Key facts:
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Ethereum Foundation is a “whale,” with over 273,000 ETH in its possession.
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The Foundation’s ETH sales are a matter of debate.
The Ethereum Foundation is often in the news for selling significant amounts of ether (ETH), the network’s native Cryptocurrency. It does this to cover its expenses and often generates diverse reactions—generally negative—in the community.
Justin Drake, a computer scientist and researcher at the Foundation itself, downplays the importance of these sales. He sees them as a positive long-term measure.
For Drake, reducing the ETH reserves held by the Foundation encourages “decentralization” in the Ethereum ecosystem.
According to his vision, It would be ideal if the amount of ETH controlled by the foundation would approach zero in the coming decades., express in an interview with journalist Colin Wu.
Currently, the Ethereum Foundation possesses 0.23% of the total ETH supply, which is equivalent to over 273,000 ETH, making it a “whale.”
On August 23, the foundation sent 35,000 ETH (approximately $94 million) to the Kraken exchange, according to reported Lookonchain firm.
Previously, in May 2023, the foundation transferred 15,000 ETH to the same exchange, as reported CryptoNews.
Yesterday, September 5th, the most recent sale was made: 100 ETH worth $241,000 in DAI stablecoinSince January of this year, the foundation has sold a total of 2,616 ETH, accumulating $7.64 million in DAI across decentralized exchanges.
Criticism of the Ethereum Foundation
These sales have generated a wave of criticism and concern among the community. Justin Bons, CEO of Cyber Capital, express on social network X that Ethereum’s leadership has been “sold out by L2s” (Ethereum Layer 2)” and that ETH sales reflect a conflict of interest that could harm the Ethereum mainnet (L1).
On the other hand, Anthony Sassano, Ethereum educator, defended the management of the Ethereum Foundation, arguing that its actions They are focused on financing the development of projects that are crucial for the ecosystem..
Sassano acknowledged the need for greater transparency, but insisted that criticism should not be destructive, considering that the foundation’s expenses, at about $100 million a year, are minimal compared to the market capitalization of Ethereum.
Josh Stark, also of the Ethereum Foundation, intervened in the discussion showing data on the foundation’s expenditures, which include both external grants and internal research.
In 2022 and 2023, 62% of spending was on external teams, while 38% was on internal operations, as shown in the following graph.
Ethereum Foundation internal and external spending in 2023. Source: Josh Stark.
Despite criticism, the Foundation Ethereum remains a major driving force behind the development of the ecosystem, hosting key events like Devcon and awarding millions of dollars in grants annually.
However, the decision to sell large amounts of ETH has brought to the fore the debate about the influence of the foundation and the future of Ethereum as a truly decentralized project.
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