Overview

The Ethereum Foundation (EF) is one of the most influential organizations in the crypto space. Established in July 2014 and headquartered in Switzerland, it was co-founded by Vitalik Buterin and Gavin Wood as a non-profit entity dedicated to advancing the Ethereum ecosystem.

Initially responsible for managing Ethereum’s early funding, the foundation has shifted its focus to supporting research and development, fostering global collaboration, distributing key resources, and promoting Ethereum’s vision. Its mission is to uphold Ethereum’s decentralization and drive its adoption worldwide.

Unlike traditional centralized organizations, the Ethereum Foundation does not directly control or dictate Ethereum’s development. Instead, it plays a supporting role by funding projects, driving technological innovation, and nurturing the community, ensuring the network remains open and decentralized.

Source: https://esp.ethereum.foundation/

Team Structure

1. Leadership Team

As of January 2025, the Ethereum Foundation (EF) is led by a three-member board: Ethereum co-founder Vitalik Buterin, Executive Director Aya Miyaguchi, and legal expert Patrick Storchenegger.

Source: https://ethereum.foundation/ef

In 2024, the Ethereum Foundation initiated a major leadership restructuring aimed at strengthening technical expertise, improving engagement with the Ethereum ecosystem, attracting top talent, increasing execution efficiency, and offering stronger support to application developers. Some of these changes have already been implemented, while others are still in progress.

One key point of interest is that Vitalik Buterin currently oversees EF’s new leadership team selection and will continue in this role until the board is fully restructured. Additionally, he revealed that EF has never staked its ETH holdings for yield due to regulatory and neutrality concerns. According to the latest CESR composite Ethereum staking rate, EF could have earned an annualized return of 2.91% from staking.

Source: https://indices.coindesk.com/indices/ether/cesr

On January 18, 2025, Buterin reaffirmed that EF’s leadership restructuring had been underway for nearly a year. He emphasized that EF will not push ideological agendas, lobby regulators or politicians, or evolve into a centralized entity driven by vested interests. The foundation remains committed to decentralization and welcomes others with different visions to establish their own organizations.

Source: https://x.com/VitalikButerin/status/1880635379771904423

2. Team Members

The Ethereum Foundation (EF) is composed of multiple specialized teams that focus on protocol research and development, security research, privacy protection, developer tools, ecosystem support, and community outreach.

• Technical Research and Development Teams (e.g., Consensus R&D, Application Research, Ipsilon, STEEL) focus on enhancing Ethereum’s security, scalability, and decentralization.
• Security & Privacy Teams (e.g., Protocol Security Research, PSE, Snake Charmers) work on improving Ethereum’s privacy and resistance to attacks.
• Developer Tools Teams (e.g., Remix, JavaScript, Geth) provide tools for smart contract and protocol development, improving the developer experience.
• Ecosystem Support & Community Teams (e.g., ESP, Ecodev, Devcon, Next Billion) drive global collaboration, educational programs, and funding initiatives.

Additionally, the Research on Incentive Mechanisms (RIG) ensures the sustainability of Ethereum’s economic model, while Portal and PandaOps manage network infrastructure. These teams collaborate to ensure Ethereum’s long-term growth.

Source: https://ethereum.foundation/report-2024.pdf

3. Conflict of Interest Policy

The Ethereum Foundation (EF) Conflict of Interest Policy states that EF members may invest in crypto assets, but investments exceeding $500,000 (excluding ETH) must be reported. High-risk investments may require recusal from related decisions. External work, angel investments, fund investments, and co-founding projects must be pre-disclosed and reviewed. Single angel investments cannot exceed $100,000, and the total annual limit is $400,000.

Members cannot receive non-market-priced assets (such as pre-issued tokens) from external work, except in special cases, where such arrangements are generally prohibited. The policy applies to Web3 and crypto-related matters, and EF members must update their conflict of interest disclosures annually. It covers full-time, part-time, and contract employees, but does not include interns, researchers, and certain advisors.

For example, in November 2024, Ethereum researchers Justin Drake and Dankrad Feist announced their resignations from advisory roles at the Ethereum restaking protocol EigenLayer. Previously, they had received significant Eigen token rewards, raising concerns about conflicts of interest.

