Vitalik Buterin, co-founder of Ethereum, has addressed recent criticism targeted at the Ethereum Foundation, emphasizing that it is not the central authority of the ecosystem and investors should not expect the organization to prioritize ETH price performance.
Ethereum Foundation’s influence and priorities
In a detailed post on X, Buterin explained that the Foundation is simply one participant within Ethereum’s distributed structure, rather than a body that dictates the network’s overall direction. These statements follow increasing criticism from the Ethereum community over rising competition with rival blockchains and ongoing debates around ETH’s tokenomics.
Buterin’s message highlighted the Foundation’s core priorities: long-term research, cybersecurity, decentralization, and open source development. He made it clear that the organization is not interested in tracking short-term market movements or reacting to swings in the price of ETH.
He further pointed out that the Foundation holds a comparatively small share of ETH, controlling just 0.16 percent of the circulating supply. By contrast, major crypto projects typically see their associated foundations holding anywhere from 10 percent to 50 percent of total tokens.
Buterin underlined that, “The Foundation’s decision to operate with a relatively small treasury is deliberate. Our main philosophy is to keep the ecosystem free from centralized structures.”
Additionally, he stated that the Foundation plans to decrease the frequency of ETH sales in the future, reserving its current holdings for longer-term research and development projects.
Changing strategies in staking and treasury management
In May, the Foundation withdrew 21,270 ETH previously held on the Lido platform. While these assets no longer generate staking rewards, the move was not a direct ETH sale but rather part of a longer-term treasury strategy.
Recent developments, such as major ETH holders closing their positions and several key employees leaving the Foundation, have fueled fresh discussions within the Ethereum ecosystem.
Dencun upgrade shifts network dynamics
The Dencun network upgrade, activated in March 2024, sharply lowered transaction fees for Layer 2 operations. However, this improvement also reduced the revenue generated by Ethereum’s mainnet. Analysts believe this indicates the Foundation’s preference for ecosystem scalability and better user experience over short-term tokenomics concerns.
Analyses have spotlighted that, “The Foundation is prioritizing security and robust infrastructure, not quick price spikes or raw transaction speed.”
Despite lively debate, the Foundation remains firm in its commitment not to engage in direct competition with high-performance blockchains, standing by its core objectives.
Ethereum’s unique approach compared to tech foundations
The Ethereum Foundation’s philosophy mimics that of other prominent open-source organizations like the Linux Foundation or Mozilla Foundation. These groups seldom intervene directly in commercial ventures built atop their platforms and rarely focus on short-term market results.
Yet in the Ethereum ecosystem, the dual nature of ETH—as both utility token and financial asset—often puts price-support expectations on the Foundation. Nonetheless, the organization carefully steers away from market operations, sometimes allocating ETH in protocols such as Aave and Compound as part of a savings-driven approach.
Mini glossary: The Dencun upgrade, activated on the Ethereum mainnet in 2024, is a software improvement that reduces Layer 2 transaction fees and enhances the network’s scalability.
The recent withdrawal of ETH from Lido fits within this long-term treasury policy and does not signal a fundamental shift in the Foundation’s strategic direction.
