The Ethereum Foundation has no dreams

Author: Jack, BlockBeats

In the past few days, the reversal news regarding Ethereum ETFs seems to have completely changed the market's judgment on its fundamentals, with analysts who previously sang its demise making a 180-degree turn in attitude within a day. With the official approval of the ETF, ETH nearly broke the $4000 mark this morning, but behind the price surge, the Ethereum Foundation has reached a crossroads.

Since last year's Black Mountain EDCON, dissatisfaction with the Ethereum Foundation has begun to manifest in the industry. This organization seems to have entered a mid-life crisis, struggling with issues of structure, efficiency, and culture, and its decline has become evident with the resurgence of Solana. As ETH officially becomes a global asset, the Ethereum Foundation appears to have become the biggest burden in this ecosystem.

Parasitic Ethereum

On May 21, prominent Ethereum Foundation (hereinafter referred to as EF) researchers Justin Drake and Dankrad Feist disclosed that they had previously become advisors to EigenLayer and would receive EIGEN tokens as compensation, "potentially exceeding their existing wealth." In the eyes of the community, this "wanting it all" behavior is quite unseemly, with some jokingly referring to EF researchers as "re-staking themselves."

This situation is no longer an isolated case; in today's Ethereum ecosystem, EF resembles a taker, using its "church" identity to export "ideological dollars" to the ecosystem, while EF members reap both fame and fortune in this environment.

EF "Congressionalization"

In the debate over "EigenLayer advisors," the most discussed issue is whether the involvement of EF researchers as project advisors would affect their neutrality.

Although both researchers claim they are participating in an advisory capacity as individuals and are "ready to end" their advisory roles if EigenLayer goes against Ethereum's interests, it is clear that the community is not convinced. With potential earnings "possibly exceeding their existing wealth," it is difficult for anyone to guarantee that they regard money as worthless.

The day before disclosing their advisor status with Eigen, Dankrad Feist was still engaged in a heated debate with other researchers on the topic of MEV, ultimately forcing Vitalik to step in as a mediator. As the proponent of Danksharding and a "guiding figure" for Ethereum, Dankrad clearly holds significant sway within EF. From another perspective, EigenLayer appears to have effectively bought a lobbyist within EF.

Today's EF resembles Ethereum's "Congress," where the EIPs written by researchers can directly alter the direction and landscape of Ethereum, impacting ecosystems worth hundreds of millions of dollars. As the number and scale of ecosystem participants continue to grow, EIPs involve an increasing number of interests. Every participant hopes to receive "special treatment" in upgrades like L2s, but it is impossible for everyone to align with Ethereum's interests, leading EF researchers to become the "members" that capital must court.

In reality, whether departing or still employed, EF researchers serving as advisors or participating in projects in their personal capacity has become an open secret in the industry. For projects, to gain ecological legitimacy, they must strive to maintain good relations with EF in various ways. If there is someone close to EF, it makes things much easier both on and off stage. For VCs, maintaining good relations with EF is a convenient channel for early access to quality investment targets. Projects recommended by EF researchers not only find it easier to secure shares but also gain an extra layer of legitimacy.

Whether they like it or not, EF researchers are inevitably surrounded by various capital hunting for opportunities, either offering advisory positions or directly sponsoring the researchers' personal studies. The researchers themselves seem to have no aversion to this. Against the backdrop of increasingly evident modular trends like EigenDA and Celestia, this situation may manifest in even faster and more obvious ways, with more teams having their own lobbying teams within EF, while EF itself will embark on a path of "Congressionalization" due to the disentanglement of various interests.

Psychological Victory

After the FTX collapse, Anatoly, as CEO of Solana Labs, personally reached out to developing ecosystem projects like Backpack, Jito, and Tensor. These projects lost considerable runway during the FTX incident, and Anatoly encouraged these teams to accelerate development, with Labs and the foundation providing as much technical support as possible.

In the Solana ecosystem, it seems that Solana Labs and the foundation are hands-on with many matters, and numerous ecosystem narratives rely on the team's push. Anatoly frequently appears on social media or podcast shows, even personally promoting ecosystem developer projects and meme coins, while the foundation led by Lily Liu connects various projects within the ecosystem. The entire ecosystem is tightly linked around the foundation, giving a strong impression of "unity" to the outside world.

However, this is no longer possible for Ethereum today. Unlike most public chains, Ethereum does not have "Ethereum Labs," making EF the sole entity wielding significant power over the ecosystem. Yet, as a "neutral organization," it is difficult for EF to personally intervene in many matters within the ecosystem, leading to a more "hands-off" image and making EF appear powerless in competition with the Solana team.

Compared to the Solana team, EF seems reluctant to get its hands dirty. After Uniswap, EF transformed into an academic institution that merely discusses ideas, with over 300 members receiving ETH stipends, the vast majority of whom conduct research on paper. Therefore, apart from EIPs, EF cannot provide much more value to Ethereum; on the contrary, its existence has imposed numerous ideological constraints on Ethereum's ecological development.