Source: https://x.com/drakefjustin/status/1852734263541874824

Operational Model

Funding and Supporting Innovative Projects: The foundation provides funding, resources, and technical support to developers and teams working on innovative projects related to the Ethereum network. These efforts focus on open-source technologies, decentralized applications (dApps), and blockchain infrastructure.

Education and Community Building: The foundation actively promotes the global developer community by hosting hackathons, developer conferences, and technical workshops. It offers educational resources, technical documentation, and development tools, helping developers build decentralized applications more easily. The foundation also supports Ethereum developer communities worldwide, with a special emphasis on developing countries.

Collaboration and Cross-Industry Applications: The foundation enhances cooperation with governments, enterprises, academia, and other blockchain projects to promote Ethereum’s adoption in finance, healthcare, supply chain, and energy. It also facilitates cross-chain collaboration and advances blockchain technology’s adoption and innovation.

Legal and Compliance: The foundation closely monitors global legal and regulatory developments, especially cryptocurrency and blockchain regulations. It ensures that Ethereum evolves legally compliant and collaborates with policymakers and regulators to promote blockchain policy standardization.

Promoting Social Responsibility and Public Goods: The foundation supports public goods funding, particularly in open-source technology and privacy protection areas. It encourages open-source sharing and transparency within blockchain technology and backs socially impactful projects, including those focused on poverty alleviation, education, and environmental protection.

Source: https://blog.ethereum.org/2025/02/06/allocation-q4-24

Funding Sources

According to the 2024 Ethereum Foundation (EF) Report, as of October 31, 2024, EF held $970.2 million in assets, broken down as follows:

• Crypto assets (99.45% ETH): $788.7 million, accounting for 0.26% of Ethereum’s total supply (including 26,701 ETH reserved for client incentive programs).
• Non-crypto assets (cash, investments, etc.): $181.5 million

EF follows a conservative fund management strategy, selling ETH during bull markets to ensure future reserves and maintaining ecosystem funding during market downturns.

Source: https://ethereum.foundation/report-2024.pdf

As a non-profit organization, the Ethereum Foundation’s funding primarily comes from the following sources:

（1）Early Ethereum Holdings

The foundation initially raised funds through Ethereum’s ICO (Initial Coin Offering) in 2014, securing over $18 million, setting an early funding record in the crypto industry.

Source: https://icodrops.com/ethereum/

（2）Donations & Grants

Institutions, individuals, and companies can donate to the foundation to support Ethereum’s long-term development.

Some industry initiatives, such as Gitcoin Grants, provide specialized funding for public Ethereum projects.

（3）Foundation Investments

While EF is primarily a non-profit, it invests strategically in specific ecosystem projects, such as Layer 2 scaling solutions and Zero-Knowledge (ZK) technology.

These investments drive ecosystem growth and generate returns as the projects expand, providing EF with additional funding.

（4）External Partnerships & Research Grants

EF collaborates with universities, research institutions, and Web3 organizations to obtain research funding.

Some academic grants support research in areas like blockchain privacy technologies and security protocols.

Source: https://ethereum.foundation/report-2024.pdf

The following chart illustrates the total value of project treasuries, including available liquid funds and unallocated reserves. All non-EF data is sourced from Deep DAO (deepdao.io/organizations) as of October 17, 2024.

Most project treasuries are composed of native tokens, meaning their total value may be significantly higher than the immediately liquid assets convertible to fiat. If a project sells a large portion of its treasury holdings, it could significantly impact token prices.

Funding Expenditures

According to the 2024 Ethereum Foundation (EF) Report, from 2022 to 2023, various Ethereum ecosystem organizations collectively spent $497 million to support community projects. Among them, the Ethereum Foundation (EF) accounted for 48.3% of the total expenditures, amounting to $240.3 million.

EF’s total expenditure in 2022 was $105.4 million, which increased to $134.9 million in 2023, reflecting a 28% year-over-year growth. In 2023, the primary spending areas were:

• New Institutional Grants: 35.2% (~$47.4 million), supporting organizations such as Nomic Foundation, Decentralization Research Centre (DRC), L2Beat, and 0xPARC.
• Protocol Development (L1 & L2): 25.7% (~$36.6 million), funding both external client development teams and internal EF researchers.
• Community Development: 12.5% (~$16.9 million), covering global conferences, online courses, and innovation projects.
• Internal Operations: 7.7% (~$10.4 million), covering the day-to-day operational costs of EF teams.

