On June 2, the Ethereum Foundation (EF) announced a change in the operation of its internal protocol research and development team, renaming the original R&D team “Protocol” and stating that “some members of PR&D will no longer continue to work at the Ethereum Foundation” – the Ethereum Foundation has begun layoffs.

According to the announcement details released by EF, the goal of this restructuring is to make the team more focused and efficient. In addition, the announcement mentioned that although some employees were laid off, the foundation encourages them to continue contributing to the Ethereum ecosystem.

How did it come to layoffs?

The foundation’s constant manipulation has caused dissatisfaction within the community.

The layoffs at the Ethereum Foundation might not come as a surprise to anyone.

As early as March, the Ethereum Foundation underwent a “leadership change.” The controversial Executive Director of the Ethereum Foundation, Aya Miyaguchi, after serving for 7 years, was promoted to Chair of the EF Foundation, moving from a position of power to the role of “image representative” for the foundation.

The leadership change at EF also sparked market discussions at the time: the market generally believed that Aya’s departure from power was the first step for EF to move from virtual to practical. (See the article by Shenchao TechFlow for details:Where will the Ethereum Foundation go after the power transition?)

Over the past year, the market’s dissatisfaction with EF has been building up for a long time. In addition to the continuous selling of $ETH, various operations by the foundation have repeatedly become the focus of the market.

After the Cancun upgrade in March 2024, the transaction fees for Layer 2 have been significantly reduced. Technically, this is an absolute good thing, but data from Token Terminal shows that shortly after the Cancun upgrade, the revenue of the Ethereum Layer 1 network dropped by 99% in the summer of 2024. The Ethereum network, which has not balanced technical advancements with the economic health of the ecosystem, has greatly disappointed investors and the community.

In May 2024, a major scandal broke out in the Ethereum Foundation, with multiple members of the Ethereum core team being found to have connections with the EigenLayer Foundation. Senior researchers at the Ethereum Foundation, Justin Drake and Dankrad Feist, both served as paid advisors at EigenLayer and received millions of dollars in token incentives. This collaboration, which has obvious conflicts of interest, has caused ongoing controversy within the community. It is difficult to predict the impact of introducing the EigenLayer proof-of-stake protocol into Ethereum under such relationships. Some community members lamented, “Foundation members have staked themselves again.” It wasn’t until November of the same year that Justin Drake and Dankrad Feist announced their resignation from their advisory roles at EigenLayer.

In August 2024, the issue of transparency in spending by the Ethereum Foundation once again became a focal point of public attention. On August 24, it was reported that the Ethereum Foundation transferred 35,000 $ETH (worth $94 million at the time) from its treasury to the Kraken exchange. Even though the then-executive director Aya clarified that the fund transfer was part of the foundation’s “fund management” normal activities and did not necessarily “equate to a sale,” the lack of notification and the “no comment” attitude still caused dissatisfaction among most people. Coupled with the foundation’s ongoing practice of publicly selling $ETH to cover its operational costs, it inevitably led to a significant drop in the market’s impression of the foundation.

Ethereum has become too detached from the masses.

In addition to various sell-offs, scandals, and the unsatisfactory operations due to lack of transparency, the direction of the Ethereum Foundation itself is also disappointing.

In this round, the price of $ETH has disappointed almost everyone. The slogan “BTC breaks 100,000, ETH breaks 8,000” embarrassingly only achieved half of its promise, which is closely related to the development direction of the Ethereum Foundation in recent years. The overly idealistic vision and style of the foundation’s senior management can support the realization of a small portion of people’s visions, but for the community and the market, such construction of castles in the air cannot be eaten.

X User Chen Jian Jason (@jason_chen998) mentioned in a tweet: “The early OGs of Ethereum reaped too many benefits, showing no signs of financial thirst at all. In fact, anyone who expresses a desire to make money would be rejected and looked down upon by others. This atmosphere, top-down, has made all the developers in the Ethereum ecosystem very ‘halal’. Yes, that word makes my head hurt every time I deal with those halal factions.”

The internal issues and ongoing external dissatisfaction have continued into this year, coupled with the fact that the rising prices of coins seem to be viewed unfavorably by the market in the long term, the Ethereum Foundation may finally be starting to feel anxious.

This round of layoffs may be a preliminary treatment for the Ethereum Foundation, which has been suffering from long-standing issues over the past few years.

Is the project party doing things?

A new strategy of abandoning the virtual and seeking the real

Returning to the Ethereum Foundation’s new resolution, the core logic of the entire plan is quite clear: less research, more delivery.

Not only cutting down personnel who have (possibly) engaged in theoretical research without practical results, but also increasing accountability mechanisms and making ecological development KPI-based. In the future, the main focus will be on the following.Three major strategic directions：

• Scaling Ethereum’s base layer: Improving the performance and throughput of the mainnet.
• Expanding Blobspace for Rollups: Increasing the data space required for Rollups to support the development of Layer 2 solutions.
• Improving user experience: Optimize the usability and accessibility of the Ethereum network.

Regardless of how the implementation progresses in the future, this strategy has finally been problem-oriented, and “pragmatic” has been concretely presented. (Editor’s note: Especially regarding the performance improvement of the Ethereum mainnet, the last time Binance Alpha launched $PFVS airdrop, the mainnet transaction fees soared to 70-80 dollars per transaction, which was indeed a bit embarrassing.)

V God starts buying coins, the foundation is looking for investors.

On June 4, Decrypt reported that Consensys CEO and Ethereum co-founder Joe Lubin revealed that the company is in talks with a sovereign wealth fund and bank from a “major country” about the possibility of building infrastructure in the Ethereum ecosystem.

On the same day, user X Yujin (@EmberCN) reported, Vitalik Buterin@VitalikButerinActively using 317,000 DAI +33,000 pieces$UNI Purchased 205.5 $ETH and transferred a total of 693.9 Ether ($1.83M) and 340,000 USDC using Railgun through address 0x1810.

In the face of the future, Ethereum still needs to solve more problems.

Whether it is the self-rescue of the foundation or the inevitable result of the Ethereum Foundation’s theoretical development, this reorganization reflects that pragmatism has become the foundation for various projects to move toward the future. Even a giant like Ethereum cannot escape the law that a castle in the air will eventually collapse, let alone major public chains and applications with insufficiently solid communities. The latest strategy clarifies the foundation’s own attitude and the overall direction of development, but whether it can be effectively implemented is still the most critical step.

At the same time, while focusing on pragmatism, the issue of finding a balance between transparent information disclosure, decentralized development concepts, and centralized management remains an unavoidable problem in the development of the Ethereum ecosystem.

To change the market’s attitude, in addition to pumping, Ethereum may also need to undergo profound “bone scraping therapy” time and time again.

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