In the past year, the Ethereum circle has not discussed innovation or application scenarios but has instead focused heavily on "legitimacy." This concept, proposed by Vitalik in 2021, is more related to public goods but, in the eyes of most, refers to a close relationship with the foundation. Essentially, this is not a misunderstanding. EF has absolute interpretative power over the concept of "legitimacy," including what constitutes good public goods.

Today, large projects on Ethereum have almost all undergone this legitimacy scrutiny. A small team without background strength must first pass the ideological test to grow and thrive; innovation is not the primary task; singing the praises of the main theme is key. Thus, whether it is account abstraction or any other concept, the industry has essentially followed EF's lead over the past year, with project teams doing the dirty work while VCs pay for dreams, and both sides compete to elevate EF, driving the ecosystem forward, while EF researchers chat about longevity with Vitalik by the seaside in Zuzalu.

Cultural Poisoning

A few days ago, EF researchers engaged in a heated argument on social media over the MEV topic, prompting Vitalik to step in and express his pride in the open and free culture of the Ethereum ecosystem, stating, "Ethereum has no culture that tries to prevent people from expressing their thoughts, even if they have very negative feelings about the main things in the protocol or ecosystem."

In the Ethereum community, you can indeed express differing opinions, but interestingly, these opinions often center around purely technical discussions. You rarely see EF researchers engage in heated debates about Ethereum's direction, governance, or culture. Today's Ethereum world seems to lack many things; its culture appears poisoned, almost losing its critical thinking ability on certain issues.

Vitalik Becomes Hard Currency

At last year's EDCON, the "DeBox incident" was one of the most talked-about topics. After team members took a photo with Vitalik in Zuzalu, the project immediately garnered significant attention, prompting many Chinese teams to follow suit and chase after Vitalik in Black Mountain. Throughout EDCON, thousands of people crowded into a small campus, and upon discovering that Vitalik was hiding in a seaside villa, they rushed to Zuzalu to catch a glimpse of a few familiar faces in the core circle, snapping a distant photo of Vitalik and then returning to write about the "spiritual baptism of Zuzalu's fleeting city."

In the eyes of the market, Vitalik is legitimacy; as long as something is associated with Vitalik, the market recognizes it. This recognition extends to all aspects of the ecosystem. After Black Mountain, discussions about "legitimacy" have fermented in the Chinese community, with everyone realizing their desperate desire for mainstream Ethereum's attention, yet this core circle feels so distant, making it impossible to squeeze in.

As the embodiment of legitimacy in the Ethereum ecosystem, EF maintains its authority and recognition by closely following Vitalik's lead. Over the past year, Vitalik's articles have remained the most discussed content within EF and the Ethereum community, with few dissenting voices emerging from internal communities or the "mouthpiece" Bankless. Some who have had in-depth exchanges with EF members even report that most around Vitalik are sycophants, making it difficult for him to hear the community's true thoughts; of course, the veracity of this claim remains to be confirmed.

The most classic case is Scroll, which, during the heyday of L2 narratives, quickly rose from an inconspicuous "Chinese underdog" to a mainstream L2 worth a billion dollars, competing with Starknet and zkSync, primarily due to an email from the founder to EF that received a reply from Vitalik. The product aspect is similar; despite securing substantial funding from Multicoin and a16z, Farcaster remained a niche product until Vitalik joined. Now, it is increasingly rare to see EF researchers frequently updating their social dynamics on X.

The market needs Vitalik's attention, and EF needs the market's lifeblood, so EF surrounds Vitalik, making the market revolve around itself. Ultimately, Vitalik has become Ethereum's "hard currency."

Engineer Logic Thinking Demand

In the past two years, the engineer mindset within the Ethereum community has further solidified. This mindset differs from Google's engineer culture; it does not discuss new experimental standards or application scenarios but focuses purely on technical research. Within EF, there are over a hundred people solely researching ZK technology. From EDCON and ETHCC to Devcon, attendees are all about ZK this and ZK that, leaving non-technical outsiders bewildered.

Excellent product managers know to consider needs from the user's perspective, but clearly, EF does not think this way. According to EF's definition, Ethereum must become a neutral and trustworthy world computer. To achieve this goal, it only needs to consider decentralization, security, and scalability; any topics not closely related to these three metrics, such as potential business and application scenarios, are deemed valueless.

This value system directly impacts the product logic within the ecosystem, with L2 being the most obvious example. From Optimism to Arbitrum to Starknet, all discussions focus on technical superiority: why ZK is stronger than OP; how their TPS compares to others; how their gas fees are lower than others; and how different types of ZK Rollups achieve EVM compatibility, etc. However, looking back at today's L2 market performance, you will find that these "code arts," which have developers so excited, are utterly powerless in the face of real market demand.

The only L2 that insists on a product-oriented approach is now seen by users as the "blue Solana," becoming the strongest player in the ecosystem. In contrast, several mainstream L2s that were entangled in discussions about which ZK technology was superior at various conferences last year are now virtually ignored, with some potentially facing stagnation due to technical bottlenecks.