Source: https://ethereum.foundation/report-2024.pdf

Ecosystem Support Program (ESP)

The Ecosystem Support Program (ESP) is a funding and support initiative established by the Ethereum Foundation. It aims to assist developers, researchers, community builders, and startup teams in advancing the Ethereum ecosystem. However, it does not directly serve end users.

• In 2021, ESP supported 136 projects with a total funding of $26.9 million.
• In 2022, ESP supported 397 projects with $30 million in funding.
• In 2023, ESP funded 498 projects with $61.1 million.

Each quarter, ESP funds projects worldwide, fostering blockchain and Ethereum ecosystem growth. For example, in Q3 2024, initiatives included:

• Africa Blockchain Research Institute hosted a summer bootcamp in Benin.
• Kerala Blockchain Academy organized a hackathon in India.
• Web3Clubs conducted a Solidity training camp in Kenya.
• SEED promoted Ethereum adoption in Argentina.
• Enterprise Ethereum Alliance explored enterprise applications in Thailand.
• ERC55 community meetup in Brazil discussed the latest technological advancements.

These programs have fostered learning and collaboration across global blockchain communities through training camps, workshops, and hackathons.

Source: https://esp.ethereum.foundation/

1. ESP’s Core Objectives

1. Support Ethereum Infrastructure Development: Funding for key technology development, such as Ethereum clients, Layer 2 solutions (Rollups), zero-knowledge proofs (ZK), and smart contract security.
2. Promote Research & Innovation: Supporting academic research in blockchain technology, economic models, and privacy-enhancing solutions.
3. Strengthen Developer Ecosystem: Providing technical documentation, development tools, and educational resources, as well as funding hackathons and tech conferences.
4. Expand Ethereum’s Global Influence: Encouraging Ethereum-based applications in finance, supply chain, healthcare, energy, and more.

2. ESP’s Funding Methods

ESP offers support through the following methods:

• Direct Grants: Financial support for eligible projects, with small grants reaching up to $30,000.
• Non-Financial Support: Includes technical mentorship, community promotion, and networking opportunities.
• CLR Fund (Quadratic Funding): Using a quadratic voting mechanism to incentivize decentralized community projects.

3. Grant Application Process

1. Submit an Application: Project teams apply on the ESP website, detailing their goals, team background, and funding needs.
2. Review & Evaluation: The Ethereum Foundation assesses the project’s technical feasibility and ecosystem impact.
3. Approval & Funding: Once approved, funds are distributed, and the project must submit regular progress reports.

ESP remains a critical initiative of the Ethereum Foundation, providing strong support to developers and researchers, fueling Ethereum’s continuous innovation and expansion.

Source: https://esp.ethereum.foundation/about

Factors Influencing Future Development

Several key factors will shape the future development of the Ethereum Foundation (EF):

1. Ethereum’s Technological Upgrades

Ethereum’s continued growth relies on technological innovations, particularly the advancement of Ethereum 2.0, including Danksharding, Proto-Danksharding (EIP-4844), and Verkle Trees. These upgrades will determine Ethereum’s scalability, transaction costs, and network security, directly impacting the foundation’s operations and resource allocation.

Ethereum 2.0’s technological advancements face multiple challenges, such as:

• The complex implementation of Danksharding
• Compatibility issues of Proto-Danksharding (EIP-4844) with the existing ecosystem
• Structural transformation in blockchain storage with Verkle Trees

Additionally, the full implementation of Proof-of-Stake (PoS) requires adjustments to Ethereum’s economic model and poses risks associated with the transition process. Ensuring stability, security, and ecosystem compatibility is a major challenge for the Ethereum Foundation.

At the same time, these upgrades present significant opportunities:

• Danksharding & EIP-4844 → Dramatically improve Ethereum’s scalability, lower gas fees, and enhance user experience.
• Verkle Trees → Improve storage efficiency and blockchain data management.
• PoS Mechanism → Enhance energy efficiency and network security.

