Rethinking the Ethereum Foundation: Aave’s Zeller Advocates for Dissolution

Key Points

• Ethereum Foundation faces backlash for selling 35k ETH on Kraken, accused of lacking transparency.
• Aya Miyaguchi, Executive Director of the Ethereum Foundation, defends the action as part of treasury activities.

The Ethereum Foundation is under fire from the crypto community after it sold 35k ETH on Kraken. The timing of the sell-off, which coincided with a Friday price bounce, has raised eyebrows among community members.

Questions Over Transparency

Critics, including Anti Prosynth, an anonymous Ethereum core developer, have questioned the lack of prior disclosure about the Foundation’s fund movements. Eric Conner, another ETH core dev, echoed these sentiments, expressing frustration over the Foundation’s perceived lack of transparency.

Ethereum Foundation’s Defense

However, the Ethereum Foundation has defended its actions. Aya Miyaguchi, its Executive Director, explained that the sell-off was part of the organization’s treasury activities. She stated that the Foundation has an annual budget of approximately $100 million, which is primarily comprised of grants and salaries. Some recipients, she noted, can only accept payments in fiat.

Miyaguchi also highlighted the regulatory challenges they faced in 2024, which prevented them from sharing planned fund movements in advance. During this period, the Foundation was under investigation by the U.S. SEC following the network’s transition to Proof of Stake. The SEC was attempting to determine whether ETH was a security, but it eventually dropped the investigations and approved U.S. spot ETH ETFs in Q2.

Despite Miyaguchi’s explanations, some, like Marc Zeller, Founder of Aave, were not satisfied. Zeller suggested that the Ethereum Foundation’s annual budget was excessive, especially considering that some teams, like Geth, receive relatively low pay. He proposed that the Foundation should be dissolved after the upcoming upgrades.

According to data from Arkham, the recent sell-off has decreased the Foundation’s ETH holdings to 273k coins, which are currently valued at nearly $800 million.