On the other hand, under the influence of EF and its "legitimacy" main theme, Ethereum has begun to adopt a public goods orientation, with ecological culture and innovation drifting further apart, repeatedly playing out the "clearing the inner circle" drama.

As a solution to enhance Ethereum's scalability, L2 has been shackled with "Ethereum alignment" from day one, accepting and executing EF's directives. Everyone is pledging loyalty to Ethereum, aiming to become the most EVM-compatible L2 and the prince of Ethereum's scalability. This has led to a situation where, for a long time, later teams always have to "lick" more than their predecessors, and EF is certainly pleased with this; whoever licks the hardest rises to power.

This situation is not limited to the L2 field; Ethereum's redundant infrastructure results in a high overlap of innovation within the ecosystem. A recent example is EigenLayer, a new concept that directly competes with LSD, L2, and even Ethereum itself. Nevertheless, EigenLayer still needs to align its values with EF to show loyalty, but as mentioned earlier, clearing the inner circle does not necessarily indicate loyalty.

With the rise of modular narratives like Celestia and Solana's strong return, EF's obsession with legitimacy has shown no signs of waning. You can still frequently hear discussions like "L2s that do not use Ethereum DA are not Ethereum L2s" or "Solana's single-layer scalability will never match L2s," but no one discusses what new application scenarios Ethereum could have.

Escaping Ethereum

Even in the face of decline, EF has not handled things very gracefully. In September last year, Maker DAO announced its "Endgame" plan, proposing to build a new chain using the Solana codebase to provide beneficial momentum for "the network effects of the entire multi-chain economy." Subsequently, Vitalik immediately sold 500 MKR and stated on social media that Maker's move was "suicidal behavior."

Many large protocols face moral judgment from Vitalik or EF when "escaping" Ethereum. Perhaps they hope the protocol can stick with them until the end, but development teams clearly do not wish to die alongside Ethereum. Applications always serve users, not blockchains. Although security is an important criterion for many blue-chip protocols during deployment, completely ignoring user environments and markets is equally foolish.

Thus, Ethereum's protocols are fleeing to Solana. Render migrated its token to the SPL standard last year; Aave decided to deploy its V3 isolated market version on Neon EVM with an 83% approval rate at the beginning of this year; the GMX community also released a proposal to deploy an independent contract on Solana; and there are market rumors that Ethena and Pendle will soon deploy to the Solana ecosystem.

In the face of life and death, legitimacy is insignificant. Clear-headed developers have long acknowledged that the future of on-chain finance will not have an absolute center. Whether it is Ethereum, Solana, or other settlement networks, maintaining market share and surviving is the most crucial thing, and in this regard, EF cannot help.

The Burden of ETH

In the process of mainstreaming cryptocurrencies, teams seem inevitably compelled to compromise with the old order. The Ripple team has been embroiled in a lawsuit with the SEC over securities issues for years; Tornado Cash and Uniswap have faced regulatory crackdowns; even this ETF application required asset management giants to engage in complex legal games over "ETH" and "staked ETH."

In contrast, Ethereum and EF seem to have easily escaped regulatory scrutiny, and the SEC's investigation into EF, which began two years ago, has not affected the smooth approval of the ETF. If it were Ripple, this would have been impossible. Does this mean EF has moved out of the danger zone? I do not think so.

Setting aside regulatory factors, today's EF is becoming a burden for ETH as an asset. This organization, imbued with strong ideological colors, has become a negative asset for Ethereum and its ecosystem. With the ETF's approval, ETH enters the realm of mainstream assets. When investors consider ETH, their comparison points are gold, silver, and Bitcoin. It is essential to clarify whether future financial world investors will value the worth of Ethereum network blocks or the ideological value of EF.

Ten years have passed, and Ethereum is no longer in its startup phase. EF indeed does not need to struggle like the Solana Foundation, but that does not mean an organization can sit back and enjoy the fruits of others' labor. Looking back at the history of the internet and global enterprises, countless business empires have perished due to stubbornness or a lack of foresight. Like the internet world, the war in the crypto market never ends, and this is equally true for Ethereum.

For ETH, its future value entirely depends on the scarcity of Ethereum blocks. This scarcity will not come from EF's lofty idealism but from the real demand for Ethereum block settlements in the world. These demands often carry various different ideologies; ETH can only absorb all potential demands if it remains ideologically neutral, like water.

Without value, all idealism is empty talk. Today's EF, in relation to the Ethereum ecosystem, is like a driver with an old ox pulling the cart, but as a part of the Ethereum world, EF's mission should no longer be to control Ethereum's thoughts and soul but to ensure the value of Ethereum blocks, just like all other participants in the ecosystem.

"If leaving Ethereum means you cannot survive, then you should be a good old ox; if leaving Ethereum means you can live better, then you should step aside." Perhaps EF should consider this question.