These innovations will solidify Ethereum’s leading position in blockchain, attract more developers and users, and drive long-term growth in the Web3 ecosystem.

2. Cyclical Volatility of the Crypto Market

Since the Ethereum Foundation holds a large amount of ETH, the value of its assets is highly influenced by market fluctuations. ETH price volatility may impact funding reserves, the sustainability of grant programs, and support for the ecosystem.

3. Global Regulatory Environment

Regulatory policies on cryptocurrencies and blockchain continue to evolve worldwide. Key regulatory factors include:

• The stance of the U.S. SEC (whether ETH is classified as a security)
• EU’s MiCA regulations and their impact on decentralized protocols
• Asia’s Web3 policies (e.g., China, Hong Kong, Singapore)

Stricter regulations could limit fund flows, hinder ecosystem growth, or even affect the legality of DeFi and smart contracts.

4. Competition in the Web3 Ecosystem

Beyond Ethereum, other blockchains (e.g., Solana, Polygon, Optimism, Arbitrum, and ZKSync) are actively developing scalability solutions. The Ethereum Foundation must ensure that Ethereum remains competitive in technology, ecosystem support, and user experience to prevent developers and users from migrating to alternative blockchains.

5. The Evolution of Decentralized Governance

The Ethereum Foundation does not control Ethereum’s future—the community and core developers drive it. The rise of Decentralized Autonomous Organizations (DAOs) and governance models for EIP proposals could alter the foundation’s role in the ecosystem.

6. Institutional Adoption & Real-World Applications

Ethereum’s expansion into DeFi, NFTs, enterprise blockchain solutions (e.g., finance, supply chain), and RWA (Real-World Asset tokenization) will influence its long-term growth. The foundation must continue driving Ethereum’s real-world adoption to enhance the ecosystem’s value.

7. Layer 2 (L2) Growth & Gas Fee Optimization

The rapid rise of Layer 2 solutions (e.g., Arbitrum, Optimism, Base) has lowered transaction costs, but also introduced challenges:

• If L2 solutions become too independent, Ethereum’s L1 gas fee revenue may decline, affecting the foundation’s long-term funding sources.
• EF needs to balance L1 and L2 development while promoting Rollups’ synergy with Ethereum’s mainnet.

All in all, the Ethereum Foundation’s future depends on technological innovation, market conditions, regulatory policies, competitive landscape, and community governance. The foundation must remain adaptive and forward-thinking across multiple dimensions to navigate challenges and sustain Ethereum’s growth.

Source: https://l2fees.info

Differences Between a Foundation and a Corporation

The Ethereum Foundation (EF) focuses on advancing Ethereum’s technology and ecosystem, operating as a non-profit rather than a profit-driven entity. Decision-making is shared between community governance and management, without control from shareholders. In contrast, corporations operate to generate revenue, with shareholders and a board of directors overseeing decisions. Regarding funding sources, the Ethereum Foundation relies on ETH reserves, donations, and grant programs, while corporations generate revenue through product sales, investments, and fundraising.

Overall, the Ethereum Foundation functions more like an organization focused on technical research and ecosystem support, while a corporation is a market-driven business entity.

Future Outlook

The Ethereum Foundation’s (EF) future holds great potential, particularly in technological advancements, ecosystem development, and global applications. As blockchain technology matures and the Ethereum ecosystem expands, the Foundation will continue advancing its mission across multiple dimensions. The key areas of focus for EF’s future development are:

1. Further Development of Ethereum 2.0

Ethereum 2.0 is a major milestone for the Ethereum Foundation. It aims to enhance scalability, security, and sustainability through Proof of Stake (PoS), sharding, and rollup-based scaling solutions.

In the future, the focus will be on optimizing transaction speed and costs, enhancing support for decentralized applications (dApps) and enterprise use cases, and fully implementing sharding technology. This could allow Ethereum to process thousands of transactions per second, meeting the growing demand for higher concurrency.

However, Ethereum’s development strategy no longer depends on “execution sharding”, as rollups have taken over as the primary scaling method. The original 64-shard chain model has been replaced by 64 rollups + Danksharding, making execution sharding unnecessary.

That said, data availability sharding remains crucial and a core component of Ethereum’s roadmap. Chain abstraction may further optimize the rollup ecosystem, but it will not replace rollups as the dominant scaling approach.

