit organization”.

Related: Why Ethereum ETF Day One Income Won't Be Like Bitcoin – Fireblocks MD

DApp devs, forums and communities

Kim's report also revealed that DApp developers influence specific features and improvements based on user needs.

“DApp developers are the main users of Ethereum, connecting to the Ethereum codebase to deploy smart contract code.”

According to the report, off-chain good governance discussions will also be held in forums to facilitate the creation of a common understanding among the stakeholders.

“Government discussions occur in several forums: Ethereum All Core Developers (ACD) Calls, ETHMagicians, Ethresear.ch, Discord, and GitHub.”

Related: SEC Ethereum ETF Decision Will Be Politically Driven: Bernstein

On a chain or off a chain?

The report emphasizes the rationale behind on-chain voting, as large Ether (ETH) holders can wield significant influence.

“No decisions are voted by ETH holders on chain proposals or decentralized autonomous organizations (DAOs).”

An off-chain approach prevents centralization and keeps biased decisions, even if they are “difficult to audit and accurately evaluate.”

Magazine: Crypto voters are rocking the 2024 election — and it's set to continue.