A review of Ethereum Foundation’s public spending: $170 million in project funding has been issued, making it the bulk of the budget

Written by: Nancy, PANews

The transparency issue of the Ethereum Foundation (EF) has once again been brought to the fore. Recently, the Ethereum Foundation has caused a stir after selling a large amount of ETH.CommunityThe official responded that it was part of the financial management activities and revealed that the annual budget was about 100 million US dollars, mainly composed of grants and salaries. However, in recent years, the Ethereum Foundation has not disclosed the specific expenditure details of all expenses, and the opaque operation has causedCommunityThe crusade.

At the same time, Hudson Jameson, a former employee of the Ethereum Foundation, revealed the details of EF’s funding budget, saying that the funds are mainly used to support various projects and activities around the world, and mentioned that the foundation will issue a large number of grants every year, which accounts for a large part of the budget.

So far, more than 170 million US dollars have been allocated, which once accounted for 60% of the annual budget.

From the history of Ethereum Foundation's project funding, the earliest can be traced back to the DEVgrants program in April 2015, which was used to provide funding for Ethereum ecosystem projects. The program can provide each project with $1,000 to $10,000, but only donated about $2.565 million to 15 projects/individuals in the first phase, and there has been no update since then. Since March 2018, the Ethereum Foundation has launched multiple Ethereum Foundation Grants, donating more than $19 million to more than 70 projects.

ESP is currently the main funding program of the Ethereum Foundation. It was launched in 2019 and is a branch dedicated to providing financial donations and other non-financial support to the Ethereum ecosystem, focusing mainly on financial support. PANews compiled based on the announcement released by the ESP team. In the past five years, ESP has funded 917 projects with a total of more than 148 million US dollars, with an average subsidy of nearly 162,000 US dollars per project/community, and an annual donation of approximately 27.446 million US dollars.

In terms of funding intensity, ESP funding has basically shown an increasing trend year by year, especially in 2022 and 2023, when the most projects were funded. In 2023, 285 projects were provided with $61.091 million in funding, accounting for 60% of the annual budget. Each project received an average of $214,000, which is several times that of other quarters. In 2022, 220 projects were allocated $30.043 million, with an average grant of $137,000. In terms of project funding types, ESP prefers community and education, cryptography andZero knowledge proofFor example, last year the Ethereum Foundation donated 97 community and education projects and 87 cryptography andZero knowledge proofTrack projects, developer experience and tools, consensus layer, execution layer, protocol growth and support, and Layer2 are also the foundation's focus.

另外，以太坊基金会还推出了些其他拨款计划，例如「Next BillionFellowship」奖金计划可为申请人提供相关专家的指导、以太坊基金会和以太坊社区的资源、资金支持等；以太坊基金还参与了二次方募资平台 Gitcoin Grants 的赞助，根据 Gitcoin Grants 官网披露，自 2019 年推出以来，Gitcoin Grants 设立了 170 次二次方融资池，已向 3715 个项目捐赠了超 6000 万美元。从每年筹款金额来看，Gitcoin Grants 的筹款规模已较起步之初有着高速增长，2022 年筹集金额（2140 万美元）是 2019 年的 70 万美元的 30.5 倍。再例如，以太坊基金会在今年 6 月联手与多家 ZK 项目推出 90 万美元奖池，来进零知识证明技术的发展。

EF is embroiled in controversy again as concerns grow over sales methods and spending transparency

As a non-profit organization dedicated to the development of Ethereum, the world's second largest cryptocurrency by market value, the Ethereum Foundation has now been embroiled in various controversies, especially the frequent and large-scale sales of ETH.

In this regard, Mask Network founder Suji Yan provided an explanation, saying, "Some institutions (such as universities and charitable organizations) sell ETH immediately after receiving it, and often the price is not handled well. It is better to sell it at a better price. And some newly registered NGOs do not have the spare capacity to doexchangeOpening an account (non-profit account opening takes longer). In addition, there are some public policy, political science, international relations research and politically related institutions. Basically, mainstreamexchangeThe main reason is that such institutions often have former government officials working there, or their staff will become members of the new government, and PEPs are very deep-rooted and should not be made public.