In summary, execution sharding has been replaced by rollups, but sharding technology itself still plays a key role in Ethereum’s scalability, particularly in the data availability layer. In the future, the Ethereum ecosystem may evolve into a network of interoperable rollups rather than a single-chain structure.

Source: https://ethereum.org/en/roadmap/

2. Expansion of Decentralized Finance (DeFi) and Web3 Applications

Ethereum has become the core infrastructure for decentralized finance (DeFi), and the Ethereum Foundation will continue fostering its development by supporting innovative applications. The rise of Web3 empowers users with greater control over their data and enhanced privacy, aligning with Ethereum’s decentralization values.

Looking ahead, EF will:

• Fund and support innovative projects to drive the adoption of DeFi and Web3 applications in finance, insurance, supply chain, and other industries.
• Strengthen Ethereum’s decentralized infrastructure position by encouraging cross-chain protocols and blockchain integration into financial services.
• Expand collaborations with traditional financial institutions, broadening Ethereum’s market reach and applications.

3. Ecosystem Diversification and Global Collaboration

Beyond technology development, the Ethereum Foundation aims to build a diverse and global Ethereum ecosystem. Moving forward, EF will:

• Promote collaborations with governments, enterprises, academic institutions, and global developer communities to broaden Ethereum’s real-world applications.
• Strengthen cross-chain interoperability, facilitating seamless integration with other blockchain platforms.
• Expand Ethereum’s adoption in finance, healthcare, supply chain management, energy, and art industries, ensuring practical use cases across different sectors.

4. Education and Developer Support

To promote the widespread adoption of the Ethereum platform, the Ethereum Foundation (EF) will continue to strengthen global educational resources, helping more developers, researchers, and businesses understand and utilize Ethereum technology. The Foundation provides opportunities for developers worldwide to showcase their talents and exchange knowledge by organizing hackathons, developer conferences, and technical workshops.

In the future, the Foundation will:

• Increase support for developer communities, offering more educational resources, technical documentation, and tools.
• Make it easier for developers to build decentralized applications (dApps).
• Expand global developer outreach, particularly in developing countries and underserved regions.
• Help local developers master blockchain technology and create a diverse ecosystem of decentralized applications.

5. Public Goods Funding and Social Responsibility

The Ethereum Foundation strongly emphasizes funding public goods, particularly in areas such as open-source technology, anti-censorship solutions, and privacy protection. The Foundation will continue to support technologies that drive the growth of the blockchain industry, ensuring that Ethereum’s technological innovations benefit the entire industry and society.

Looking ahead, the Foundation will:

• Expand global funding for public goods projects to promote open-source blockchain development.
• Enhance accessibility and transparency of blockchain technology.
• Support blockchain projects with social value, encouraging Ethereum’s adoption in poverty alleviation, education, and environmental protection.

6. Legal and Regulatory Compliance

As blockchain technology evolves, the global legal and regulatory landscape shifts. The Ethereum Foundation will closely monitor regulatory developments worldwide and engage with governments and regulatory bodies to ensure the legal and compliant operation of the Ethereum network.

In the future, the Foundation will:

• Help Ethereum adapt to regional legal requirements, ensuring its legitimate and compliant operation.
• Assist developers and users in mitigating legal risks.
• Collaborate with policymakers to shape blockchain regulations and standards, ensuring decentralized networks receive global recognition and support.

Controversies and Challenges

As the Ethereum Foundation (EF) drives the development of Ethereum and its ecosystem, it faces various controversies and challenges. These challenges stem from external factors as well as the foundation’s governance and operational model.

1. The Conflict Between Decentralization and Centralization

Despite EF’s commitment to decentralization, its management and funding sources remain relatively centralized. The foundation held a significant amount of ETH in its early days, and decision-making is largely led by its core team and management, causing some community members to question its decentralization principles.

Some argue that the foundation’s existence contradicts Ethereum’s decentralization ethos, especially regarding governance and resource allocation, which might pose risks of over-centralization.

For example, in the 2016 DAO hard fork, EF played a pivotal role in deciding the fork, coordinating core developers, and allocating funds to reverse the 3.6 million ETH stolen in the hack. While this swift action protected user assets, it sparked division within the community, as some opposed the intervention. This led to the creation of Ethereum Classic (ETC) by those who rejected the fork, highlighting the contradiction between EF’s centralized authority in crisis management and the decentralization ideology of Ethereum.

Source: https://x.com/BoringSleuth/status/1892034349266063718

2. Transparency and Fund Management Issues

The Ethereum Foundation’s funding is critical to its operations. While it receives donations, grants, and holds ETH, ensuring transparent and efficient fund usage remains challenging.

Some community members raise concerns about financial transparency, particularly regarding fund allocation and spending decisions.

• Unclear fund usage: Critics question whether EF has fully disclosed how funds are distributed, especially for long-term grants and project funding, and whether these allocations undergo adequate public audits.
• For instance, in 2024, EF transferred 35,000 ETH ($94 million) to Kraken, sparking controversy over the lack of transparency in its financial operations.

Source: https://x.com/econoar/status/1827351104348418138

3. Disagreements on Technical Development

Ethereum is undergoing continuous evolution, particularly during its transition from Ethereum 1.0 to Ethereum 2.0. EF must balance different perspectives within the developer community.

For example:

• The implementation of Proof-of-Stake (PoS) and sharding has faced technical and community disagreements.
• Some members feel that Ethereum 2.0 is progressing too slowly, as multiple delays have caused growing frustration among stakeholders.
• Additionally, some developers believe that EF’s resource allocation is overly concentrated on internal teams, limiting broader innovation and participation from independent developers.

For instance:

• Ethereum 2.0 upgrades were delayed multiple times—PoS was originally scheduled for 2019 but was only implemented in 2022.
• EIP-1559 was implemented despite opposition from miners.
• The scalability roadmap remains divided between Rollups and Sharding, with some arguing that EF prioritizes Layer 2 (L2) over native Layer 1 (L1) expansion.

Source: https://x.com/Leerzeit/status/1478684963025428481

4. Relationship Between EF, Developers, and the Community

EF relies on community support, but balancing different interests in funding, technical assistance, and governance remains a major challenge.

• Developer Incentives: EF needs to ensure fair compensation and sustained engagement from global developers.
• Some developers argue that EF’s grants favor specific teams, overlooking emerging projects with high potential.
• While Ethereum promotes decentralized governance, EF’s dominant role raises concerns about whether the “community-driven” approach is genuinely implemented.

For example:

• In January 2025, EF announced a 50,000 ETH grant to support decentralized finance (DeFi) applications.
• This angered some community members, who felt that such funding puts downward pressure on ETH prices due to potential sell-offs for salaries and operational costs.

Source: https://x.com/icebearhww/status/1881413731780821405

5. Legal and Regulatory Risks

The Ethereum Foundation faces an ever-evolving legal and regulatory landscape, particularly in cross-border regulations and cryptocurrency compliance. Regulations vary across different countries, posing challenges to operations and fund movements, especially concerning the U.S. debate on whether cryptocurrencies should be classified as securities.

Additionally, the foundation’s global financial assets, technology, and personnel must comply with regional regulatory requirements, particularly regarding securities classification and tax compliance. As the Ethereum Foundation continues to promote Ethereum’s development, it must address key issues such as decentralization, transparency, and global developer participation. With blockchain technology and its community maturing, these challenges will push the foundation to adopt a more balanced and adaptive approach for long-term growth.

Conclusion

The Ethereum Foundation (EF) has been instrumental in Ethereum’s growth and evolution. While it does not directly govern the network, its funding decisions and community involvement have significantly shaped the ecosystem. With Vitalik Buterin still on the board, the foundation remains a key player in Ethereum’s strategic direction.

However, some critics argue that EF’s strong influence contradicts Ethereum’s decentralization ethos. As Ethereum continues to mature, especially after the Ethereum 2.0 upgrade, it remains to be seen whether the foundation’s role will gradually diminish or continue to hold its strategic importance.

Despite these ongoing debates, EF drives innovation in the Ethereum ecosystem. In the Web3 era, its role extends beyond funding developers—it actively champions public goods, reinforcing Ethereum’s decentralized vision and laying the foundation for the next phase of blockchain adoption.