In response to this statement, Aya Miyaguchi, executive director of the Ethereum Foundation, also revealed in the latest response that some recipients can only accept legal tender. And (the latest large transfer is) because the foundation has been told not to conduct any financial activities for a long time this year, the supervision is complicated, which makes it impossible to share plans in advance.

But Sundial Mirage co-founder SIGNAL believes that considering the value generated by the Ethereum Foundation, even with an annual operating budget of $100 million, this amount is far below the market average. For example, Netflix is a company with a market value of $295 billion, while Ethereum's market value is $332 billion, but Netflix only paid $80 million in compensation and $72 million in wages to two executives in 2024. In reality, the $100 million liquidity treatment will not have a significant impact on assets, but the treatment method may be (slightly and temporarily) affected.

“Currently, everyone has exaggerated the influence of the Ethereum Foundation and Vitalik Buterin. In fact, they are nothing more than tools to build roads according to the roadmap. Those who build cars are the builders of this beautiful era of ours,” said crypto KOL Chen Mo.

Liu Feng, former editor-in-chief of Chain News, also believes that a budget of $100 million a year is not crazy for an organization like the Ethereum Foundation. After all, this organization is large and has heavy responsibilities, not to mention that this organization has many people and is "bureaucratic" enough (this is not a derogatory term but a neutral fact). However, he also pointed out that the EF had previously published an annual report, which was a good attempt, but then it was abandoned. Since it is prone to attracting criticism, it should take the initiative to do better.

In fact, the Ethereum Foundation has released its 2021 financial report, showing that the payment fee reached 48 million US dollars that year. But according to crypto KOL Ignas, the Ethereum Foundation currently holds ETH worth 845 million US dollars, accounting for 0.25% of the total ETH supply. At the current annual expenditure rate of 100 million US dollars, EF can only maintain expenditures for eight years.

Suji Yan also believes that the lack of transparency in EF's spending is indeed a problem, but I'm afraid that many contents can only be audited and reviewed, and cannot be fully disclosed. If Zk can be combined to produce something verifiable, it will be the best of both worlds? Most government and public institutions in the United States can use FOIA (Freedom of Information Act) to request data, but it is uncertain whether the response will be ambiguous, and even the requester will be in trouble.

“It’s a big problem that no information is released until people protest. I don’t understand why it’s so difficult to publish a quarterly report with financial data and basic updates, such as expenses, expected sales, where the funds are used, team size and distribution, etc. The lack of transparency will only focus on these negative issues, instead of focusing on how EF spends a lot of money to promote the development of Ethereum.” Ethereum core developer Eric.eth express.

For example, after Polkadot announced its treasury financial report, although it caused dissatisfaction due to excessive expenditure and insufficient income, compared with Ethereum, Polkadot is at least worthy of praise for its transparency.

Zhu Su, founder of Three Arrows Capital, admitted that the problem with the Ethereum Foundation is not thatTokenThey sell before value is discovered. They are born dumpers. Their biggest problem is that they are currently unable to provide a coherent roadmap and effective leadership for the ecosystem.

"Today's Ethereum Foundation is becoming a burden for ETH. This organization with a strong ideological color has become a negative asset for Ethereum and its ecosystem." Web3 venture capitalist @LordWilliamUK said, and pointed out the six sins of the Ethereum Foundation, including the "congressionalization" of the foundation, which has led to it being hunted by various funds and interests, the vast majority of members who receive ETH subsidies are doing research on paper but ignoring innovative projects that apply for subsidies, the annual expenditure of 100 million US dollars is not transparent, the Ethereum circle does not talk about application scenarios but talks about "orthodoxy", the foundation does not serve high-quality potential projects well, and iteration is slow.

The article comes from the Internet:Ethereum Foundation's public expenditures: $170 million in project funding has been issuedXiaobai NavigationBecoming the “big head” of the budget

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